The Promise Part Two

So here we go again, what have we learnt from The Promise Part One?

1. MLM is a high-risk business that can get you on the wrong side of the law.

2. MLM is already highly saturated that you will never be nowhere near the top of the pyramid.

3. MLM recruiters entice you with promises of fast easy money and success by flashing Lotuses, Beemers and yacht parties like carrots dangling from a stick.

4. They promise you a coveted status and a high-ranking managerial directorial position in a few months.

There are so many information available on the tricks of MLM companies and yet still so many people are falling prey to such schemes. Just google MLM SCAM and there you go. It’s all over on forums such as hardwarezone and on facebook.

So who are these people who easily fall prey to MLM schemes?

Let’s go back to my Aljunied ‘excursion’. Remember the part where husband and I were standing outside the building awkwardly? We were standing outside the building amongst people who were talking and chatting merrily. They were quite a mix, young and old, Chinese and Malay. Being Malay, I am pretty bothered to see true blue Mats dressed to impress. Being a true blue Minah, my Mat radar wouldn’t stop beeping, even though they are not dressed in ripped skinny denim and t-shirts and their ubiquitous crocs sandals, and not talking in their normal vulgar street Malay language. I know I’m being judgemental but it certainly takes one to know one. Having a despicable eye for detail, I observed that these people are wearing cheap shirts, pants and shoes. The ill-sewn seams on some of their shirts screams cheap, some of their pants cut at the wrong length and their shoes either too big or too small with bits of PVC leather peeling off from their shoes. Oh and not to mention their fake Prada belts cracking from poor quality. I know I’m being mean but, if you’ve made it like you said you did then you could probably afford a real Prada belt, a Paul Smith shirt, Hugo Boss pants and Ferragamo shoes ten times over.

And the prey, are people who lack an inquisitive mind, who wants money fast and easy without really lifting a finger, people who had a dismal educational history, who thinks this could be their big lucky break. People who failed, and then seek shortcuts to prove to the meritocratic society of Singapore that, hey, we don’t need education to succeed and attain all these luxuries, people who are vulnerable due to their financial status and other problems associated with it. People who don’t listen to advice and two sides of the story, people who only listen to the good stuff, unknowing students and retired seniors who are too young or too old to fully understand what is actually going on amidst flowery words and convincing promises.

And the easiest prey of all – friends and family who are obligated to give their support, who are equally oblivious to the hazards of such schemes. Sadly, these people should not be manipulated, for you don’t include friends and family in the pyramid. You could end up losing their trust, and worse, losing them.

So what happened to our old friend who called up my husband for an interview? He is in the food business, and not a word from him ever since my husband declined to be a ‘diamond seller’ or trader whatever you may call it.

Now on the topic of diamonds, what do they sell at Just Diamonds by DeFred? Put simply, something that ‘is better suited for everyday wear’. That spells trouble enough for me, because a diamond that you can wear everyday is a cheap piece of crap, scraps collected probably from by-products of manufacturing of diamond jewellery from other retailers or simply low to the point of zirconia grade diamonds. Here are some articles, blogs and forum threads about how to be a diamond franchisee/distributor with Just Diamonds by DeFred:

http://www.asiaone.com/Business/News/My%2BMoney/Story/A1Story20090615-148675.html

http://www.singaporebikes.com/forums/showthread.php/219632-Diamond-MLM-company?s=1b9ab20e8ed8abe1b9c01de17efb9797

http://dasfrauleinsyilah.blogspot.com/2010/04/this-post-comes-with-little-warning-and.html?zx=2018a4b72809c2bc

http://raaddd.diaryland.com/100513_97.html

http://forums.cozycot.com/jewelry/37940-just-diamonds-by-defred-3.html

In summary of news reports and people’s experiences in the links above, you have to buy SGD10,700 worth of jewellery to become a ‘franchise associate’ who has a privileged access and can bring in people into the showroom. And if they manage to recruit these people, they earn SGD2K. And to earn back their losses, they need to recruit 6 people. Now can you tell me, do you know 6 people who can and will plonk SGD 10,700 to earn back what you've lost?

Because of this, people go into debt – lured and blinded by the promise of big returns, they borrow or take up loans.

They sign up for iPhone lines to pay for their ‘starter package’ for other products.

They then end up with products that they have a hard time selling, and with a hefty debt at that.

On a positive note, with every 300 failures, there comes a success story. Of course there ARE people who make money from MLM, who can say to us, ‘Hey, you can shove your degree or diploma up your asses,’ and hell yeah, kudos to that lucky guy.

But what is the likelihood that you can be as lucky?

