Australian Regulators views on Network Marketing Companies

RE: The website of the Australian Competition and Consumer Commission

Thought this may be of use to someone as this is a government body stating the difference between pyramids and legitimate Network Marketing.

http://www.accc.gov.au/content/index.phtml/itemId/8137

Here is an excerpt.

Differences between pyramid selling and multi-level marketing!

Consumers often ask the ACCC about the difference between a pyramid selling scheme and a multi-level marketing scheme. Sometimes the differences might not be obvious to the average consumer.

Pyramid selling schemes rarely include the legitimate and regular retailing of products. Instead, they provide rewards for introducing new participants.
Saturation point is very quickly reached and later recruits have little chance of recovering their money. Legitimate marketing schemes only provide rewards based on genuine product sales.

Pyramid sales promoters may attempt to disguise their schemes by selling goods and services that are overpriced, of poor quality, difficult to sell or of little value.

Participants who induce others to join pyramid schemes, as well as the initial promoters, risk breaching s.61 of the Act.

There are two questions that may help consumers identify legitimate multi-level marketing schemes:

* Are the rewards for participants in the scheme purely based on product sales (by either themselves or others they introduce to the scheme)?

* Are the products genuine products of real value, and of a type that normally will be used and purchased time and time again by a consumer, and not at a grossly inflated price?

If you answer yes to both questions, it is likely that the scheme is a legitimate multi-level marketing scheme.

I am Agel..

Rob Horkings