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MLM and Pyramid Schemes

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abu mohammed, Taalibah
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#1 [Permalink] Posted on 31st January 2015 11:46
Salaam

MLM and Pyramid Schemes are haram or doubtful at best - no matter what spin you put on them.

Many ulama and mashaikh are using their positions of trust and influence in our community to take advantage of others to make money.

Please be aware and warn others too.

Question the ulama and mashaikh as to why they are deceiving people. Advise them that this money is haram.

some fatawa relating to these schemes...

islamqa.info/en/42579
islamqa.org/hanafi/askmufti/45389
islamqa.org/hanafi/darulifta-deoband/27501
islamqa.org/hanafi/darulifta-deoband/23529
islamqa.org/hanafi/qibla-hanafi/35298
islamqa.org/hanafi/qibla-hanafi/35923




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#2 [Permalink] Posted on 31st January 2015 12:50
Is this scheme similar to the Aloe Vera product type of scheme where they just keep trying to recruit more and more people to get them to be resellers. The more resellers they get, the more commission they get.

Sometimes they really get on my nerves with their constant pestering.
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#3 [Permalink] Posted on 31st January 2015 13:04
abu mohammed wrote:
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salaam

not sure brother. depends on the details of the scheme. but generally if the scheme involves making more money from bringing other people into the scheme than making money by selling the product itself, then it smells like a mlm/pyramid scheme.

usually the products are just a front. the real 'business' is to bring more people into the scheme.
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#4 [Permalink] Posted on 31st January 2015 14:11
abu mohammed wrote:
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Yes thats MLM (Multi Level Marketing) also known as Network Marketing.

Essentially Pyramid Schemes or Ponzi schemes are illegal in most countries. Pyramid scheme involves recruiting people into some sort of investment project, every new recruit that takes part has to pay a fee to join, the person who recruits them is promised a percentage of commision for each new recruit. The New recruit then tries to get other people to join, etc. Traditionally the people at the top of the Pyramid Make all the Money. Then they shut up shop disappear and set up a new scheme somewhere else and and con more people out of their money.

Many governments 50 or so years ago declared this illegal (that is promising people money to recruit more people).....But if you are selling a Product along with recruiting others to sell the product, then it is Legal, so many companies appeared selling everything from dietary supplements, too household cleaning products and Started calling it MLM or Network Marketing, and as with Pyramid schemes the only people who make money are at the top of the Pyramid. The poor fools at the bottom of the pyramid spend hours of time and money working for nothing and literally begging others to join.

Many people are duped by the promise or allure of quick riches, often times the people who join up to such schemes are already suffering financially.

The promise of riches is based on the fact that for example if you recruit five people and those five people recruit five people and they in turn recruit Five people etc...you will create an endless chain of recruits or associates as they call them and you will end up with hundreds of people in your chain and you will receive a percentage of the income produced by each one.

Just out of interest the Mormon Church which is the fastest growing and most dynamic pseudo christian organisation in the world, uses some of the same tactics in their Dawah/Missionary work.

Each activist in the Church is given a target of speaking to a certain number of people a day about the Book Mormon and the message of the Church, once they get a new recruit that individual is also required to speak to a certain number of people a day usually the target is 40 a day. With the objective being for experienced activists of acquiring atleast 1 new convert/recruit a week for the less experienced 1 a month and for complete beginners the objective is to get 4 new members in their first year of missionary.

Imagine if every muslim spoke to 40 people a day about Islam...!



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#5 [Permalink] Posted on 31st January 2015 14:14
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#6 [Permalink] Posted on 31st January 2015 16:09
Abdur Rahman ibn Awf wrote:
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What do you mean by legal?
Is this a rule for the country or are talking about shari' rules?

I've seen knowledgeable respected learned and well versed in the deen reselling the aloe vera bottles too. Would be great to know if its halal or haram.

Jzk brother
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#7 [Permalink] Posted on 31st January 2015 16:43
ali wrote:
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If they paid to join the club, and they need to recruit more then it's haram. That's what the fatwa is implying. Allahu alum
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#8 [Permalink] Posted on 31st January 2015 20:52
ali wrote:
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No not according to shari rules......I am talking about most western countries UK, USA, Canada etc.
A Ponzi Scheme named after an infamous con-Artist from the 1920's Charles Ponzi is Illegal in these countries, a Pyramid Scheme is also deemed illegal in these countries.

