Is my friend involved in a pyramid scheme?

[Cheesekraft]

My friend, say, 'Jane', was  just hauled in by her friend, 'Anne', to a japin Iwater. Anne brought Janne in, essentially forcing a favor; but what they asked for was beyond ridiculous to me. Jane handed over her passport, bank book, and 'joined in' as a 'member', 'under' her friend. 

Anne has already put in 600,000 THB for 10 + 1 "free" unit, so 11 total.  water purifying machines, "jaipin iwater" units. Anne intends to resale these. After she sells 10, she plans to return and buy another 11 under my friend Jane's name, presumably because she gets commission for doing so.

 

This sounds like a pyramid scheme to me; the paperwork definitely looks it as well. The "Marketing Plan" literally has pyramidal shapes 

'Retailer'   'Distributor'                special distributor               agent          supervisor               supreme supervisor

25%              30%                               45%                              45%

             */        *|       *\                   */     |    *\                     */       |       *\

       25%      25%      25%          30%   30%  30%          30%    30%    30% 

                                                                                   |5%|*(45%) 

                                                                                   |5%|*(45%) 

                                                                                   |5%|*(45%) 

 

etc. 

its quite 'clear' to me, I can't be confident, but it defintely reaks of a pyramid scheme to me. 

 

Anne paid 500 baht for Jane to become a 'member' (against her will) and is on the hook, I have a strong urge to talk Jane out of it... is there any reason to believe this is a legit buisness ? Should authorities be contacted?

[ClutchClark]

Someone give back 500 Baht to Anne and convince Jane to stay away from this deal.

 

[heybruce]

Not enough info to say for sure, but if the people already up a level make most of their money bringing in new members (membership fees and a cut of all sales below them on the pyramid) than by selling a product it's a pyramid scheme.

This is not necessarily illegal, even in countries with proper consumer protection laws.  I think Amway has a similar structure.  But I think it's suspect and I wouldn't get involved.

[KittenKong]

Regardless of whether it is a real pyramid scheme or not, it's still a scam. All such "deals" in Thailand are scams.

[worgeordie]

"Anne paid 500 baht for Jane to become a 'member' (against her will),"did she have a

gun to her head ?,that's the only way anyone could make me do something against my will,

 

Good luck to Anne selling them,as I suspect there will be other mugs trying to do the same.

P.S. does she have a work permit to work as a sales person.

regards worgeordie

[KhonKaenKowboy]

the water filters are an old favorite of the pyramid schemes.  Herbal Life lives on, but even its days may be numbered.

[flare]

Whenever a company's business model encourages its members to make their money by recruiting other 'salespeople' over actually making sales, it's a pyramid scheme.  Only the first few people involved make money- everyone else gets screwed.

Edited August 2, 2016 by flare

[junglechef]

How was she made to do it against her will? 

 

 

[KittenKong]

2 minutes ago, junglechef said:

How was she made to do it against her will? 

 

The threat of getting money for nothing was made. What Thai could resist such a despicable act?

[Cheesekraft]

2 hours ago, junglechef said:

How was she made to do it against her will? 

 

 

social pressure / calling in a "favor", after she was basically tricked into coming.

Edited August 3, 2016 by Cheesekraft

[Rob13]

Multi-level 

Spoiler

 

Multi-level marketing. Even when done legally it's a scam. 

[tomwct]

I agree! Scam!

[TheFishman1]

Run Forrest Run

[Peterw42]

There are lots of these pyramid selling things in Thailand. My wife is always getting approached by friends of friends. Vitamins, slimming pills etc.

A recent one selling Rice bran oil as a health product, actually run by westerners.