Bahrain bans MLM (network marketing)
I’m not sure how big the MLM industry was there, but news reports out of Bahrain claim that MLM opportunities have been banned.
Bahrain is a small island nation in the Persian Gulf, with an estimated population of 1.4 million as of 2014.
The ban on MLM was announced by the The Minister of Industry and Commerce on February 17th, with ‘increasing consumer complaints about such business practices‘ cited as the primary reason behind the move.
The practiced described by Consumer Protection Director Senan Ali Al-Jabery, suggest that companies being complained about would fall under a product-based pyramid scheme category.
Hierarchical and network marketing flouts rules and regulations, particularly the law on consumer protection.
The concept of hierarchical and network marketing consists in convincing a person to buy a product and then persuade others to purchase the item which allows the chain to expand.
The first buyer obtains more commissions in case he integrates more members into his network and increases the volume of sales.
Al-Jabery said that some companies adopting such operations have been contacted and urged to correct their activities and adhere to the ministerial edict.
Complaints generally arise when those at the bottom of the schemes realize there’s nobody left to recruit. Retail sales activity in such schemes are little to none, meaning those who bought in last typically lose their money.
Unfortunately no specific company names were mentioned by the Ministry.
What with Dubai emerging as a favored place to register shady MLM underbelly schemes over the last few years, I can’t say I’m surprised that some of the fallout has expanded to neighboring countries.
Hotels and hall-renting companies in Bahrain have also been instructed to prohibit the use of their facilities to promote MLM opportunities.
Sucks for legitimate MLM operating in the country, but at least scams looking to take advantage of Bahrani people will have a tough time of it going forward.
Out of curiosity I did a quick search for the term “mlm bahrain”, with affiliate promotions for DXN, Global Mobile Network (Wor(l)d GN) and Alliance in Motion popping up in the first page of Google’s results.
Of those three opportunities, DXN would appear to be the only one with a solid retail-focused compensation plan.
Global Mobile Network and Alliance in Motion both offer compensation plans that are heavily affiliate recruitment orientated.