It has come to notice that during the COVID – 19 Lockdown, many fraudsters who are involved in multi-level marketing are using online video conferencing applications such as Zoom, Skype etc to promote their illegal Money Circulation Schemes.
The up liners and Multi-level marketing companies are organising meetings, seminars, lectures on these online platforms to attract people and making them join in their illegal schemes. The Commissioner of Police, Cyberabad also said that number of complaints through Social media, phone calls and SMSs are being received and necessary action will be taken on people or companies who are involving themselves in promoting their illegal money circulation and ponzi schemes.
The promoters are trapping the new set of individuals such as unemployed youth, IT professionals, small scale industry personals, College Students etc., by brainwashing them and promising to build their own business empire. Once the new member joins into the Business through a referrer/ promoter after paying the money, the new joiner gets some products and the promoter gets a commission. The promoter then says to the newly joined member to enrol two/three other members according to the design of the scheme and it goes on. As the number of persons increase down the line, the up liners get more commission.
The business model of these companies are simple pyramid schemes in which the early entrants earn money/commission and as the number of persons down the line increases, finding more new members to join becomes difficult or impossible. Persons who joins late does not earn enough to cover their first outlay and the model collapses.
