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Moneylife » Life » Public Interest » QNet: The “money game” played by MLMs to lure the gullible

QNet: The “money game” played by MLMs to lure the gullible

Sucheta Dalal and Yogesh Sapkale | 17/11/2012 02:38 PM | 

QNet, the controversial MLM company is luring executives and professionals by promising a weekly income of Rs27.7 lakh. Do the math… this is about the salary that Mukesh Ambani, one of India's highest paid CEOs earns. Yet, this patently exaggerated claim by QNet is ensnaring people to invest their hard-earned money on the fake promise of an enormous wealth. Meanwhile, the company seems to operating under several different names that are designed to hide a trail to its operations

QNet, the controversial, Hong Kong-based multi-level marketing (MLM) operator with multiple names (GoldQuest, QuestNet, QNet, QI Ltd and QI group are the better known names) and identities seems to be working on a clear plan to hide the trail of its Indian operations. Interestingly, worried investors and bloggers or those burned by the pyramid marketing business are doing an excellent job of tracking its operations and publicising them. Here are some such trails gathered through helpful bloggers like Sherwette Mansour from Egypt (http://joinnetworkmarketing.wordpress.com ).

 

According to Wikipedia, QNet’s business model has been described as a simple pyramid scheme, where initial entrants to the scheme do make money, but as the number of IRs increase, finding more independent representatives (IRs) becomes harder and harder, until those that join late are unable to recover even their initial outlay and the model collapses. QNet counters this explanation as offering a business opportunity that doesn't have the high cost of start up as a limiting factor. When an IR recommends the product, the customer makes a purchase through QNet’s online system and the IR receives a commission based upon QNet’s compensation plan.

 

The compensation plan operates by the recruitment of customers by the existing IR. An IR is provided with an ID that gives access to a “Tracking Centre” (TC) in its computer system through which the IR’s sales are tracked. A TC has a left and right customer group. Every customer owns a TC which is then placed on the left or right customer side of the IR’s TC. A ‘direct’ transaction (a customer’s personal reference or sale) is counted as one transaction. An “indirect transaction (someone in the customer’s TC buys/refers/sells) is also counted as one transaction. QNet pays $250 each time three product sales on an IR’s left customer group are matched by three product sales on the right,” says Wikipedia.

 

According to Mr Mansour, the blogger, if you are being paid for every six new people you recruit, by 13th level down you would exceed the population of Earth. He uses example of his home country Egypt. He says, “By level 11, you will exceed the population of Egypt. So, I am assuming that the business flourish and reaches level 10, which will have 60,466,176 (6.04 crore) people. Let’s assume that all these people will join the business, keeping aside the fact that Egypt is a POOR country and not everyone can pay an average of $1,000 to join the business. By level 9, the last level making profit in the country assuming everyone will join, an average of 60,466,176x$1,000 = $60,466,176,000 ($6,046.6 crore) is sent outside the country for all members in level 9 to make profit. Please do keep in mind that this number of people entering the business is almost impossible because a small percentage of Egyptians can actually afford to pay an average of $1,000 to join the ‘business’.”

 

To read more about QNet on our wesbite, click here.

 

Here are the repeat sales points (RSP) and its cash and business volume (BV) equivalents provided by QNet in its FAQs for India...
 

Image source-QNet FAQs for India

 

QNet says, its IRs can achieve rankings like Bronze Star, Silver Star, Gold Star, Platinum Star and Diamond Star, depending upon, how much he and his network or down lines sells.

 

Image source- QInfinite Compensation Plan for India

 

QNet claims that a Diamond Star can earn up to Rs27,73,800 (Rs27.7 lakh) per week while the same for a Platinum Star would be Rs22,39,050 (Rs22.4 lakh) a week. The money earned by a Diamond Star in QNet is almost the same that Mukesh Ambani of Reliance Industries (RIL), India's richest man as per the Forbes list, earns every week as salary (Mukesh Ambani forgoes Rs23.82 crore from his pay package ). We all have heard about Mr Ambani and his wealth. However, nobody knows how many Diamond or Platinum Stars are there in QNet's MLM network. If you know, then please share it.

