criminal-law fraud india finance
How to stop pyramid MLM in India
<p>Pyramid Multi Level Marketing in illegal in India, where the source of income is from recruiting downline and the joining fees.</p>
<p>I have seen a lot of such companies working: some of them are registered with the Ministry of Corporate Affairs and have a valid Company or Director Identification Number (CIN/DIN).</p>
<p>Legally how/where can one make a report to stop these companies, and take action against them by government?</p>

<p>Multi Level Marketing is perfectly legal in India (hence the CIN/DIN registrations) unless it falls foul of one or more of the following to create, for example, an unlawful <a href="https://en.wikipedia.org/wiki/Pyramid_scheme" rel="nofollow noreferrer">pyramid scheme</a>.</p>
<ul>
<li><p><a href="https://indiankanoon.org/doc/1621737/" rel="nofollow noreferrer">The Prize Chits and Money Circulation Schemes (Banning) Act 1978</a> and/or;</p>
</li>
<li><p><a href="https://consumeraffairs.nic.in/sites/default/files/file-uploads/direct-selling/Direct%20Selling%20Guidelines%20Final%20_0.pdf" rel="nofollow noreferrer">Direct Selling Guidelines 2016</a> (especially <em>Clause 8: Prohibition of Pyramid Scheme &amp; Money Circulation
Scheme</em>) and/or;</p>
</li>
<li><p><a href="https://indiankanoon.org/doc/1733066/" rel="nofollow noreferrer">Consumer Protection Act 1986</a></p>
</li>
</ul>
<p><strong>Legally how/where can one make a report to stop these companies..?</strong></p>
<ul>
<li>One should make a complaint to the police, colloquially referred to as a First Information Report or F.I.R., in accordance with <a href="https://indiankanoon.org/doc/1980578/" rel="nofollow noreferrer">s.154 of the Code of Criminal Procedure1973</a>:</li>
</ul>
<blockquote>
<p>(1) Every information relating to the commission of a cognizable offence, if given orally to an officer in charge of a police station, shall be reduced to writing by him or under his direction, and be read Over to the informant; and every such information, whether given in writing or reduced to writing as aforesaid, shall be signed by the person giving it, and the substance thereof shall be entered in a book to be kept by such officer in such form as the State Government may prescribe in this behalf.</p>
<p>(2) A copy of the information as recorded under sub- section (1) shall be given forthwith, free of cost, to the informant.</p>
<p>(3) Any person aggrieved by a refusal on the part of an officer in charge of a police station to record the information referred to in subsection (1) may send the substance of such information, in writing and by post, to the Superintendent of Police concerned who, if satisfied that such information discloses the commission of a cognizable offence, shall either investigate the case himself or direct an investigation to be made by any police officer subordinate to him, in the manner provided by this Code, and such officer shall have all the powers of an officer in charge of the police station in relation to that offence.</p>
</blockquote>
