Families ripped apart by MLM schemes

KUALA LUMPUR: Divorce, custody battles, police reports and fist fights. These are just some of the repercussions in families ripped apart due to pyramid schemes.

Of the hundreds of cases annually where people claim to have lost their investments to multi-level marketing (MLM) schemes, a majority of them had been convinced to part with their money by their own family members, says MCA Public Services and Complaints chief Datuk Seri Michael Chong.

He said that when a participant of a scheme realised that he or she needed to bring in new recruits just to recoup their investment, the first people they would target was family.

“It’s easier to influence your cousin or aunty. They trust you. If they see this in an advertisement, they may not believe it but because it’s a relative, they let their guard down,” he said.

They would either use the convincing tactics that they had been taught by their company or they would emotionally blackmail family members.

Chong said he had received cases where people had pleaded with cousins, aunts and uncles to invest in their company because they were not meeting their bottom lines. Some even did it to their friends.

“If your friends ask you to join their scheme, they are not your friends. They just want to get their money back and are willing to use you,” he said.

Once, a husband had to divorce his wife and take his children with him after his partner lost the family’s EPF savings to an illegal MLM, he said.

“Some families come to my office and they don’t even want to talk to one another. I have to talk to both sides for them. Sometimes, they even fight in my office,” said Chong.

“Despite holding press conferences for nearly 12 years, cases still seemed to fly through the department’s door weekly,” said Chong.

“People never learn. Ultimately, it’s their greed and carelessness that are going to cause damage.”