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An inquiry into Amway’s alleged pyramid scheme has been opened by Indian authorities.

The investigation’s early phase has resulted in the freezing of $757 crore (USD 99.1 million) in assets.

The Enforcement Directorate has begun the most recent inquiry into Amway in India. In this case, money laundering is also involved.

The firm was charged with operating a multi-level marketing “scam” by the Enforcement Directorate because the prices of the majority of the items it supplied were “exorbitant as compared to the alternative popular products of renowned manufacturers accessible in the open market.”

Amway is operating a pyramid scheme under the pretense of a direct selling multi-level marketing network, according to an inquiry by the ED into money laundering.

Amway’s business strategy is characterized by the ED as a standard product-based pyramid scam.

“The ordinary naive public is persuaded to join as members of the firm and purchase items at excessive costs, losing their hard-earned money in the process, without understanding the facts.

In contrast to the upline members, the new members are not purchasing the items to use them; rather, they are doing so to join and become wealthy.

The commissions that upline members earn in reality significantly contribute to the increase in product pricing, it was stated.

“The company’s entire mission is to spread the message that members may become wealthy by joining.

The items are not the main emphasis. According to the agency, “Products are utilized to pass this MLM Pyramid scam off as a direct selling organization.

This is the worst criticism of a more established MLM business I have yet to encounter in India.

William Scott Pinckney, the former CEO of Amway India, was detained back in 2013 on suspicion of “financial irregularities.”

Pinckney and many Amway officials were accused of pyramid fraud, which resulted in “illegal money circulation,” by the Economic Offenses Wing.

Pinckney was taken into custody in 2014 on related allegations after being freed on bond. A few months later, he was once more granted bail.

Amway India Enterprises Private Limited is the company’s name in India. Anshu Budhraja is the company’s current CEO.

The arrests of Pinckney are connected to an Amway investigation that started in 2011. Amway has confirmed that the 2011 inquiry is connected and is going on in response to the most recent asset seizure.

Amway India stated, “Since 2011, we have been cooperating with the department and have supplied all the material as requested on occasion. The action of the authorities relates to the inquiry that began in 2011.

We will continue to work in conjunction with the pertinent government agencies and law enforcement to resolve the unresolved issues in a fair, lawful, and rational manner.

Amazingly, Amway has been the subject of a thirteen-year investigation by Indian authorities.

According to NDTV, India’s regulations against pyramid schemes were toughened in December;

In December, the government outlawed direct selling firms from marketing pyramid schemes.

The Consumer Protection (Direct Selling) Rules, 2021 were created to defend consumer rights and prevent direct selling businesses like Tupperware, Amway, and Oriflame from promoting money-making schemes.

The Amway inquiry may have been suspended as officials for the law to catch up.

The Prize Chits and Money Circulation Schemes (Banning) Act of India, passed in 1978, was woefully insufficient for controlling pyramid schemes.

Let’s see how the new, stronger laws perform. A $99 million seizure thus far is considerably superior to what we saw under the previous legislation.

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