Being Cheated Once is Foolish but Twice is Stupid.

Being cheated once is gullible and foolish but to be cheated the second time by the same party is idiotic and stupid.

This statement by an accountant friend of mine in the 1980s  still stays vividly in my mind. “If I don’t cheat them, others will. It is better for me to take their monies than for others to get them” quoted the accountant. This accountant worked for a renowned public listed company before and now owns a tax consultancy business. He has dealt with Amway, Giraffe World, Image Direct and some other “fly-by-night” MLM companies. Shame, guilt and remorse are not in his dictionary. He justified his action on the G&G Malaysian mentality.  Bingo!

The greedy and gullible Malaysians re-affirmed his statement. It still holds true today. What is wrong with  Malaysians.  It seems corruption, abuse of power, stings, scam and cheating are accepted norms in Malaysia.

This is a really sad scenario. Monkey see monkey do situation in Malaysia. When the Leaders of the country has no integrity,  so are its’ citizen.

Early this year, the collapse of Fusion Excel (trading under FE Malaysia Sdn. Bhd.) and Edgeworth Property were reported only in a small column of the local newspaper. No HooHaa. 

The millions of  ringgits being ripped off by the scams were not officially reported.

The gold investment scam was reported in this blog way back in 2010. Read http://mlm-hoohaa.blogspot.com/2010/10/goldbullion-scam.html. Nobody pays attention. The Authority closed both eyes. VVIPs were also involved in the scams. Not until lately, with the raids on four gold investment companies. They acted too late, when the perpetrators have achieved their target and the cracks were already too wide to cover up in the “investment scheme" and somebody lost money and complained.

Similarly, with Fusion Excel’s case.  Many government officers, police and academicians were involved. Monthly prospecting and opportunity meetings were conducted in the hall of Universiti Pertanian Malaysia, plus many other private locations. The Ministry of Domestic Trade and Consumer Affair has granted a MLM licence to this company for many years.  until January 2012, when the licence renewal was withheld.

Sun Newspaper cutting.

How can such a company operating an illegal scheme be granted a MLM licence?  And worst of all, they conducted regular meetings at a premise of a government institution, without arousing any suspicion.

Based on the observation of the industry players and the government practices, a new MLM company usually commence with a legitimate business model and commission scheme. With some “Kopi-O” money paid, MLM licence is granted to the company. Along the way, the business plan changed. Either the Ministry of Domestic Trade is not notified of the change of plan or the Ministry’s officers do not comprehend the changes and just sleep on it. Another scenario is the legitimate MLM company operates a separate business plan with an offshore entity and web hosting.  The local MLM operation is only a front to recruit members to participate in the offshore scheme. And this is out of the reach of the arms of law in Malaysia. But gullible Malaysians simply go for it without a single question raised, as long as the initial return is good.

Most of the Malaysian scams operated  with  online websites, either from Hong Kong, Bermuda or Cayman Island.

This is the most likely scenario of Fusion Excel Malaysia. The founders of FE Malaysia Sdn. Bhd, were alleged to have raked RM450 million from Malaysian distributors. This is not the end of the story. After the collapse of FusionExcel, the founders formed another company called Quantum Life International (QLI) and invited all ex-Fusion Excel distributors to join this new company with the promise to recover the losses from Fusion Excel. Can you believe this?

Being cheated once is foolish or “Suay”(bad luck) but to allow oneself to be cheated by the same party again is really STUPID.  And sadly, you can find many Malaysians in this category.

There is a company called BioExcel that manufacture and sell similar products marketed by FusionExcel.

BioExcel Products	FusionExcel Products
Genuine Bioexcel Classic Quantum Scalar Energy Pendant RM 99.9	Buy 3 QP Free 1 QP at Price RM640 + Free Poslaju Delivery or (if you want to have your own buying package, welcome to call us) Buy 1 set(1QP + 1QF + 1QS) at Price RM595
Authentic Bioexcel Magnetic Bracelet Silver Plai... RM 149.9	Price (net): 155 USD RM480.50

Take Two of the popular products of BioExcel and FusionExcel and  Just compare the prices.

