We use the following parameters to ascertain whether an entity is carrying on a money circulation scheme or a genuine direct selling operation:


  1.  Compensation plan -While looking at the kind of compensation plan, whether it is Direct / Single level / Multilevel, the prime concerns that a compensation plan can generate are in terms of:
    • Aggregation (Cumulative/Non-Cumulative)
    • Pay-out period(As it happens/Daily/Weekly/Monthly)
    1.  Sustainability(Pyramid and Money circulation or the Mathematical viability of the commitments given in the compensation plan). A compensation plan that promises fixed returns that the operation   cannot meet practically, in the long run, would indicate that the entity is carrying on an unviable business.
    2.  Earning opportunity(Top- Heavy / Equal opportunity)
    3.  Marketing organization - The determination of the number of Front line and generations of the marketing organization vis a vis. The commitment to pay-out distribution via the compensation plan   helps determine a business's viability. Marketing organization based on Frontline can be Single-leg, Binary, Trinary, Matrix or Infinite and based on generations can be direct, single-level or   Multilevel.
  2.  Intentions to deceive -Intention to deceive is a reasonably subjective determination and is determined on an in-depth analysis of the activities and/or the information available in the public domain,     the  kind of information supplied by it to the participants/investors / independent contractors, prospects, customers, consumers and the public in general, the marketing materials/official website it   claims  to sell/provide among other factors.
  3.  Products / Service / Commitments -We also look at the products/services it sells/claims to sell and the nature of commitments it makes concerning the products on various levels.
  4.  Adherence to law -Among various laws that a direct selling entity must comply with, we analyse whether the company follows the rules, especially the consumer protection (direct selling)rules, 2021,   Consumer Protection Act, 2019, the consumer protection(e-commerce)rules, 2020 and other allied laws in letter and spirit which requires an in-depth analysis of their operations, business plans and other   documents.