The company had a typical MLM business model and claimed income after one became a distributor; it used Oommen Chandy’s picture, taken during a casual meet, to attract prospects

Moneylife Digital Team

Money-chain and multi-level marketing (MLM) schemes keep coming up, and all of these fraudulent schemes sport some unique model to gain legitimacy. But all of them have a typical MLM business model, which is not sustainable in the long run. Take the case of Royal Life, an MLM company based in Kerala (it has shut shop now). But potential ‘investors’ were lucky—Royal Life was operating in a state where investigating agencies have banned many such similar companies, and this one was no exception.

Moneylife has learnt that Royal Life had used the picture of Kerala chief minister Oommen Chandy to promote its MLM scheme, ostensibly to try to exhibit its political clout. But in reality the story was different.

According to a source based in Kerala, who spoke to Moneylife preferring anonymity, “The company officials met Oommen Chandy with the help of a local Congress leader. They (the officials) posed for a photo; this was being used to lure innocent people who ultimately became victims to the chain fraud of Royal Life.”

Royal Life claimed to be a promotional arm of ALGA Marketing Pvt Ltd, which it said was a “unique and innovative marketing plan.”

It is also reliably learnt that the company shut down after police action. Moneylife has earlier reported on how investigating agencies in Kerala were coming down heavily on money chain schemes mushrooming in the state. (Kerala gets tough with money swindlers and MLM companies ).
 
The business plan of the company was an MLM business model. One had to become a distributor of its products and earn income under various heads. The company claimed, “When you become a Royal Life Distributor, you can share this business opportunity with your friends or relatives, for which Royal Life rewards you with five streams of income (such) as Binary Income, Referral Income, Royalty Income, Royal Performance Bonus and Residual Income.”

In its product range, it displayed various products ranging from facial creams, energy pendants, balms and bracelets. The cost ranged from Rs1,000 to Rs12,800. On getting two more people to become distributors, the company was to pay binary income of Rs1,000 for each pair. This would have increased as more people join. Similarly, 10% of the ‘pair’ income was supposed to be earned by every distributor as ‘referral’ income, which also had no ceiling or capping. Then there was a Royal Performance Bonus to top it all, after 15 pairs were enrolled in three weeks coupled with ‘residual income’.

Of course, Royal Life had a huge product portfolio. It claimed to be operating in the e-commerce business, mainly selling medicines for cholesterol, diabetes and obesity—among other ailments. Now thanks to the Kerala police authorities, Royal Life has got a royal boot. But what about the numerous other chain-marketing, MLM and Ponzi schemes which continue to thrive all across the country?