The same products are being sold by other MLM companies, including Cosway.

A response to an enquiry of the price difference from BioExcel is truly justified and right to the point.

What is the difference between BioExcel and FusionExcel?

BioExcel and FusionExcel are two different brands. Please note, the effectiveness and all other characteristics of the products are common or same in both brands’ products. BioExcel is an Australian company whereas FusionExcel is a Malaysian company. FusionExcel products are a bit costly because it’s an MLM (Multi-level Marketing) company. (quoted by BioExcel on website)

Check out the website: http://www.bioexcelinternational.com/category/products

QLI = Quantum Life International the suppose savior of FE victim. The news was released by the off-shore office of FusionExcel. This is the place where the illegal scheme website was hosted. Every transaction was done online and in US Dollar only. This was a money game (Ponzi) scheme based off-shore and out of reach of the Malaysian Authority.

Email From Mr.Arvind (FusionExcel Offshore Office), to FusionExcel distributors in Malaysia.

Dear Team Partners,

As I am writing this e-mail, I am physically in Fusion Excel International Office in Hong Kong. I have GREAT NEWS for everyone. The news will be in FE website in the next couple of days. However, I have giving you all a head start so that you can have peace of mind.

Last night I attended the meeting with many key leaders together with Mr. Paul Ting and Mr. KS Lee. This is the summary of the meeting.

Fusion Excel International is the branding and is the International company, which will be public listed. FE Brands (M) Sdn Bhd is only the Malaysia Licensee, which happens to be the Head Quarters. It is only FE Brands (M) Sdn Bhd that is winding up because of the MLM License problem. Other subsidiaries and Fusion Excel International brand is unaffected.

FE Brands (M) Sdn Bhd is in crisis. It started when the MLM license was not renewed, which created a domino effect of lost sales, lost confidence and panic massive withdrawal. Paul Ting and KS Lee have not runaway as rumored, but rather working very hard to help FE members. Here are the solutions.

1) A new MLM company with a new MLM license will be set up. There won't be anymore of those packs, such as China or Corporate packs that pay passive income. Only the normal packs that are marketed thru MLM way. Expected for this new company to start operate around end April 2012.

2) A new product will be introduced. It is call Quantum Life. It is a high quality water machine, that produces Alkaline water. More info coming soon..

This email was sent from FusionExcel office in Hong Kong to Malaysian distributors.

What a joke is this? (Extracted from FE Facebook)

 (This statement was released by a group of FusionExcel distributors, the big guns (leaders))

After the  closure of FE Brands (M) Sdn Bhd on 20th February 2012, when the MLM licence renewal was withheld by the Ministry of Domestic trade,  a group of FE Leaders decided to voluntarily form a committee to find a solution to the crisis. This group supported QLI.

Its objectives were:

1. To recover all unclaimed stocks from the purchases of the company's product packages;

2. To recover all the outstanding bonuses owed by the company to all its distributors;

3. To recover all shares from the company's promised and intended overseas Initial Public Offering (IPO).

They can only dream. After all, most MLM companies only sell dreams.

Can you believe how idiotic are they?

From Health Food to Fast Food

The roller shutter is always down. 
Nobody inside the shop.

This is  an established and legitimate MLM company with 25 years track record. But four years ago, this company changed direction into franchised retailing. Since then, the ex-distributors/agents of the company opened many retail shops.

What signal is being sent to the direct sellers and end consumers on the MLM products? Does this means that MLM is not a viable business anymore? The real reason was not made know to the public.  Perhaps, the influence of the old saying is too strong to ignore –“The grass is greener on the other side” 

Do you remember when Unilever and Sara Lee moved into MLM business? And can you recall when Electrolux exited MLM business? 

All the other shop lots are opened.

This company  is renowned for its superior quality herbal food supplements, based on the philosophy of regeneration of the human body.  A Taiwanese immigrant started this business in the early 80s, with his laboratory and production facility in a garage in Utah, USA. The business was very successful and grew phenomenally during the first 25 years.

You can dine in or take away.

Lunch Saver Fast Food by Sunrider.
From Health Food to Fast Food.