 

In India, QNet’s MLM operations were controlled by QuestNet Enterprises (India) Pvt Ltd, a company registered at Chennai till 13 April 2012. From next day, it shifted all its registered agents, database and business to Vihaan Direct Selling Pvt Ltd, company registered in Bengaluru. Here are the details mentioned in the frequently asked question (FAQ) section on QNet’s site…

 

Image source-QNet FAQs for India

 

QuestNet Enterprises was operating QNEI eStore, a platform from where IRs, which is how the investor-dealers of QNet are described, could place orders or buy products and also enrol new recruits. After launching Vihaan, the company asked all its old IRs to mandatorily register under the new business name in order to receive their commissions. It is pertinent to mention that the big crackdown on its operations also occurred in Chennai when QNet operated under the name GoldQuest and sold numismatic coins.

 

You may also be interested in reading about the many other MLM schemes that Moneylife covers. Click here to read about them.


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321 Comments
jitu moni

jitu moni 3 hours ago

Madras High Court
Gold Quest International Pvt. Ltd vs The State Of Tamil Nadu on 9 April, 2003
..... 25. Nothing is placed on record regarding the foundation of the petitioner companies and the aims and objectives of the companies to achieve and how they are beneficial or serving the ends of the society or the general public and therefore needless to mention that only to cover up cases of such nature, Act 43/78 has been legislated by the framers of law revealing thereby the legislative intent to cover up cases of such nature with schemes which are not based on any ideal relying on one's effort, hard work or putting in the intelligence etc. but on luck or chance of making quick or easy money by lazy or lethargic means of enrolling members into the scheme only to enrich the organisers at the cost of the general public which are glaring in the schemes and there is no wonder the respondents have issued proper directions to their subordinates to be on the alert and to avoid innocent general public from falling a prey to the ill-motivated designs or alluring tricks and tactics adopted by parties like the petitioners by using those who fall a prey early being used as their canvassing agents for enlisting more number of the general public to join the scheme ultimately to enrich themselves at the cost of the innocent public who are sure to be cheated ultimately and since many such instances have proved to be utter failures in the recent times giving way for the public to be cheated of their hard-earned life saving monies. Prevention is better than cure. The preventive and punitive measures taken on the part of the respondents cannot, under any circumstance, be termed as either irregular or illegal or infirm or in violation of the norms of law. The respondents have rightly exercised their jurisdiction conferred by law in registering such cases wherein such unlawful activities are reported or brought to the notice of the respondents thereby promptly registering the case either under the relevant provisions of the IPC such as 420 or under the penal provisions of the Special Act such as the Prize Chits and Money Circulation Schemes ( Banning) Act, 1978 and thus they have only acted in adherence to the requirements of law and no such directions or orders as sought for to be made in the above petitions need be necessary in the circumstances of the case.

26. So far as the judgments cited on the part of the petitioners are concerned, in the first judgment by the Honourable Apex Court it is clearly held that `in the first place, it must be proved that he is promoting or conducting a scheme for the making of quick or easy money and secondly, the chance or opportunity of making quick or easy money must be shown to depend upon an event or contingency relative or applicable to the enrolment of members into that scheme', which are the ingredients of the relevant provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, which are laid emphasis by the Honourable Apex Court and the Honourable Apex Court would also hold that the `scheme has necessarily to be judged as a whole both from the viewpoint of the promoters and also of the members in order to find out whether it is a scheme for the making of quick or easy money and any event or contingency relative or applicable to the enrolment of members into the scheme'. Therefore, it is incumbent on the part of the respondents to study each and every such scheme floated and exercise their jurisdiction and proceed against, provided the transaction is not above-board and is secretive or clandestine in nature and if the transaction is considered to be a scheme for making quick or easy money.

