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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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346 Comments
gurupreet

gurupreet 1 week ago

QNet accused submitted fake papers to procure anticipatory bail: Police

MUMBAI: Around half a dozen accused in the Rs 425 crore QNet cheating case submitted fake documents before the court for procuring anticipatory bail, Pradip Gharat, special public prosecutor told the court. Later, a police officer filed an affidavit before the court that the statement and the signatures of him were actually bogus and that he was never involved in the investigation of this case at the initial stage.

Read the full story here: http://timesofindia.indiatimes.com/city/...

QNet: Ferriera, six others misled court by submitting 'fake' document, says EOW

Have QNet team leaders misled the Mumbai Sessions Court by submitting a fake document along with their bail application? The Economic Offences Wing has made this sensational disclosure. The police official, whose signature is on
the document has also denied having prepared or signed it

Read the whole story here: http://www.moneylife.in/article/qnet-fer...


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gurupreet

gurupreet 2 weeks ago

Finally its done :) Loved this message.

Rest of QNET domains go down too..wwww.qnet-india.com and http://www.qnetindia.net take a hit..what next Q?

The server at qnet-india.com can't be found, because the DNS lookup failed. DNS is the network service that translates a website's name to its Internet address. This error is most often caused by having no connection to the Internet or a misconfigured network. It can also be caused by an unresponsive DNS server or a firewall preventing Google Chrome from accessing the network.
Access a cached copy of http://qnet-india.com/

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jitu moni

jitu moni 2 weeks ago

http://www.wfmynews2.com/story/news/loca...

First Payouts Approved For Zeek Reward Victims
HIGH POINT, N.C.-- A federal judge has approved the first payouts for victims of the Zeek Rewards pyramid scheme. The High Point Enterprise reported that the attorney supervising efforts to return members to the victims said a judge on Thursday approved the payments.

Kenneth Bell said the first payments should be handed out late next month. Bell indicated earlier this year that the first payments could be for about 40 percent of what victims lost in the scheme. The U.S. Securities and Exchange Commission shut down and seized the assets of Zeek Rewards in August 2012.

Bell estimates that from January 2011 until August 2012, more than 700,000 people lost more than $700 million. Zeek Rewards had said it was a multi-level marketing business operating in Lexington.

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jitu moni

jitu moni 2 weeks ago

100 pull out of Chinese millionaire's MLM scheme in Malaysia

Major Chinese dailies reported that more than 100 people had cancelled their membership in the controversial multi-level marketing scheme YSLM, established by self-proclaimed Chinese millionaire Zhang Jian.

They were required to sign a letter which stated that their reason for quitting was due to the impact from a Facebook page calling on netizens to combat pyramid schemes, and that they were grateful to Zhang Jian for allowing them to terminate their membership unconditionally.

On Wednesday, the company announced that members who had failed to introduce new members to the company were entitled to a full refund of RM300 (S$115) if they quit the scheme.

Zhang made headlines recently when giant billboards of him appeared in Penang proclaiming him as the "future richest man in the world".

http://news.asiaone.com/news/malaysia/10...

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jitu moni

jitu moni 3 weeks ago

'World's richest man' offers refunds to MLM investors

KUALA LUMPUR: Members of a controversial multi-level marketing business started by self-proclaimed Chinese millionaire Zhang Jian are entitled to a refund if they quit the scheme, said senior distributor Jessy Lai.

“They have until Aug 14 to cancel the membership,” she said.

“Just bring your identity card, let us take your picture and a video clip stating the reasons you wish to quit, and we will give you the refund on the spot,” Lai told a press conference yesterday.

However, she said the refund would only be given to those who had not introduced any new member to the group.

Zhang made the news recently when billboards of him appeared in Penang, proclaiming himself as the “future richest man in the world”.

Subsequently, reports emerged accusing his company, known as YSLM, of being linked to a get-rich-quick scam.

YSLM has refuted all the allegations, stressing that it was a legal business.

Yesterday, Lai also refuted media reports that at least 100 people had turned up at the company’s office here to cancel their membership since news about the refund offer was circulated on the Internet before the official announcement.

“We have not received any applications as of now,” she said.

She stressed that the refund process could only be done at the office.

On the whereabouts of YSLM founder, Lai said he had been travelling in and out of the country, exploring overseas markets.

Asked whether Zhang would show up to explain his business, Lai said he would appear for official matters and not just to answer accusations against him.

She also explained why the refund would not be offered to those who had introduced other people to the scheme.

Those who had brought in two members would have received a commission of RM300 – equivalent to the membership fee.

Thus, no money would be returned to them, she said.

http://www.thestar.com.my/News/Nation/20...

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