Things you need to know about MLM companies and their products

There are many scams involving MLM companies nowadays. These MLM companies no longer preserve their ethics that they endeared so much in the past. The principle of delivering quality products directly to the consumer at a “value for money” price and with money back guarantee has diminished.

The motive of many MLM companies today is to make “BIG” bucks and make it fast.  Product quality and price have become secondary.

To avoid being cheated by the unscrupulous MLM companies, consumers must be able to differentiate the products, the MLM companies and the direct sellers.

As at February 2009, there are 670 licensed direct selling companies approved by the Ministry of Domestic Trade, Co-operative and Consumerism. The direct selling industry generated a total revenue of RM4.56 billion in the year 2007. The ministry revoked the license of 12 direct selling companies. (source: Ministry of Domestic Trade)  On top of this figure, there are hundreds of unlicensed/illegitimate direct selling companies.

There are two direct selling trade associations in Malaysia. One is the Direct Selling Association of Malaysia (DSAM) and the other is the Multi-level Marketing Association of Malaysia. (MLMAM). The former consists of the big players whilst  the latter belongs to  the small timers.

All approved direct selling companies in Malaysia carries a license number with the prefix AJL 123456.  This license is issued by the Ministry of Domestic Trade , Co-operative and Consumerism.  This license number must be printed on all the official documents of the companies. Every direct seller of approved companies must carry an ID card with the AJL number.

Most MLM companies are in the business of health food, food supplements, traditional medicines and cosmetic & skin care. These products are subject to control and approval by the Ministry of Health, National Pharmaceutical Control Bureau. All approved products must carry the approval code BKP- MAL12345T.

All product inserts, brochures, leaflets and catalogue of health food, food supplement, traditional medicines and cosmetic & skin care must be vetted and approved by the Medicine Advertising Board. Approved product inserts, brochures, leaflets and catalogues carry a code number KKLIU12345/YYYY/ABCD.

So, to all the wise consumers, please ensure that direct sellers, be they your relatives, friends, colleagues, acquaintances or strangers, fulfill all the above-mentioned conditions before looking at their products and talking to them. If you are not cautious, there is a high chance that you will be scammed. There are now many unlicensed products being sold in the market.

Can you remember the famous “Slimming Pill” case in Singapore which caused liver failure? So, don’t be gullible.