Pyramid scheme launches climb to highest in 5 years

More than 400 new multi-level-marketing pyramid schemes were launched in India in 2023, the highest in five years, according to Strategy India, a policy, compliance and direct-selling consultancy that's an associate member of the Indian Direct Selling Association (IDSA)...

Over 4,000 such schemes are said to be on currently, according to Strategy India..

"To prevent Ponzi and multi-level marketing (MLM) money circulation schemes, the Consumer Protection (Direct Selling) Rules should be revised to remove ambiguity and loopholes," said Pranjal Daniel, chief strategist at Strategy India..

The Ministry of Consumer Affairs had modified the Consumer Protection (Direct Selling) Rules, 2021, through a notification issued on June 21 this year to distinguish between such fraudulent pyramid and money-circulation schemes and legitimate, direct-selling multi-level marketing players..

Vivek Katoch, chairman of IDSA, which represents Amway, Oriflame Tupperware, Avon and Herbalife, told ET, "The Consumer Protection Act needs further clarity, to differentiate between direct selling companies operating with multi-level marketing models, and fraudulent multi-level marketing schemes which operate with the intent of defrauding people from what is commonly referred to as pyramid or Ponzi schemes."..

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