I’ve mentioned before about how it can be illegal, I understand how you can be ever so lazy at clicking on links so here it is:

Based on another MLM company, Nuskin,

‘Nu Skin in Singapore says it had more than 70,000 distributors at some point but today has 10,000-15,000 active ones. Based on 2008 numbers on health products group Usana's website, the average compensation of an 'active associate' (including Asia) is just short of US$900 a year or roughly US$75 a month. The upshot of all this is that if you are propositioned by an MLM rep, be sure to scrutinise the costs and volume requirements. And be wary of any pitch that says you can get rich quick or give up your day job. Singapore has regulations against multi-level marketing and pyramid schemes, and violations may subject participants to a fine of up to $200,000 and/or up to five years' jail’

Source: http://www.asiaone.com/Business/My+Money/Starting+Out/Investments+And+Savings/Story/A1Story20090406-133576.html

Information from a government body:

‘What would happen to "innocent victims" who participated in pyramid schemes unknowingly, and who did not benefit in any way before the scheme closed down?

Under the Act, all persons who participate in multi-level marketing or pyramid selling would commit an offence. This is because the participants would have played an active but destructive role of attracting others into the scheme. We believe that this is the best way to deter the potential promoters of such schemes.

Hence, we would urge the public to be extra careful and to exercise due diligence when deciding whether to participate in business schemes. They should be doubly suspicious of get-rich-quick promises. If they believe empty promises and hand over their money to the promoter, chances are they will be cheated of the money. At the same time, they might be guilty of committing an offence as they are participating in an illegal scheme.’

Source: Ministry of Trade and Industry

And from the same source above, you would be able to recognise that whatever that was done by LFI is definitely illegal. Read below:

‘How do I recognise a pyramid selling scheme?

Many pyramid schemes often disguise themselves as sellers collectors' items, software, training programmes, etc, when all they are interested is to make a quick buck through recruitment. Members of the public who attend sales talks must be vigilant to such schemes. Illegitimate MLM schemes usually share the following characteristics:

• When the promoter hype about how easy it is to earn money, people can get very rich in a very short time and that the way to earn money is by recruiting others to join the scheme;
• The so-called product that you are supposed to sell is not something you would normally buy at its price;
• Participants are required to invest money into the scheme, whether in the form of a joining fee, or buying inventory.

Remember - there is no easy money, you must believe in what you are selling and you should not put your money at unnecessary risk.’

And LFI being an illegitimate business is clearly reiterated with these points:

‘However, it also introduced the following rules for direct selling companies:

• Safeguards - A participant cannot be required to provide any benefit or acquire any commodity in order to become a participant in the scheme, other than the purchase of demonstration equipment which is not for resale, at no more than cost price and for which no commission can be given out. A legitimate multi-level marketing scheme would not impose a financial risk on salespersons. For example, salespersons should be entitled to full refunds, under reasonable commercial terms, for any inventories kept or purchased by them which are not sold to end consumers, so long as the inventories are returned within a period of 60 days.
• Behavioural checks - The companies must not misrepresent the scheme as get-rich-quick opportunities, and should not use fraud, coercion, harassment, or unconscionable means to force people to join the scheme. Instead, the companies should focus their efforts on promoting the quality and features of the products. If a company wishes to show potential participants the earning potential, they must keep records of the maximum, minimum, mean, mode and median earnings of their salespeople in the past.
• Sharing of commission - It is all right for a salesperson to share commissions from several layers of salespersons recruited by him. However, such commissions must be generated by sale of the product or service in question, and not through the recruitment of additional participants into the scheme.’

And the consequences:

‘During the review of the MLM Act in Year2000, the fines were raised from $30,000 to $200,000. Currently, a conviction under the Act will result in a fine of up to $200,000 or to imprisonment for a term not exceeding 5 years, or to both. The fines are for the following offences:

• promoting or participating in a multi-level marketing, or pyramid selling, scheme or arrangement.
• registering a business which is designed to promote multi-level marketing, or pyramid selling, scheme or arrangement.
• registering a company which proposes to promote multi-level marketing, or pyramid selling, scheme or arrangement.

In addition, the Act empowers a Court that convicts a promoter or participant of a multi-level marketing or pyramid selling an additional penalty of an amount not exceeding the amount or value of any benefit which the promoter or participant has received. This additional penalty ensures that the Act serves as an effective deterrent to potential offenders.’

So here I conclude that joining a company like LFI is not worth it for you can get in the wrong side of the law, causing trouble to your family, and losing friends in the process. There is nothing wrong with joining this if YOU HAVE THE MONEY to throw around and see what happens and if YOU DON’T INVOLVE YOUR FAMILY AND FRIENDS to join you in this swindle.

I again reiterate that education is the most important investment for your future, but if that is not your cup of tea, of course you can always persevere and start from scratch with your hard skills. The one and only way to earn an honest living is through hard work. The one and only way to make big money is to do shit – start an MLM company (haha) or rob a bank.