But a derivative of this scheme called MLM or Networkmarketing is considered legal in these same countries because a live product is attached to them and it is not compulsory for a member to recruit more people they can opt to just make money by selling the product but the catch is the products are way overpriced they rarely sell ( you could probably get the same product in a store for about 10% of the price) ....so it is implied to new members that to make real money they can make more money by building a chain, , another derivative of MLM is something called Affiliate Marketing which is popular on the internet.

Some well known MLM companies are Herbal Life, which sell weightloss supplements, Amway, and in the U.k. a Company called Kleeneze which sells household products the most famous MLM company with an Aloe Vera juice in its product line is an international MLM company called Forever living, each new member is required to purchase a certain amount of product a month, and they are promised a share of the profits of all those people who are in their Chain or downline as they call it.

If any Religiously learned people are involved in recruting others into these type of schemes they need to be questioned about their ethics.



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#9 [Permalink] Posted on 20th February 2015 17:28
So kleeneze and betterware are considered haram?
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#10 [Permalink] Posted on 20th February 2015 19:07
byellow200 wrote:
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If you simply posting Catalogues through peoples letter boxes and taking orders for household products then no...If you are being encouraged to get others to pay a fee and join your distributor group then it becomes a whole grey area ethically personally as for Halal or Haram I think each company would have to be judged on a case by case basis and in accordance with their business model.

However you will be doing a whole load of work with very little money in return, and if you recruit your friends and relatives to join they will end up doing a lot of work for very little in return and probably be very upset with you for getting them to join, the failure rate for distributors in these companies is around 95%, so only about 5% actually make any money.... most distributors quit after a few weeks . The reason the Ulemah have raised concerns is that people who join are not actually told the reality of this.....Instead new recruits are told they can earn anywhere from £400, to £5000 and upwards are month desperate people in financial hardship end up joining, because they have been sold a dream, some of these companies require you to order a minimum amount of product from them a month, problem is you might not be able to sell end up with a whole lad of unsellable products.

The internet has made the business Model of these catalogue companies more or less obsolete.

You will probably make more money selling on e-bay.

The heyday of Catalogue companies was in the 1970's and 1980's.

As for the Two companies you mentioned, I looked at these companies more then a decade ago, Betterware did not operate like a Network Marketing company there was no pyramid system you simply posted catalogues and collected orders, I dont know if that is still the case, and they did not charge you for the catalogues, nor was their an upfront fee to join you simply earned a commision for the orders you took.

Kleeneze however did have Network Marketing model in place, but you where not required to recruit others you could simply post catalogues and take orders but you were charged a upfront fee for the catalogues and starter kit. However people where encouraged by the marketing materials to recruit others, with a promise of great riches, and stories of how people were making upto £500,000 a year through there chain etc.
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#11 [Permalink] Posted on 22nd February 2015 19:13
The best pyramid scheme with a 100% guaranty of a lucrative return: Tableegh
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#12 [Permalink] Posted on 4th March 2015 15:03
Does anyone know anything about ACN? Need to convince someone out of it.
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#13 [Permalink] Posted on 6th January 2020 12:48
I've recently come across youngsters who are being asked to sign up to a certain website and then they get involved in forex trading..The thing is, one of the youngsters involved is a Muslim and has managed to make millions (for real) in a short space of time.

The guys name is Zain Khan and is some part of IM Academy (FRX).

He allegedly says it's not interest based nor is it a pyramid setup. It is MLM based and I understand people have to register to take part. It is unclear at the moment if there has been a charge to join, but the website says there is.


Anyone with any info about this group would be much appreciated.

It's IML IMarketsLive
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#14 [Permalink] Posted on 6th January 2020 13:37
Yasin wrote:
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"MLM is always a scam"
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#15 [Permalink] Posted on 6th January 2020 13:40
Asaaghir wrote:
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Salaam

Do you know this Zain personally?
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