Members not allowed to collect money for investments — Body
Posted on August 1, 2012, Wednesday
KUALA LUMPUR: The Direct Selling Association of Malaysia (DSAM) has warned the public against scams by the so-called direct selling firms, saying its members can only sell products and are not allowed to collect money from their distributors for investments.
“Legitimate direct selling companies will never require their distributors to invest any amount of money and promise a return of their monetary investment,” it said in reference to a scam by the Malaysian-based international company.
It was reported that the scam affected the investments of over 10,000 victims which ran up to millions of ringgit.
DSAM said the company involved in this investment scam was not a licensed direct selling company at the time of the offence.
“As informed by the Ministry of Domestic Trade, Cooperatives and Consumerism (MDTCC), the direct selling licence of this company has expired in 2011 and was not renewed by the ministry.
“All legitimate direct selling companies in Malaysia require a direct selling licence issued by MDTCC to operate,” it said.
DSAM said these unethical practices under the guise of direct selling was tantamount to investment and pyramid schemes which were illegal and motivated by greed.
The association said distributors earned their income in direct selling through personal and group selling of the products.
“Payment of bonus or other benefits derived primarily through recruitment or introduction of new members into the operation or chain process rather than sales of goods and services are strictly not permissible,” it said.
To safeguard the interest of direct selling distributors and consumers, DSAM welcomed any enquiries on direct selling, it said.
“The public may call us at 03-7726 9232 or email the enquiries to firstname.lastname@example.org,” it said.
DSAM is affiliated to the World Federation of Direct Selling Association and has been practising a Code of Conduct since 1998. — Bernama