If you’re a part of this, wake up and smell the shit you’ve been loaded with. I have all the information down pat in two parts here, in easy to understand English, as comprehensive as I can. So if you’re reading this warn your family or friends against this MLM shit, let’s create an awareness!

Further reading and sources of information:

http://forums.hardwarezone.com.sg/showthread.php?t=2194835&page=5

http://www.asiaone.com/Business/My+Money/Starting+Out/Investments+And+Savings/Story/A1Story20090406-133576.html

The Promise Part One

It’s been some time now that I want to put forth my research on the hazards of MLM (multi-level marketing) and Pyramid selling schemes. It has been such a bother to see family, friends and affiliates to fall prey into such schemes, and in the end lose a substantial worth of life savings or even end up in debt.

You might find names such as LFI(then LongFar China, now LongFar International), Venture Era Local, Amway, NuSkin and Totalife familiar. These companies market and sell health and lifestyle products ranging from magnetic mattresses, bras and bracelets to fuel additives for your vehicle, health supplements to ‘cure’ a plethora of illnesses such as diabetes to diamond jewellery.

You might have been approached by your friends or family, and in my case a really old friend who appeared out of nowhere, to either buy stuff you never thought you’d need or to ‘join’ them in this little business of theirs. The approach is pretty subtle, my husband received a call on his cell from this long lost old friend of ours a few years ago about selling diamonds as a part time, with a potential to earn SGD400 for a few hours per day. Naturally, my husband was pretty keen and his friend told him to dress smart and come over to Sims Avenue for an interview. When he told me about that ‘interview’ I was curious. At that point of time, MLM was simply a news headline; I had no idea about it. Funny thing is, I thought it was a business in the black market. Come on, selling diamonds? Part time and no mention of a jewellery shop?

What we found out at Sims Avenue killed us.

We were told to park the car at a Shell gas station near Aljunied MRT station, and walk towards the back of Shell to get to the building. If you are not familiar with the Aljunied area it’s right on the outskirts of the red light district of Geylang amongst industrial buildings.

There it was, standing tall in all pride and glory, a grey building with a huge purple LFI sign in italics. Parked in front is a fancy green Lotus Elise, with several Beemers littered around it. (Oh and apparently a friend said the Lotus was fined numerous times for illegal parking – a little something to talk about later).

OH YES I AM GOING TO TALK ABOUT SUCH A COMPANY – LFI.

And then there are throngs of people standing and chatting merrily in front of the entrance. There was an open unit too, where people were making payments, people getting weighed, and more people sitting down and talking. Strange, I thought. Are all these people coming for an interview to sell diamonds part time too?

Standing there awkwardly with my husband, he called his friend, whom within seconds greeted us with a warm welcome. After a small chat we were then brought into the building for a tour.
We were brought into the open unit that I mentioned earlier. It was buzzing with chatting and laughing and hand shaking and people weighing. There was a jewellery shop called Jewel De Fred or something, complete with Cisco officers guarding the place. There was a huge range of diamond bracelets, necklaces, earrings and rings, and that friend commented ‘You can approach me if you wanna buy a good big diamond ring for cheap.’

Funny, I thought that my husband could help himself with buying the diamond ring if he got the job SELLING those diamonds.

Then we took the elevator to this huge room where there were MORE people talking on cafe like chairs and tables littered with company publications and magazines. On the walls were posters of photos of men posing with their flashy cars and marketing strategies and business models and health and beauty products as well as photos of old women who participated in a company beauty pageant.

This is where the brainwashing starts.

I didn’t pay much attention to the conversation going on as I was more interested in reading the magazines on the table. And whatever that was happening wasn’t making any sense as it was supposed to be an interview and it turned out different.

But the magazines were interesting though. Numerous products brought in or marketed by the company were featured, including top sellers of featured products. There was also a section where successful employees were featured, with their flashy cars, sprawling homes and luxurious lifestyles such as having yacht parties and popping champagne like P. Diddy.

Enticing.

When the conversation was over, and on the way back to the lobby, I saw smaller rooms with talks going on inside, with topics such as, or probably as I vaguely remember, Health 101 or something like that. Our friend said,’Oh you can attend such talks to further understand the products and its benefits, the company believes in constantly upgrading its employees’ or something like that.

So to be ‘employed’ you have to pay an SGD10 or something, and cough up about SGD5000 for a ‘starter package’ which I think consisted samples of products such as a few bottles of Atom Power fuel additive, and some health products.

My husband said to our friend he’ll think about it as 5000 bucks is a huge sum. And so we left.
We went home and did our research about that company. My husband is familiar with this, he told me there are a few terms to this such as MLM as used in this post, the Pyramid Scheme or the Leverage system. So what are they?

‘A Multi-Level Marketing or Pyramid Selling scheme will typically require participants to pay an upfront charge. In return, the participants are promised financial rewards for each additional participant recruited, as well as all new participants who are in turn brought in by their recruits - hence the pyramid-like structure.

