To determine if an entity is conducting a money circulation scheme or genuine direct selling operation, we analyse the following parameters:

  1. Compensation plan- (Multilevel) The prime concerns that a compensation plan can generate are in terms of:
    1. Sustainability (Money Circulation Scheme -Mathematical viability of the commitments in the compensation plan).
    2. Earning opportunity (A pyramid scheme is designed to benefit the early participants rather than those who join later. In addition, a high cost purchases at regular intervals is necessary to benefit from the downline organisation turnover).
  2. Intention - Determining the intention (to deceive) is a subjective process that requires a thorough analysis of various factors. These factors include the information available in the public domain and the type of information provided to investors, independent contractors, prospects, customers, consumers, and the public in general. Additionally, factors such as marketing materials and official website content are considered.
  3. Products / Service / Commitments - Perform a comprehensive analysis of the products or services an operation offers and the commitments it makes at various levels.
  4. Adherence to relevant laws – Evaluation of an operation's adherence to various laws, including the Consumer Protection Act (2019), the Consumer Protection (Direct Selling) Rules 2021, the Consumer Protection (E-commerce) Rules (2020), and other related laws. This requires thoroughly analysing their modus operandi, and other relevant documents to ensure they follow the intended rules.