The Andhra Pradesh High Court did NOT determine Amway India was an illegal money circulation scheme

In news out of the state of Andhra Pradesh in India today, Amway India CEO William Pickney has been arrested and taken in to custody for the second time following what can only be called frivilous and false allegations against the company. I’ll post some more on this but first I want to address a lie falsehood that is continually spread about past legal proceedings against Amway India. This lie was repeated in numerous newspapers today, and has done in the past as well. Here’s one example from today, reportedly from an Andhra Pradesh Police statement –

a division bench of the High Court held that the scheme of Amway is illegal Money Circulation Scheme and falls within the “mischief of definition of Money Circulation Scheme.

A little history is necessary to understand the situation here.

In 2006 Andhra Pradesh state police (CID) shut down Amway in that state claiming it violated India’s Prize Chits and Money Circulation Schemes (banning) Act.

 

Amway petitioned the High Court and an injunction was issued against the CID, allowing Amway to reopen. Amway then went further and asked the High Court to dismiss the CID case completely. The High Court rejected that request, stating -

if the allegations contained in the report of C.No.1474/C-27/CiD/2006 dated 24-9-2006 are taken on their face value they make out an offence punishable under the provisions of Sections 4, 5 and 6 of the Act.

The “allegations contained in the report” are the Andhra Pradesh Police’s claims about how Amway operates. The High Court simply said that if what the Police claim is true, then Amway is in violation of this act, so the case shouldn’t be dismissed and the allegations should be investigated. In August, 2007 the  Indian Supreme Court ordered the Police to complete their investigation within 6 months, so the case could proceed. After 7 years it still has not been completed.

Here are three key examples of some of these “allegations” –

“a person who joins as distributor is required to enroll six persons”

False. A person who joins Amway isn’t required to do anything.

“the money the person at the top of the group is supposed to get according to the scheme includes the money which the first member, pay either towards subscriptions (initial/renewal) or by selling products.”

False. Distributors don’t earn any income at all from subscriptions.

From renewal fees, Amway earns “easy/quick money sans any service to the distributors/ members.”

False. Amway provides significant services to distributors in exchange for membership fees. Furthermore, the “easy/quick money” part of the law in question is regarding promoting you can earn it by joining Amway. Not that it’s quick and easy for Amway itself. (note: these fees have since been removed in Amway India anyway)

I completely agree with the Andhra Pradesh High Court! If the allegations are correct then Amway may be in violation of Prize Chits and Money Circulation Schemes (banning) Act, so a full court hearing is a perfectly reasonable thing to have to establish whether the allegations are true or not, and it would be unreasonable for the High Court to intervene and simply dismiss the case before it had even started.

Nearly 7 years later this case has still not proceeded, and the Andhra Pradesh Police are outright lying wrong about what the High Court said.

What does a Professor of International Business think about Amway?

Professor Ing Jiří Jindra, CSc.  is a Full Professor at the University of Economics, Prague, in the Czech Republic, with nearly 100 academic papers published in peer-reviewed academic journals. A few years ago he was interviewed and asked what he thought about Amway. A new Czech blog, Amway Fakta, has posted a video of the interview with English captions. Have a listen (or read! don’t forget to press the CC button to get the english subtitles) to what a  expert says about the Amway business.

Thanks for the great work, Amway Fakta!

Amway North America proposes biggest changes to compensation plan in 25 years

Amway LogoAt the recent North American Diamond Club, Amway announced a proposal for significant changes to the basic compensation plan in Amway’s oldest market. Probably the most obvious change is the removal of the 3% and 6% bonus brackets, combined with halving the group volume requirements for 9% down to 300PV.

Replacing the 3% and 6% bonus levels will be a tiered “rewards” system offering discount coupons on Amway purchases the following month. For generating 100-149PV IBOs will earn a $10 discount, for 150-199PV $20 and for 200-299PV, $30. This program is similar to one introduced in Amway Europe a couple of years ago, where IBOs receive a 10€ discount coupon to use the following month. Unlike North America, however, the 3% and 6% bonuses remain (albeit at the higher volume levels of 200 and 600 points). Continue reading

Amway’s new sponsorship revealed!