27. So far as the case in hand is concerned, on a overall consideration of the facts and circumstances of the scheme floated on the part of the petitioners, the respondents in their considered view have rightly arrived at the conclusion to hold that they fall under the purview of Section 420 IPC and under Section 4 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 and hence they have given positive instructions to the law enforcing machinery and the police to register the cases wherever such schemes are floated. Therefore, the actions and prosecutions initiated by the respondents and their subordinates could only be concluded as within the permissible limits of their powers to register such cases and not in violation of any law or rule or norms.
http://indiankanoon.org/doc/267753/

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gurupreet

gurupreet 1 week ago

Vanamala/QNET runs away from Mumbai...

This is the message that was posted on http://www.vanamala-india.com recently...

Dear Members,

Due to service disruptions on our current hotlines, please refer to the following number should you have any queries: 0008006001144 or email us at customercare@vanamala-india.com

We apologize for any inconvenience.

Is it a 'Simple" Disruption or there is more then meets the eye..The truth is their offices were raided by the EOW..effectively shutting down the whole operations of Vanamala in Mumbai.

The last time this message was posted after Vanamala's Payment gateways were blocked..

Important Announcement regarding Payment Gateway - INR Payments
Dear members,

We are experiencing problems with our Payment Gateway system. As such, please refrain from using it with immediate effect.

To know the alternate modes of payment you can use, please contact our Customer Experience Ambassadors at
+91-22-6139-9500 and they will assist you accordingly. Thank you.

The above mentioned PRI Line number +91-22-6139-9500 has also become un-operational

How good these white collared criminals are at sugar coating the real truth...Raids become "disruptions"...blocking becomes "problems"...shame on you all white collared criminals, you all should be tried for treason for your anti national activities.

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gurupreet

gurupreet 3 weeks ago

EOW RAIDS QNET SYSTEM MEETING IN MUMBAY BEING CONDUCTED BY "MR.BIJOY MATEHWS"..TEAM LEADER OF QNET.

This Morning QNET team Leaders had organised a Seminar/System at the following address and invited innocent people to induce them into this illegal money circulation scheme..the system was held at the following address:

Youthapreneurs Training Center, 605, Alpana Bldg, Opp Sarvoday Hospital, LBS Marg, Ghatkopar (W), Mumbai - 86

During the raid Mr.Bijoy Mathews was caught red handed promoting the illegal money circulation scheme in presence of 45 Odd people.

Ironically this Mr.Bijoy Mathews is the same person who has had cooled his heels in the jail for more then 20 days in the past for the same offence.

The officers of EOW detained and questioned several people and names and contact details of 47 people were noted down :)

I am sure the records of the activity today will lead to the cancellation of the bail of several team leaders of QNET.

Let me mention here that a similar activity was done by the EOW several months back when QNET leaders were holding a system meeting in Dadar, Mumbai and details were noted down. These details led to the arrest of Nine qnet leaders earlier.

So guys any guess who all will be arrested now after today's raid/activity?

Best guesses will win prizes ;)

Keep posting/replying...

Regards
Gurupreet

P.S Tomorrow is the Hindi New Year so my msg to QNET "Happy New Year" in advance...

After the ABA of your people are cancelled we will get the bails also cancelled wait and see...

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gurupreet

gurupreet 2 months ago

"One man with courage is a majority."

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gurupreet

gurupreet 2 months ago

********** Appeal **********

Dear Friends,

As the fight comes to the crucial stage we need some more info inputs from you all, I hope you will all come forward as in the past and help us.

We need the following information:-

1. Details of events/systems etc held in different cities by members of quesetnet/qnet/vihaan etc with dates and name of the venue, with photographs & Videos if available.

2. Names and IR,s numbers of the top leaders of Questnet/QNET all over India.

3. Details of these leaders like the house addresses, cars owned etc.

Please email us all the details on gurupreet@gmail.com

STOP THE SCAM
BE THE CHANGE

Jai Hind
Guru

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