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19 Popular MLM Scams In Malaysia That You Should Beware Of

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We apologize in advance for any misrepresentation in regards to the information listed here. Information for this piece is sourced from drazwan.blogspot.my and belongs to the third party’s opinion. We’d like to note that this content is not comprehensive. If there’s any info we’ve missed or should attend to, please let us know at [email protected]!

There is nothing more annoying than listening to someone pitch their MLM to you, often times a product they don’t even really use or they are forced to use it because of the continuity aspect of the program.

Every MLM members are hustlers as you are constantly told to “recruit your friends and family”, “talk about it every day”, “use social media to mention something every day”, “encourage your downline” or “boast about how great the product is”. Why? Because once you PAY for something, it’s a natural instinct to defend or make the most out of your purchase.  We all know its a stupid feeling to realize that you have been ripped off; which is why every MLM members are hard-headed and persistent.

Most of you would have probably been talked into joining one of them at a point of your life, so here’s a list of the most popular MLM scams in Malaysia that you should know. As a general rule of thumb, “If something seems too good to be true, it probably is”.

 

1. The Cafe Scams

Island Red Cafe collects members RM6,000 each and promised a 5% return every month. They’ll also give you a name in the ROC as a shareholder but what’s the point when they run away?

Stevens Corner, the famous mamak also opens up investing opportunities due to a drop in their business. They would collect RM3,000 per member and promise returns of RM150 monthly with plans to open up a new franchise cafe called Stevens Tea Garden. It is heard that they will make you sign an agreement that will allow them the rights to NOT pay you anything in future. If you really wish to join, ask for a copy of their agreement and consult your lawyer BEFORE paying them.

 

2. Sunshine Empire

This licensed and legal company has an impressive office at the ground level of KUB building along Jalan Yap Kwan Seng, near Menara Public Bank and AmBank building. They also have a showroom office on the ground level in the next building. Previously, Singapore’s Straits Times and The Paper published big news reminding their people to be careful and NOT to believe in them. As expected, they’ve STOPPED paying back their members and all investments are burnt.

The news published that the founder, director and group president is someone named James Phang. However, it is strange that he said he wasn’t the owner. At the end of the day, James Phang just disappeared from the company and claimed that he was just “employed”.

According to Straits Times, the investment plan which was offered was nothing more than a Ponzi scheme. James was eventually sentenced to 9 years in jail and $60,000 fine for breach of trust. Not too bad for duping investors of over millions of SGD.

 

3. MOBILEWALLET

This company is owned by 2 young men, Stanley & Rey Gan and they occupy an office in Queens Avenue Park. They have collected multi-millions over the past few years. They claimed that they have partnerships with Telekoms, Utility Board payment like Water & Electricity bills, and even Maybank was fooled by them. Advertisement billboards was once very common throughout the country. However, they eventually STOP paying their members and the victims are unable to do anything as they silently CHANGE their terms and policies, in which they have initially signed upon during registration.

 

4. Water businesses

Oxygenated and alkaline water products – Some of these are bottled water and some are filters or equipment that claimed the trick. One of the better known Company that sold “oxygen” water is SITO (supposed to stand for Selangor International Trading Organiszation and claimed that the Selangor State Government owned some share in it). The key person and founder is Dato Robert Ong from Rawang but his name is no longer in the business now. Their products are sold for RM2 to RM3 for a 350ml bottle and now concentrates mostly in the Indian market. Their Chinese and Malay targets were never successful. Their customers are made to believe that their water has more oxygen and is able to give miraculous benefits to the body.

“Water is H2O, how do we put more O into it ? Also do you know how much oxygen we breathe into our body everyday free of charge? Latest news is that this SITO Company is going to create new label to market under a new Company since the SITO name has already been tarnished. Someone informed that this Company is owing a lot of money(due to refunds) to ex-stockists but just refuse to pay them.”

SITO has then shifted industry and their MLM business has closed but planning to start again with a different name, so beware guys!

 

5. Car Fuel Booster

The famous scam MLM Company that sold strange items from the footpatch TAKARA, “cock-ring” and petrol-saving pills. It got so popular that even some grocery shops are selling them. Many of the cars who had used the pills are often sent to the workshops to clean the residual that causes malfunction. Few months ago, another MLM Company launched a fuel booster gadget, claimed that it saves up to 20% fuel and is conveniently attached to the cigarette lighter. Started off well as a binary plan but business begin to die once users find the products NOT effective.

 

6. Perfumery Products

Lampe Berger used to be the trend among high-school and college students with hundreds of victims enrolling every month in Malaysia. Some members/teams even have beautiful girls as “recruiters” to lure those “dry” young boys. This perfumery product from France with over 100 years of history are just bottles and fragrances. However, the company’s marketing plan in Asia is to claim them as “aromatherapy” products. Hong Kong TVB also aired a program that exposed their scam but their members claimed that HK’s TVB already apologised to them for the misinformation (without evidence, of course). Bel-Air have been closed in Malaysia.

Note that the biggest strength in a MLM Scam is their members will go all the way to lie in order to defend for their Company. The reason is simple; these members fear that they will not be able to make their money back if the Company collapsed. Knowing that the Lampe Berger products are moving slow, they add a line of skincare products named Estebel which was proclaimed to also have over 100 years history in France. Their targets are mainly the Malays in Malaysia and their most active members are mostly Bumis.

