The scam right under our nose!

Recently my Instagram feed has been hit by a wave of posts, all of them from my 21 to 24-year-old friends who are buying superbikes and luxury cars. Once the shock and awe washed away, I sat down to dig deeper into the source of this opulence. How were guys this young able to buy vehicles that remain a distant dream even for experienced salaried employees? I soon learnt that they all work for a multi-level marketing (MLM) company called Team Ocean. Eyebrows raised! Multi-level marketing companies are notorious for being fronts for Ponzi schemes and scams. They can be so powerful and so deeply entrenched so as to bring a whole country to standstill. Albania saw a slew of pyramid schemes (another name for MLMs) starting from the early 1990s ultimately leading to unrests in 1997. The entire economy was crippled by this menace. While Ocean doesn’t pose as big a threat, the implications on the lives of the people involved has to be considered.

A pyramid scheme has a simple operating structure. There is a company at the centre of the whole fiasco. This company lures people to invest money in the scheme, with the promise of giving a share whenever new recruits join. In a more elaborate way, company A lures customer X into investing in the scheme, with the promise that whenever new customers join, X shall get a share. So, when new customers, Y, Z, V, etc join, X gets a share of the new payment. Pretty sweet deal for X isn’t it? It’s an even sweeter deal for the company directors who head a system that is essentially self-serving. Since it is in X’s interest that new people join the scheme, he himself will work tirelessly to bring the likes of Y, Z and V into the fold. The problem arises as you move lower down the pyramid. Earth has a finite number of people on it. More importantly, the number of people interested in this business are even less. So, as you reach the lower rungs of this pyramid, there are no new recruits to sustain the system. This is an even bigger problem, because the lower rungs have more people than the higher ones, like a typical pyramid. Soon the people in the lower rung realise that they are not being given the returns they were promised. Normally, these people will then start demanding their investment back at which point the directors flee the country and the kingpins go to jail. Phew!

Are my friends’ part of the higher rungs where money making is possible? Seems so. But this system is essentially the same as robbing someone with the promise that he can rob someone else to get even more money back. The Bombay High court in a hearing against QNet, an international MLM company, said that, “It is a chain where a person is fooled and then he is trained to fool others to earn money” So why does it continue to exist despite such blatant disregard for laws and logic? The fact is these MLMs keep the customers happy and have cult-like relationships. The bonds that they create within the team are supposedly very strong, which ensures that there are no questions asked. Another strategy they use, is what I will call the ‘victim card’. The people who are part of MLMs rant on about how society thought they would fail, and how they questioned them when they started the business. But the fact that they have bought a luxury car within months has proven the naysayers wrong. It also makes them the personification of determination and desire. To the readers who might be dubbing these kids as dumb, they have been reeled in by a rather lucrative deal. Couple of people I know, have motorcycles that nobody else in the whole state of Kerala have. And which job lets you buy an 80-lakh luxury car within a year of joining? So, we have to be understanding of the ‘carrots’ that were offered to these people.

The other important fact regarding MLMs are the marketing strategies. They spent crores on marketing, bringing in stars like Shah Rukh Khan and Anil Kapoor to talk about aspirations, dreams and a better lifestyle. And this better lifestyle is key, because that is the glue that holds this castle of illusion together. Everyone who joins this business yearn for a better lifestyle without having to work much for it. The Instagram handle of Team Ocean regularly churns out pictures of their young guns, driving BMWs and Audis at tender ages. And also, of their director chilling in infinity pools in Bangkok and Singapore. The emphasis is not on work, or the business as such…the focus is squarely on the life that awaits you. Recently, the police had even served notices to Shah Rukh, Boman Irani, Jackie Shroff and others for endorsing QNet. They are not complicit in this scam however. They are only guilty of endorsing a product they had no clue about, nothing new for celebrities who endorse fairness creams and ‘chick-magnetic’ deodorants.

The functioning of these MLMs is heavily dependent on the ability of existing customers to lure others in. And they can sometimes be very convincing! Several people I talked to have the same story to tell. The recruiters utilise the personal rapport that they already have with someone to lure them into the scheme. They openly flaunt expensive watches and vehicles to seduce the new comers. The process is nothing sort of an indoctrination where you are told multiple times that money is coming your way, you just have to accept it. They are so confident of returns that they even ask new comers to borrow money and invest in the scheme. One friend I talked to was asked to transfer money immediately so he can be higher up in the pyramid! This probably suggests that the logic of the scheme is not lost on the existing subscribers. The indoctrination is also made out to be a kind of DIY system. My friend was asked about the world’s leading watch brand. Apparently, Ocean sells this brand of watch. In exchange for the money that you put in, you are given products like washing machines as a guarantee if you lose money. This is complete hogwash and is only aimed at giving the impression of hedging. Most often, once the money starts rolling in, people don’t bother with getting the products. I myself had such an encounter a few months back. I found a friend of mine at my door asking for a lofty amount of cash so that he can invest in the scheme. Luckily, I did not budge. Thus, the recruitment model for these MLMs are built with a lot of thought, and with a lot of personal nuances intertwined in them. More importantly, they make a conscious effort to distance themselves from QNet, they might even diss QNet a bit. The reason is that QNet’s name has been tarnished by multiple cases, and their website is also banned in India. QNet does not have traction in India anymore. But Team Ocean seems like a whole different animal.

I would urge all the readers to visit the website of Ocean after reading this article. Other than some generic pictures of non-Indians whose purpose is beyond me, you can find the products they sell. The company whose employees zoom around in luxury cars, sells turmeric powder, chilli powder and other spices, under a category called ‘masala’. They also sell clothes, most of which were under thousand rupees, and all of which I found on other websites. Ocean also sells sarees called ‘Priyanka Saree’, which are basically multiple colours of the same saree, all of which have been shown to be worn by Priyanka Chopra. These are available on many other websites for the same cost, but surprisingly, they have zero customer reviews. So that’s how Ocean makes money for its subscribers. By selling spices and cheap sarees!