When the company was in MLM business, fast food and junk food were barred from it's office premises. Staffs were prohibited from bringing in or eating fast food in the office. 

The scenario is completely different now. Some franchised retailers stick to the core business of the company.  Others deviated from the reputation of the health food business and moved into the “junk” food business. Some diversified into complementary business of beauty salon. 

And there are a few deserted “showrooms” to "swat houseflies (拍苍蝇)". Just wondering how the shop proprietor/franchisee  managed this. 

Worst of them are the shops with the roller shutter often down but with all the lights switched on, but nobody inside the  premises. This is like teaser, inviting peeping. 

There are more choices of food available here. Rice set and spaghetti or pasta.

This retail outlet is more of a fast food restaurant than a franchised retail shop. The fast food business looks pretty good, especially during the lunch hours.

All lights switch on
but nobody inside the shop

A few of the shops have the roller-shutter down very often. Probably the franchisees/proprietors are busy at other places or other businesses.

The neighbouring shops are opened for business but Sunrider's shop is always closed.
This is at Lot 10 Shopping Mall, Level 2 Bukit Bintang , Kuala Lumpur.

Health Food into Fast Food

Distributors of an international MLM health food company turn into Fast food retailers. Watch out for the upcoming posting soon.

You can find these retail outlets selling the health food, side by side with their fast food offering in the shopping malls and arcades. Some of the distributors are providing facial cleansing and manicure services.

Are U in the G&G Group?

There is no shortage of G&G peoples around the world to feed the scammers.  The scam business has sustained for ages, thriving on this group of peoples.

Who are these G&G peoples?  Are they laymen with no formal education and lack of knowledge?  The answer is NOT ALL  Some of these G&G peoples are learned and professional, with MBA and PhD qualifications. Then, how they became victims of scam?

The G&G are Greedy and Gullible people, blinded by money.

Recently, I was invited to a Fine Wine Investment dinner.  This is not a scam but a genuine investment scheme in fine wines. The investment broker provided comprehensive services from direct selection and purchase of fine wine from vineyard to storage in a bonded cellar in Singapore and final sale of the  wine via auction (after 3 to 5 years).  Wines appreciate in value due to aging, inflation and diminishing supply. For example a bottle of 2003 vintage wine, one bottle consumed is one bottle less in the entire inventory worldwide. Hence, there is always a demand for fine and aged wine.

The entire investment scheme is genuine but what was promised verbally differs from the fine prints in the terms and condition of the investment.   If one is gullible, this is the trap readymade.

Yes, one will make a profit on this investment but the profit is not the anticipated profit  as forecasted by the broker. One can realized the trade profit but the net profit after deducting the undisclosed charges can erode the attractiveness of the entire investment.  Instead of earning a cumulative return of 90% over the 5-year period, perhaps the net discounted return could be as low as 6% per annum at present value. Moreover, there is this question of liquidity of the investment.

Have you heard of Edgeworth Properties in Canada?   This is a land investment scheme similar to UK Land, Profitable Plot and Walton Properties.  Malaysian investors are estimated to lose  RM71 millions in this Edgeworth Properties scheme.

UK Land was the first to collapse a couple of years back, followed by Profitable Plots. Now, it is Edgeworth Properties. So, who is going to be the next land investment scheme to go under?   You can guess  and should know by now.

Edgeworth Properties collapsed last week and is now placed under monitor by the Canadian Authority. Grant Thorton, an international accounting and advisory firm, is appointed the special monitor and receiver for Edgeworth Properties.  Refer to this website for details: http://www.grantthornton.ca/services/reorg/bankruptcy_and_insolvency/edgeworthme

Edgeworth Properties’ office in Malaysia is located at the upmarket Bukit Damansara.  Edgeworth sell the land investment scheme to Asians via direct marketing and MLM

http://edgeworthonline.net/ew_prop/malaysia.html
 Impressive office to draw the G& G peoples

Edgeworth Properties Malaysia Sdn. Bhd.