 

7. Energy Products – stone pendants, bracelets, mattress and pillows

They would use all sorts of gimmicks and demonstration to make you into believing them. They will do tricks and demos to prove that these products really produce positive energy BUT are there any tricks in their demo or could it be just science? Also, if there really produce energy; is it good or strong enough to help the body? Are those simple products really worth RM300 to RM3000 each? Most of the time, it is actually just PLACEBO effect taking place (capitalizing on the power of believing).

 

8. Hi-Tech products

These are bio-tech and nano-tech products which claimed to have millions of dollars of research involved in them. They will associate their products with a professor behind them and use words like “U.S.A. formula”, “German Technology” or “Nanotechnology” but without further details. If you ask were to ask for more details such as the professor profile or  the research factory’s address, they will either beat around the bush or simply state it as “trade secrets” (so they are unable to reveal the details).

 

9. Investment Schemes – Swisscash

Swisscash is over now but there are many similar and smaller businesses that are still operating. Many members are left unpaid when the company shut down.

 

10. Energy/Commodities Products

Energy and commodities MLM businesses have on the rise in the recent years due to the growing knowledge of Forex trading. Typically the modus operandi is to get individuals to invest in real gold or silver, or on an energy harvesting zone which can never be physically accessible, promising a fixed returns after every period. Members are then able to expand their profits by recruiting more ‘downline’ to invest similarly.

 

11. Health Center Scheme

Certain company claims to have a prestigious background with many years of positive history which is NOT true. Their people or associates may be long in business but MLM program is handled by separate departments. New members are told to pay a sum of money (up to RM1000) and you get NOTHING for it. All that you get is only get a membership pass that allows you to enjoy all sorts of promotions and discounts when you have medical check-ups in their health centres. They would claim that those check-ups would cost much more if done elsewhere. However that isn’t true and only those who aren’t aware of the market rate for medical check-ups will fall victim to them. Most members who paid the money ended paying even more for the check-ups at the end of the day.

 

12. Seaweed Venture Scams

Their company is located in Taman Maluri, Cheras. They will ask you to invest a few thousand ringgit to grow seaweed in their farms in East Malaysia and you’ll be guaranteed returns after harvest. To gain your confidence further, they will claim that your investment is secured by “insurance” or “unit trusts” & “trustees”. However, when you ask for further documents to prove, they will give all sorts of excuses or just ignore you because they know that there was never one in the first place. The Seaweed scam is pretty prevalent in Malaysia, so warn all your friends about it before they are victimised.

 

13. NuLife (HK)

This company is founded by a few people from Hong Kong and has been in Malaysia for over 10 years. However, their business have both flopped in Hong Kong and Malaysia due to a product scam and poor management. They’ve used a prosecuted American named Dr Jeffrey Bland which was found guilty for falsely promoting their products claim. Ever since this case was known in the US, many Malaysians got to find out that the real boss in Hong Kong is Steven Tang (an infamous conman that cheated Malaysians in another scheme over 20 years ago). Since then, their business crashed down all the way. They claimed that their Malaysian partners cheated them and started another new MLM company in Malaysia.

 

14. Arowana Fish Breeding and Oora from Germany

These scams are quite recent. Arowana Fish will ask people to invest money in breeding fishes and they’ll give you fixed return continuously and Oora from Germany which markets bio-chips and gadgets that claims to give you energy and therapeutic effects of acupuncture, tai-chi and yoga depending how you wear the gadget on your body. There was only so much as to doctors claim and paperworks, but they could never really provide any case studies to prove their actual effectiveness.

 

15. Easy-Pharmax 

This is easily one of the largest MLM scams in Malaysia which is owned by Dato Yeap. Members are tricked to invest up to RM40,000 with a false promise that the company will use an e-commerce or online selling platform to transact their goods and eventually make profits beyond means. It never happened, of course.

 

16. GRI (Global Royal International)

The owner behind this scheme is non other than multi-billionaire James Pang, the guy ‘behind’ the Sunshine Empire scam. Before Sunshine Empire, he also operated NOP and SwissCash. He operated this business remotely using a lot of representatives and MLM leaders since his passport is held by the Singapore government and cannot come to Malaysia. Those who are bold enough to call themselves a MLM leader in Malaysia can visit his rep in Malaysia or Singapore to market the company.

 

17. English-Learning Program Online

This scheme is targeted mostly to high school and university students where members are asked to pay RM100 for one or 2 years usage of online learning. Some programs like these changed names at least 2 or 3 times since they started due to poor responses and “technical problems” on their website. Their membership includes nothing tangible but instead, you’ll receive all materials online.

 

18. Genius Theme’s vacation and rewards package

Such holiday packages are being sold for RM499 to RM599 and you are promised a few nights stay in Thailand or Bali. Started by a company named Max Generation, Genius Theme sells their products to other MLM companies and also famous companies like Sen Heng. Previously Sen Heng gives the package away for free if you purchase products over RM2,000. Of course, there are other hidden costs to be paid and it’s never really free unless you pay MORE upfront.

 

19. Forex scams

Forex MLM is the new trend among youngsters as they target those who are eager to make fast money with little to no effort. Most common targets are Chinese high school, college or uni students. The promise is that they can make huge amounts of money in USD within a few trading sessions. While that is true with or without the MLM scheme in place, trading Forex in general possesses a significant risk to your invested capital. It is common for such MLM business to organize free forex classes, promoting easy money by trading to lure prospects.

Article sourced from drazwan.blogspot.my

Editor’s note: This content is not comprehensive and if there’s any info we’ve missed or should attend to, please let us know at [email protected]!

 

On related news about scam: I Was In Mid Valley When A Guy Came Up To Me Asking For Help

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