This was posted a few days ago and removed at Amway’s request. The announcement has now been officially made at Diamond Club, but remember – TTAA had the news first! :)
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Last week, following a teaser video released by Amway,  I asked What is Amway’s mystery new sponsorship? Well it seems the answer has leaked on Amway’s website (thank’s Carl for the tip!) so 3 days before the announcement at Diamond Club we can break the news that ….. Amway has entered an exclusive partnership between Amway, the United Football Coaches’ Association, and USA TODAY Sports. The sponsorship reportedly covers the next three College football championship games and playoffs as well as the coaches poll.


USA Today seems to have leaked the info more than a month ago, with their NCAAF Coaches poll website already mentioning “The Amway football coaches poll” (eta: after my original post revealing the sponsorship, the references to Amway on this page were removed. I expect they’ll be back soon, now that the announcement is official)

I’m not quite sure how this sponsorship “has the potential to capture the attention and active participation of more than 2 billion people!” but … ahhh …. look at that, the original pre-announcement on amway.com doesn’t say that any more! It now says – “has the potential to capture the attention and active participation of millons of people!”

That seems a little more realistic! For non-Americans, the NCAAF is College American Football and it has a HUGE following in North America, with upwards of 50,000,000 tickets sold to college football games. So while not quite the global impact the initial announcement suggested, this is a very significant announcement for Amway North America.

I’ve read the wikipedia article, but to be honest I’m not sure that I grasp what the NCAA Coach’s poll is, but it appears to engage a lot of people – can a fan explain in the comments?

What is Amway’s mystery new sponsorship?

Amway North America has posted a video teaser to a new sponsorship deal –

The video references earlier sponsorship deals, with a “Crown” and a “Champion”, with a football as a hint. It’s obvious these refer to Amway’s earlier sponsorship of the Miss America contest and their recently retired sponsorship of NFL legend Kurt Warner.

But what’s the new deal? The introduction to the video on Amway’s website says –

Get ready for a sponsorship announcement that will really move the ball!
This month, Amway will kick-off an exclusive national sponsorship program that has the potential to capture the attention and active participation of more than 2 billion people! This history-making partnership will provide an undeniable appeal to individuals of all ages! Look for complete program details to be announced on February 19.

In the meantime, you’d better put a helmet on because it’s going to be a huge hit!

We have to wait a little over a week until the announcement, but I can’t help but theorize – it’s a national sponsorship program, which implies the United States, but it has “the potential to capture the attention and active participation of more than 2 billion people”, which is way more than the entire population of North America – so it’s a national sponsorship with global reach.

But how can a sponsorship of some US based sport gain the active participation of people around the world? Or is it a sport? “Champion” certainly implies it is.

So I googled around. Around 3 billion people watched the last Football World Cup. I’ve been unable to find data for the NBA, but it has big coverage in China – Amway’s largest market. The NFL is over for the year. NHL doesn’t have the global coverage. Formula 1 does, but it doesn’t tie in at all with Amway’s health & beauty market image, nor does the hint in the headlin for “move the ball” fit.

Football initially seems the most likely market – Amway sponsors the Amway Canadian Championship, they work together with AC Milan in Europe, and have previously sponsored both the San Jose Earthquakes and the LA Sol, as well as footballing superstars like Ronaldinho and Marta.

Frankly I’d be stunned if Amway sponsored the World Cup finals, but it’s in Brazil, so it’s not a “national sponsorship” for the US. Neither would say, sponsorship of the Champions’ League in Europe. The only US-based sport I can think of with large global appeal is the NBA – so perhaps Amway sponsoring the NBA finals?

Only other possibilities I can think of – US Open Tennis, US Open or Masters Golf? Any others?

And how does any of this get “global participation”??

I guess we just have to wait and see!

Update: Major League Baseball is another obvious option I missed – it’s a national sport in the US and it involves both balls and helmets. Amway has an existing relationship with MLB – but does it actively engage 2 billion people? Frankly I’m beginning to suspect I’m completely on the wrong track – heck, it could even be something with BodyKey and a weightloss related TV show like The Biggest Loser? After all, it’s estimated 2 billion people are overweight, and I’ve discovered that Amway and The Biggest Loser Resorts share the same supplier for their weightloss support websites.

Update2: Amway’s new sponsorship revealed!

Get the facts about Amway

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