The Financial Services Commission (FSC) is reminding the public to exercise caution when considering investments in Multi-Level Marketing (MLM) schemes. While MLMs may present themselves as legitimate business opportunities, some can be risky or even illegal, leading to significant financial losses.
Here are some key things to consider before making any investments:
1. Research the Company/Person(s): Thoroughly investigate the background, business model, and reputation of any of the company or persons involved. Verify whether the company or persons associated with the investment are registered and regulated by relevant authorities like the Financial Services Commission.
2. Understand the Business Model: Genuine businesses generate revenue primarily through the sale of products or services, not recruitment of participants. Be wary of models that emphasise recruitment over product sales.
3. Check for Red Flags: Promises of high returns with little effort, emphasis on recruiting others, or pressure to make large upfront investments are warning signs.
4. Consult with Experts: Seek advice based on your financial goals and wherewithal from regulated individuals or companies set up to provide such guidance.
The public is urged to approach all investment opportunities with caution and conduct their due diligence to safeguard their financial well-being.
It is an offence for persons not registered or licensed with the Commission to offer investment advice, sell financial products or deal in securities.
The public is encouraged to notify the Commission of any situations where entities or individuals engage in these practices without being duly registered and/or licensed. (PR/GIS)
