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The Harms of Multi-Level Marketing and Fraudulent Investment Schemes

April 5, 2019 |   By Qian Zaixue, a Minghui correspondent

(Minghui.org) Multi-level marketing (MLM), also called pyramid selling or network marketing, is a strategy used in the sale of products or services. It is done by non-salaried individuals who generally earn a commission or have brought others into the system (downline distributors) and earn a percentage of what they sell. The product is generally sold through word-of-mouth marketing.

Luring in More Buyers

In a multi-level marketing structure, investors do not directly purchase products from the manufacturer. Rather, they purchase from the person above them in the chain. Newcomers must recruit more downline sellers to buy product from them in order to make a profit. People higher up in the chain make more money faster than those who join later, and the scheme is not sustainable.

In order to lead people into thinking that it is a legal and legitimate way of doing business, an MLM seller would carefully craft his sales model. Normally a person who first hears about the model would believe that it is a normal sales pitch. As soon as the person is not making money, the seller would talk him/her into getting more people to purchase the product. The seller would bring out the greed in the person so that he/she would be sucked into the business.

Some companies brainwash their downlines, claiming that they are “being a good person for helping others (purchase the product).” These downlines may come to believe in the ideology with religious fervor.

MLM Destroys Righteous Thoughts

Everyone came to this secular world because of Dafa. Conversely, many ordinary things in this world were put in place to prevent people from learning about Dafa. When a being takes an MLM company’s ideology of “being a good person” as a religion, the being would never identify with Dafa’s principles. These companies and their ideologies can be considered examples of “evil religions” Master describes in Zhuan Falun.

A former practitioner I knew claimed that he was a Dafa practitioner, but he was always busy with his MLM business. Every time he spoke, he mentioned that he worked for a certain company and tried to sell the company’s ideology. He did not have the righteous thoughts of a Dafa practitioner in the slightest.

Being involved with MLM not only consumes people’s savings, time, and energy but also changes the substance of a person. Ultimately, it prevents sentient beings from obtaining Dafa.

When practitioners are involved in it, they strengthen it, which makes them responsible for the harms it causes, even if it was planned by the old forces. If our involvement in MLM results in a potential practitioner becoming brainwashed, indebted, and busy recruiting downlines, it’s an enormous crime that one can never make up for.

Government and Investor Involvement in Fraudulent Schemes

Some forms of investment management schemes are similar to stock speculation and playing the lottery. Even if one makes a profit, these earnings fall in the category of ill-gotten gains. Some people put their life savings into these schemes and may commit suicide after a huge loss. How does one sleep at night knowing that part of their profits come from these people’s savings?

These investment products claim to have extremely high returns of 10-15% annually. Investors may make some profit at first. However, when the capital in the trading platform accumulates to a certain amount, the owner of the platform would somehow become bankrupt and disappear, or the platform would be confiscated by a government agency. By then, all the investors’ money would be gone.

These schemes incentivize investors to introduce the packages to others to make even more money. Meanwhile, to eliminate suspicion, these companies try to appear normal or even claim to be social welfare institutions. They often create many investment items, claim to have official backgrounds or independent capital management, and may be endorsed by the rich and powerful or by state media.

These companies operate in a manner that makes governmental supervision impossible. The fact is that the investment items were not real. Ordinary investors would never know or have control over the companies financed by their platforms. Both platform owners and investors are overjoyed by quick profits and easily manipulated by the evil.

When a large number of investors suddenly pour in funds, many indeed are able to profit quickly. What they might not know is that their profits come from the principal of later investors or their subsequent investments. Before they realize it, the company’s capital chain would somehow break down, the owner would be found to be involved in illegal fundraising, or the owner would just disappear. The platform and accounts would then be seized. All those who claimed that investors were protected would vanish, the media would go quiet, and government offices would begin to take over. Investors would then fight for their rights and meet with suppression. Many choose to end their lives as a result.

These incidents happen all over the place in China. MLM and investment management companies there have very deep relations with the Chinese government. To put it plainly, they collude to take money from civilians.

Obstacles for Cultivation

The old forces created financial traps to manipulate those who are greedy and want to gain without losing anything. These traps destroy people’s integrity and the potential for them to cultivate in Dafa.

Imagine someone who is supposed to understand the truth or even learn Dafa suddenly has a big fortune fall in his lap. What would he do under the influence of greed and other desires? If someone loses all of his savings in an investment, he would spend all day wondering how to get his money back, through cheating or otherwise. How would people in these situations be in the mood to listen to the truth or even think about the possibility of cultivating? For practitioners, they wouldn’t think about how to progress diligently in their cultivation either.

As long as practitioners are involved in MLM or similar investment schemes, they would not be able to focus on cultivation. Everyday people could lose the opportunity they have awaited for eternity even though the truth is right in front of them. If this were caused by a practitioner’s engagement in MLM, the practitioner would have committed an infinitely large crime.

Financial Persecution by the CCP

On a related note, some practitioners who have some savings or come from a wealthy background readily cooperate with CCP officials when it comes to investments. On the surface, it may seem that the practitioners are creating opportunities to clarify the truth, but it comes with high risks. These are ordinary people who are still in the CCP’s system, and they are vulnerable to the old forces’ interference. Once the old forces find them, they will jeopardize the practitioners’ investments.

This kind of truth-clarification comes with the attachment of pursuit, and the practitioner’s intention isn’t pure. A being’s righteous thoughts shouldn’t come from the profits of his investments. If a person pretends to agree with a practitioner but in the end cheats and takes the practitioner’s money, wouldn’t he be committing an enormous crime? But his crime would be the result of the practitioner not being clearheaded, and that makes the practitioner guilty as well.

Quite a few people don’t think that it’s a big deal to interact with CCP officials in the name of Dafa practitioners. These practitioners go around to persuade practitioners with decent savings to invest in national projects. This behavior is irrational. Think about it: if a CCP official knows about a Dafa practitioner dealing with high-level officials but does nothing, wouldn’t that be a problem in itself? The evil is waiting for more practitioners to take the bait and seize them all at once to strip them of their savings.

For the past twenty years, the CCP has tried all means to destroy Falun Dafa and left no place untouched for practitioners in China. We must see it for what it really is and not place false hope in the regime.

In China, practitioners are not accorded human rights or legal protection. Whoever wants the practitioners’ fortune would not be punished for taking it from them. We must see this issue rationally and not be victimized by the CCP’s financial persecution.