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Posted by A MALAYSIAN on June 07, 19100 at 21:22:17:

In Reply to: Skybiz 2000 EXPLAINED posted by Rob Smith on January 26, 19100 at 01:26:44:

Thursday, June 8, 2000

e-Pyramid scam

Ministry probes firm offering dubious

By Faridah Begum

KUALA LUMPUR: E-commerce companies are the latest target of the
Domestic Trade and Consumer Affairs Ministry for suspected pyramid trading

Minister Tan Sri Muhyiddin Yassin said yesterday he had directed officers to
investigate such companies although they came under the purview of the
Energy, Communications and Multimedia Ministry as pyramid schemes was an
offence under the Direct Selling Act 1993.

He had ordered his officers to investigate one such company after getting
feedback that it was recruiting members in a way similar to a pyramid scheme.

Describing it as a dubious scheme, he said the company allegedly allowed
members to earn money by recruiting more members without selling a
legitimate product.

Refusing to name the firm, he said it was one of the many e-commerce
companies that had sprouted here lately.

"We view this seriously and hope that the public is not taken in by their
too-good-to-be-true deals,'' he said, speaking to reporters after his ministry's
weekly post-Cabinet meeting.

He said the e-commerce scam was the latest in a series of get-rich-quick
schemes that had cropped up.

The ministry was also training more officers in e-commerce practices to nab the
culprits who operated these scams.

Muhyiddin said in view of the severity of such scams and the mushrooming of
such e-companies, no new direct-selling licences would be issued for a year.

Direct-selling companies should be operated on a base of products and
services that were legitimate where its members or distributors were entitled to
commissions based on their sales.

"Their system should not be based on a member having to pay a certain sum to
be part of the system and then to recruit others in order to earn back their initial

"This is not sanctioned by the Government and is not a practice by a legitimate
company,'' he said.

Muhyiddin also urged the public to report to the ministry's enforcement division
if they came across any sales at prestigious venues claiming to sell authentic
branded goods but were instead counterfeit products.

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