MLMs: Lured into India's get-rich-quick selling schemes

Direct-selling company QNET has been accused by India's economic crime agency of duping, "a huge number of innocent investors".

The BBC has been speaking to victims and campaigners against the scheme, who say QNET agents lured them in with promises they could make quick cash if they bought its products to sell on.

An Indian government agency, the Enforcement Directorate, said in a press release last week that people g up to the scheme were not told that their money - supposedly the start-up costs of their own business - was being routed into shell companies.

The agency says it has frozen 36 bank s pending further investigation.

Multi-level marketing schemes (MLMs), offer people the chance to make money by buying their stock - anything from diet supplements to cleaning products - in bulk in order to sell it on.

But some schemes in reality make money by recruiting more and more sellers at the bottom of the ladder.

The profits made by people at the top come from the cash invested by sellers further down the scheme, not from external customers - a structure that means new recruits, contrary to what they've been promised, are almost guaranteed to lose out.

There are laws in India against these types of MLMs, but they have proven difficult to enforce.

Their structure creates a pressure to recruit more and more sellers to keep money coming in - and it seems to have driven some MLM agents to some extreme lengths.

Ria, from Hyderabad in South India, experienced these unorthodox tactics first-hand.

She was struggling to feed her family after her father's shoe shop closed down at the end of 2019 when a message popped up in her Facebook inbox offering her a business opportunity from someone claiming to be a friend of her trusted school friend.

Once she had taken out a loan to enrol in the QNET scheme, though, selling products didn't appear to her to be the goal of the business.

Instead, she was being asked to recruit more sellers - first from her family and friends, and then from social media and dating apps.

"They wanted me to write a list of all the people I know from my list. I asked why, then they immediately [said] if you want to sell the product you have to first build your network," Ria explains.

It dawned or her that she had probably been a name on her school friend's list.

"When he said 'you should attract men', that was the red flag for me. And I started questioning… Why should I be on Bumble? Why should I be on Tinder?," she says.

Ria says she was also pressured to change her social media profiles - staging photoshoots with borrowed luxury goods she couldn't really afford to give a misleading impression of her financial fortunes

"When you start wearing a Gucci bag, people definitely will start asking you like 'what's happening":[]}