Published On: Fri, Sep 9th, 2016

The Pyramid, The Network And The Multi-Level Fraud – By Onwuasoanya FCC Jones


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Many people believe that the loudest fad of the moment is Bet9ja or other  sports betting brands, which a lot of our youths and even the elderly have embraced with hope of getting some quick money to escape the very harsh economy we are presently facing, but that doesn’t seem to be true. There are more people indulging in worst gambles than soccer betting. From young students who are tricked into parting with their pocket monies, to their parents whose life savings may have been taken away from them on the pretense of making life better for them, and making it possible for them to work from home and make thousands of Dollars.

The promoters of this attractive business could not have a better swell time than now, when more than five million Nigerians who were previously employed are now back to the labour market, and confused about what to do with their lives. Unfortunately, some of these people who have been laid off either by some commercial banks, oil companies, travel agencies, and many other companies that have packed up in the last one year, when Nigeria’s economy has continued on a downward slide, may end up throwing away the little savings they may have put together and with which they may have been able to sustain their families for some time as they try to invest in one network marketing venture or the other. The proliferation of these network marketing companies in Nigeria is mostly as a result of the dire economic situation of the country.

It is important to make it clear that I do not think nor will want to lead any of my readers into believing that EVERY network marketing or more aptly, Multi Level Marketing idea is fraudulent, unprofitable or unsustainable. In truth, there are several successful brands that have been sustained over the years through the Multi-Level Marketing ideology. Products like; Mary Kay cosmetics, GNLD food supplement, Forever Living Products, Tianshi just to mention but a few have been sustained through this method of Multi Level Marketing, pyramid selling or referral marketing. No matter what term you choose for this type of marketing, the main gist about it all is that the companies who make these products, design a business plan that make it possible for them not to just hire their salespersons, rather they lure these salespersons into a form of partnership whereby these salespersons see themselves as partners of the business organization or distributors who do not only sell these companies’ products but also canvass for more people to join the company under the same arrangement. These companies in turn make them pay for their products ahead of time and pay them commission based not just on the sales they make, but also on the number of people they have been able to convince to join the business organization and sell their products. While, many of these companies have packed up, with more than eighty percent of those who invested their monies having their hopes crash before them like pack of cards, products like GNLD have remained afloat in the market, but not with half of the number of people who flocked the business at its inception in Nigeria. A good number of those who subscribed to the business are today regretting that decision.

Network marketing or multi-level marketing outfits are springing up in different molds every other day in Nigeria these days. Different ideas, different selling patterns and different mouth-watering incentives by these outfits, yet, more of these companies will still come into the country or be grown by Nigerians and more Nigerians will still go ahead to register with them. Unfortunately, even those who had experienced failure in an earlier experiment with network marketing will still go ahead to invest in any new one that comes up. This is because; 1. These companies promise incentives that will be too difficult to turn down. 2. It takes very little money to enroll in most of these companies. 3. There are evidences that some people actually benefit from the scheme. 4. Jobs are scarce and there are few people who have the kind of money required to set up their private businesses in today’s Nigeria, but it is easier for many of them to get Five Thousand Naira or a little less to subscribe into a business that may give them millions of Naira, a car, and even build them houses.

The fact that there are people whose lives are turned around for good by some earlier network marketing experiments make it impossible for many people to understand how risky and mostly ill-advised it is to invest your hard-earned money in these businesses. For instance, it is a fact that many people we know and can identify with had won lotteries in the past, some of them so much money that they became instant millionaires without much work, but this does not change the fact that more than 90 percent of those who indulge in gambling end up frustrated and poor. It is important for anyone who is thinking of or have already invested in this line of business to understand that like, Bet9ja, network marketing is a very risky gamble. For me, sports betting is even more transparent, because you will be able to explain why you haven’t been able to win or why you lost your money, but with, network marketing, you are technically tricked to part with your hard-earned money.

It is important to understand that Multi-level Marketing alias network marketing, while they employ strategies that are similar to the pyramid marketing module are mostly legitimate business while the pyramid scheme, is exactly what it is; a scheme. Multi Level Marketing ideas that sell goods and services to not just its members or ‘downliners’ but to the general public are usually more credible than groups that depend on the recruitment of new members or downliners in order to pay its subscribers. The United States Federal Trade Commission which America’s own version of our own Consumer Protection Council (CPC), categorically warned about such schemes that have nothing to sell, but ask people to recruit friends and relatives for their own pay. According to the FTC; “Steer clear of multilevel marketing plans that pay commissions for recruiting new distributors. They’re actually illegal pyramid schemes. Why is pyramiding dangerous? Because plans that pay commissions for recruiting new distributors inevitably collapse when no new distributors can be recruited. And when a plan collapses, most people—except perhaps those at the very top of the pyramid—end up empty-handed.”

I do not know what our own Consumer Protection Council (CPC), and even anti-graft agencies like the Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices and other Related Offences Commission(ICPC) are doing to protect economically vulnerable Nigerians, from such schemes as Money Making Machine (MMM) or the Helping Hand International and others like them whose mainstay is the recruitment of downliners by its subscribers. There are also newer and less popular schemes which have continued to swindle the gullible while institutions of government charged with the responsibility of protecting Nigerians from such watch them. It is more disheartening to learn that most of these schemes are imported from abroad.

There lived a Charles Ponzi who swindled his clients through this kind of scheme. He promised his clients 50% return on their investments within 45 days and 100% return within 90 days. When this scheme collapsed just within one year, investigators found out that Ponzi was actually paying these ‘investors’ with monies he got from earlier ‘investors’. When a lot of people have thrown their money into the business, Ponzi found his way in a fix and about 20 Million Dollars of peoples’ money went down the drain. If Nigerian investigators had being up to the task, they would have found out the staggering sums of money that a good number of these MLM outfits have ripped ordinary Nigerians off in the past ten years, and how many more billions of dollars will be stolen from ordinary and vulnerable Nigerians through these schemes in the months and years to come.

Being attracted to an idea that promises to keep you at home while your bank account swells, is a clear evidence of gullibility of those who fall victim to these schemes. No one will love you so much as to freely disclose the secret of his or her business success to you. Any business that is that lucrative thrives on secret. If those who promote these businesses are so philanthropic minded that they would want as many Nigerians as possible to become millionaires, while working as their own bosses, why haven’t these companies designed a program to teach their subscribers how to produce the supplements or cosmetic products they give them to sell?

Massive enlightenment campaigns need to be mounted to ensure that a good number of Nigerians are made aware of the dangers inherent in these schemes, while the youths should be encouraged to imbibe the spirit of diligence, hard work and more importantly dignity of labour. The intent to eat without working or cutting corners to success is one of the reasons why these pyramid schemers would always have people to lure into their deceitful trap.

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