As more salespersons are recruited, participants hope to recover their upfront charges and earn sizeable profits. However, such a pyramid scheme will eventually collapse when they run out of new recruits, resulting in those salespersons at the bottom of the pyramid losing all their upfront charges.

In the interest of consumer protection, the Government's regulation effort is targeted at preventing the proliferation of such high-risk schemes.’

Source: Ministry of Trade and Industry Singapore, http://app.mti.gov.sg/default.asp?id=567#10

So they say, in MLM recruitment, you buy the products at wholesale price and then sell at retail price. And to make more money, you recruit people so that you can earn a percentage from their sales.

So all you got to do is convince 10 people that they need the product, and get them to convince 10 others that they too, need the product. And 10 others and 10 others and what do you get? A pyramid! So imagine how many people there are going to be under you, and you earning from their sales and recruitment. Also imagine, the thousands of other people above you, earning from your sales and your recruitment. So what does that make?

An awfully saturated market where people are not making money anymore, especially those at the bottom of the pyramid.

And when you’re sceptical what do they say to you?
‘Unlike most others, you will never fail, because you are a winner, and this is an opportunity of a lifetime.’
'Looking at you, I'm sure you can earn a top managerial position in no time'

And when you’re not making money what do they say to you?
Will they still be there in the first place to say anything to you?

Eventually the one making money is that person who started it all, and he is hundreds and thousands of people above you, and he is smiling with the money you paid for your starter package, using that to pay for his fines by parking his Lotus illegally.

And also, if your product, such as Atom Power, is really damn good then why don’t the big automotive companies or even the F1 endorse the product? And who on earth would wanna put a fuel additive that is made in china into their precious cars?




And why can’t REAL doctors, NOT ARTISTES endorse the health supplements you claim to help ‘cure’ diabetes? Get proof too, of a real person who suffered from diabetes and getting better after eating your product. And why would a person want to buy a product from a company that has had stuff recalled like Menergy and Mentalk?

And Recruiters, why can’t you show me your cheque or bank account as proof of money you’ve earned from this?

Do your research about this, here are the links.
For info on how MLM can be illegal:
Ministry of Trade and Industry Singapore
http://app.mti.gov.sg/default.asp?id=567#10

For info on how MLM products could be dangerous:

http://www.channelnewsasia.com/stories/singaporelocalnews/view/350990/1/.html

Health Sciences Authority Singapore
http://www.hsa.gov.sg/publish/etc/medialib/hsa_library/corporate/pr20072009.Par.1666.File.tmp/HSAMediaRelease__HSACautionsAgainstConsumingMenergyMEssenceCapsules_121208.pdf

The Crazy Year is Coming to a Close

December is a lazy month for me to be updating, I'm still so tired from all the happenings since I returned from Vancouver. Just a teeny bit of what I remember doing.

1. Wine Connection date with the boys
2. 1 for 1 Wed at Wavehouse
3. Wavehouse 1st year anniversary
4. Zouk party with friends
5. Girls' Night out at Arena
6. Bali Vacation
7. Zoukout

I've converted to become a teetotaller since event No. 4. It was one hell of a bad experience.

And I love Bali so much!!! I stayed in a villa with a private pool, so I went swimming, then surfing on the beach, then riding a moped around town, seafood dinner, fastfood meals.... and had a 'butler' who came in to cook breakfast for us!

Though now I'm suffering from peeling skin due to over tanning - I think I fried my skin, I'm sporting a super dark tan now.

Oh and by the way, I'd recommend you to take KLM to Bali if you find a budget airline ticket sets u back about SGD170++. I got mine for SGD180 return, and had a good meal (requested for seafood meal) of fish fillet and potatoes, free flow alcohol (nope i didn't, i swear), spacious leg room and in-flight entertainment which was worth the money.


I should've taken a pic of the food inside too, but I was too hungry to think. And the wine is not mine. I'm allergic, hah!


i watched despicable me and 27 dresses, while the boys played tic rac toe with each other. oh there's sex and the city2 too, but i watched that on the singapore airlines flight from San Francisco earlier.

When I did my booking, the budget airlines were selling return tickets for SGD180 - 240, and you get juice, peanuts, crampy seats and smelly young punks as cabin crew. So yeah, topping up a lil bit more can be wayyy worth it. Don't mind me unless you get your tickets for SGD50 return then that's okay.

And then there's zoukout, I sure am bloody too old for such things. I've said it again and again, but this time it's for real, I am never ever going again. The crowd was young and horrendous! I hear young girls wailing 'don't push, don't push' and I wanna punch the lights out of them(It also doesn't help that I'm a fresh convert). Unless of course if Rachael Starr or Edward Maya is spinning then I might reconsider.