15-4-3. Bangunan Setia 1,
Lorong Dungun, Bukit Damansara,
50490 Kuala Lumpur,
MALAYSIA

Phone (603) 2093-8216
Fax (603) 2093-2890

Contact: Lee Kim Haw
Country Manager

CNW reported:  Edgeworth Properties Inc. granted protection under Companies' Creditors Arrangement Act

http://www.newswire.ca/en/story/876368/edgeworth-properties-inc-granted-protection-under-companies-creditors-arrangement-act

The Bankruptcy office of Canada: http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br02733.html

For Edgeworth Properies scam report read: http://www.scaminformer.com/scam-report/edgeworth-properties-edgeworth-properties-investment-fraud-burlington-ontario-c40366.html.

The G&G peoples have short memory and never learn from their past mistakes. Many G&G peoples lost money to scammer, not once but repeatedly.

Shifting the Goal Post while the Game is in Progress

Have you heard direct seller uttering this statement “Shifting the goal post while the game is in progress”.  What do you understand by this? To the MLM companies, they  politically  called this the “Enhancement of Marketing Plan”.  In reality, this simply means changing the rule of the games.  This means change the rule for qualification for ranks  and payment of commission to direct seller. To put this plainly, it means “cheating” direct seller by manipulating the commission scheme.

The MLM companies can change their “Marketing Plan” as and when they deemed fit.  Direct sellers are perpetually at the mercy of the MLM companies. Some MLM companies changed their marketing plan a few times each year. Distributor/agent should stay away from these MLM companies.

The Financial Freedom and Independence is really a Myth.  You can never achieve financial freedom and independence by being a direct seller/agent for any MLM companies.

Not only the MLM companies are shifting the “goal post” , MLM companies are also shifting the channel of distribution.  It just puzzled me which is a better channel of distribution for consumer products., Conventional or Direct Selling?

Having worked in the FMCG and the Direct Selling industries for many years and also involved directly in direct selling, I do not have a clear vision of the direction these two indurstries are heading to.

Direct Sellers no longer enjoy the exclusive right to sell directly to consumers. Conventional business channel companies are also selling direct to consumers,  via their retail outlets.

In the conventional channel of distribution, the manufacturer or producer  move the goods to stockist or exclusive distributors follow by  wholesaler to retailer and finally, to the consumer. Now, the new conventional distribution channel also involved the Hypermarket. Hypermarket purchased goods directly from producers or importers.

The direct selling industries comprise Multi-level Marketing, Single-level Marketing(SLM), pyramid scheme, binary scheme and a host of other variations. This involves the producer selling the product “directly” to the consumer through a network of direct sellers. These direct sellers are nothing more than selling agents called by different terms and titles such as member, advisor, distributor, director, associate and other glamorous terminology.  Whatever term is being used, these are nothing more than just selling agent.

The brochure is distributed by agent
at shopping mall and in your letter box

The fast moving consumer good (FMCG) companies are moving  into direct selling. And the direct selling, Multi-level Marketing (MLM) companies are moving into conventional channel of distribution.

Simply put it, the grass looks greener on the other side.

Well established FMCG, like Sara Lee and Unilever, are already in the direct selling business. Their direct selling is a hybrid  of distribution channels.  They set up retail outlets and use selling agents to market and distribute the  products to the consumers.

Established MLM companies like Amway and Cosway are moving in the reverse direction.  Traditionally, they relied 100% on their selling agent to market and distribute their products. Now, some are opening retailer outlets, supermarket style, to complement their agent’s network. Cosway is opening chain of retail outlets and invite selling agent and new entrepreneurs  to operate and manage these outlets.

Moreover, the MLM companies are breaching their own golden house rules of bringing their products directly to the consumers, without the added cost of Advertising and Promotion (A&P).

Advertisement in The Star newspaper

Today, you can see all these established MLM companies advertising on the mass media.  No medium of advertising and promotion is excluded. You can see highway hoarding sign board, newspaper advertisement, radio and television advertisement,  internet advertising, leaflet and flyers being distributed  on the street, LRT and monorail stations, shopping malls and house letterbox.

The MLM companies have removed their own proclaimed competitive advantages of No Advertising and Promotion, No shop overheads, and No fancy packaging. Worst of all, the level playing field among their own agent is removed.

Will Aviance follow LUX?

Will Unilever Aviance follow the path of Electrolux LUX?   LUX was a direct selling division of the giant Swedish home appliance manufacturer, Electrolux. LUX was established in the late 1960s and the company has activities in more than 35 countries. Lux sells high-end household appliances, such as vacuum cleaners, water purifiers, washing machines, and air cleaners directly to consumers.

In 1998 Electrolux divested LUX division to a group of investors with broad experience of direct selling. The owners are Reinhard von der Becke, formerly president of the direct selling group AMC International, Jonas af Jochnik, founder and co-owner of Oriflame International, and Philip Zepter, founder and owner of Zepter International.

The purchaser, Lux International AG, continues to sell products under the Lux brand name. Electrolux will be the main supplier.

A subsequent management buy-out of the LUX business in Malaysia changed the company’s name to Blondal.

Electrolux group re-enter the Malaysian market a few years back, selling the home appliances through conventional dealer outlets.

Blondal continues to sell it’s product under LUX Appliance.

What is Unilever’s long term commitment to Aviance?  Will it persevere with all the regulatory obstacles and the constantly changing direct selling rules in Malaysia?

Which is a better channel of distribution? Direct selling or conventional retail outlets via stockist and wholesalers?  Direct sellers like Cosway, Amway and a few established players are opening retail outlets and franchised stores.  But the conventional channel marketers are moving into direct selling, albeit some variation. Aviance is a combination of retail franchised store plus direct selling. Hence, they called it Multi channel business.

Island Red Cafe Scam owners fined and jailed

 Island Red Café Scam.

Father and Son team found guilty.

Who says crime doesn’t pay? For cheating 93 people RM1.04 million, the fine is only RM160.000 plus one day jail sentence.

SHAH ALAM: A father and son have been sentenced by a Sessions Court here to a day in jail and fined a total of RM160,000 after they admitted to two counts of cheating and misleading investors of over RM1mil in an Island Red Cafe programme.

Syarikat Island Red Cafe Franchise Sdn Bhd executive director Teow Wooi Huat, 45, and his son Chee Chow, 22, who is also a director at the company, were charged at the Ampang Sessions Court on Feb 9 last year with fraudulently inducing 93 people to invest RM1,040,400.

They had committed the offence at the company’s premises in Pandan Indah between Jan 1, 2008 and Feb 28 last year.

They also pleaded guilty before Judge Aslam Zainuddin to offering shares of the company to the public through the programme although at that time, it was not involved in buying and selling shares.

For the first offence, Teow and Chee Chow were each sentenced to a day in prison and fined RM20,000 in default of 20 months’ jail.

They were also slapped with a day in prison and fined RM70,000 and RM50,000 respectively – in default of 30 months jail – for the second offence.

Judge Aslam ordered for the jail sentences to run concurrently.(Extracted from the Star).

Malaysia is a fertile ground for MLM Scam. In spite of the Direct Selling Act, with tough regulatory control, MLM scam still flourish in Malaysia..

Everything on earth are being sold via MLM.  Today, Burial plots, cremated ash compartments at  COLUMBARIUM, education programs, Sea weed farming  and Swiftlet farming (birds nest) are being marketed via direct selling channel.

There are two reputable and genuine cemetery management companies, Nirvana Memorial Park and Nilai Memorial Park selling burial plot and cremated ash compartment. These burial plots and compartments are transferable and hence, became investment properties for speculation.

A few new organisations are joining the bandwagon. Are they genuine players or scam? No research is done on them yet.

Malaysian being gullible and greedy would be easy target for the unscrupulous MLM players. The key words used by these crooks are 

"Be the early bird to reap the reward. Otherwise, you loose out to those who join earlier and over-ride you”.

This is their tactics to secure your commitment. If you understand the MLM marketing plan fully, irrespective of when you join the MLM company, you do not loose anything. MLM company pays your commission based entirely on you and your group’s (your sponsored downlines) sales volume. Nothing else.

Do you homework and check the background of the MLM company before parting with your money.

There is no easy money and no free lunch.