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Qnet

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Qnet ltd, or QuestNet or GoldQuest, is a Hong Kong based direct selling company that sells a variety of products including energy products, nutrition, watches, jewelry and vacation packages.[1]

The company's marketing strategy is based on a multi-level marketing model which depends on a group of independent representatives who refer its products to consumers and receive compensation based on the sales volume of their referrals and the sales volume of other independent representatives in their teams who are arranged in a binary fashion.

Qnet is a member in the Direct Selling Association of Malaysia and Singapore,[2][3] it has offices in some Asian countries such as Indonesia, Philippines and Taiwan [4] and it also operates in other countries such as India, Saudi Arabia, Egypt and Cote d'Ivoire.

The company has also been accused of operating a product-based pyramid scheme in some countries, these accusations have often resulted in the shut down of the company by the government and the arrest of key members involved with the company.[5][6][7][8] Other forms of criticism revolve around the actual worth of the products sold by the company, the compensation plan implemented by the company which encourages the sales of products to new independent representatives rather than real consumers and degree of which the independent representatives follow the code of ethics of direct selling.[9]

History

A typical MLM binary tree structure. The blue individual will receive compensation from the sales of the downline red members.

Qnet was founded in Hong Kong in 1998 it was initially known as GoldQuest, Qnet operates as a direct selling company providing a variety of consumer products including watches jewelery, holiday packages and energy products.[1] In 2003, the company rebranded to QuestNet. In 2010, the name of the company was shortened to Qnet.[10]

The company's marketing strategy is based on a multi-level marketing model which depends on a group of independent representatives who refer its products to consumers and receive compensation based on the sales volume of their referrals and the sales volume of other independent representatives in their teams who are arranged in a binary fashion.

The plan operates by the recruitment of customers by existing Independent Representatives (IR). An IR is provided with an ID that gives access to a 'Tracking Centre' (TC) in its computer system through which the IR's sales are tracked. A TC has a left and right customer group. Every customer owns a TC which is then placed on the left or right customer side of the IR's TC. A 'direct' transaction (your sale) is counted as 1 transaction. An 'indirect transaction (someone in your TC sells) is also counted as 1 transaction. the company pays $250 each time 3 product sales on an IR's left customer group are matched by 3 product sales on the right.[citation needed][11][unreliable source?]

RYTHM foundation -derived from the acronym 'Raise Yourself To Help Mankind'- is a charity organization created by QI Group[citation needed]

Association memberhsips

The only associations that endorse the legitimacy of the company, are the direct selling association of Malaysia,DSAM, [12] and the direct selling association of Singapore, DSAS [13], and this likely happened because these two associations forced QNet to change and amend its laws in these two countries, Malaysia and Singapore, and actually, any one wants to register for this company, he finds the policies and procedures available to Malaysia [14] or Singapore [15] are very different from the file available to any other country, in fact they also Contraries to the others in some items such as the law of repurchase No. 3.01, and also the policies of the branch of Malaysia includes a law that allows any of its representative to return any product that has been purchased within six months from the date of purchase, which is of the basic laws to ensure the legality of network marketing [16], that law does not exist at all in the rest of the records of policies and procedures of the company available for the rest of the countries. It is clear that the laws of the company contrary to the laws of direct marketing, which paid to change those laws to get registered in these two organizations in Malaysia and Singapore.

The Independent representatives of this company defend their company by ensuring that it has a contract with the FIFA Organization, FAO, the race of the Formula1, and other contracts, but most of these old contracts have been terminated, and also were with the name GoldQuest the criminalized company, such as the contract with FAO, and the others are just for the dissemination and promotion of the company's ads during some sporting events [17] [18] with some other companies. On the other hand, APLI, the direct selling Association of Indonesia, considered QuestNet a pyramid scheme.[7].

Controversies

According to Bill E. Branscum, the owner of FraudsandScams.com website,[19] Qnet is considered a Hong Kong based pyramid scheme[20] that markets gold coins, Swiss made Watches, Energy products and time share vacations.[21]

On the 4th of December, 2002, Cameron Thompson, member of the Australian Parliament, identified GoldQuest as an example of Pyramid Schemes during his speach in support of the governments proposal to amend the Trade Practices act(1974).[22][better source needed] The Iranian government banned GoldQuest after what is believe to have been one the largest economic corruption cases in the countries history, prosecutors found that the pryamid scheme activities by GoldQuest led to removal of around USD500 million from the country.[5] According to many international newspapers and video news reports, the company follows a Pyramid Scheme, such as, PressTV, an English language global news network controlled by the Iranian government, had prepared a written and video report about the economic disasters caused by the company in Iran [23] [24], the France24 news report about the beginning of its illegitimate business in Africa [25] where the report explains how the company works in each country it drops its anchor in, also the report states clear that the company defend itself by posting FAQ pages and blogs which are well referenced by Google, pages where it denies every claim of its illegitimacy. An article from The Register magazine clarifies the so claimed "Contract" between Qnet and Microsoft[26] that has been used to prove the company's legitimacy, the article states that a spoken woman from Microsoft denies any official endorsement on the company, it also describes the company as a 'pyramid scheme' company. Some of the World Press News have published the criminalization, closing and arresting such company's managers for fraud in many countries.

By Country

  • Sri Lanka in 2007 when the government there started to fight pyramid and Ponzi schemes with GoldQuest or QuestNet was among the accused companies. Four company directors and senior executives were arrested. Even till April 2011, the old experince still remembered, as the Srilankan newspaper called http://www.lankika.com/ published an article about QNet's Managing Director, Vijay Eswaran, describing his company as The Ponzi scheme grabbed millions from Sri Lankans but its leaders [27][28].
  • In Nepal where more than 10,000 Nepalis have joined this scheme that was not registered with the Nepali government, the Nepali Times states that GoldQuest resulted in a huge outflow of money from the country within two years. [29].
  • In Philippines synchronized with events of arresting the company's managers in Sri Lanka, Vijay was facing other problems in Philippines described as civil dispute between Vijay Eswaran and his business partners in the Philippines. [30].
  • In Indonesia it was reported that Abdurrahman Wahid, a Former Indonesian President, had helped arresting the company's Managing Director, Vijay Eswaran, for a fraud case of losses estimated to be US$625,000 (€480,000) [31]
  • In Rwanda the case was different, as the company was first shut down because of taxes issue, as the company was supposed to register with the tax administration within a period of seven (7) days from the beginning of the business or activity or establishment of the company in Rwanda according to their the law on taxation, losses were calculated to be a sume $500,000 has been sent out of the country, evading taxes[32].[33] [34] the number of its vectims in Rwanda was hard to be estimated, but a lot of thems ensured that the hype about the Bio Disc made it hard to resist joining QuestNet [35].
  • Afghanistan in 2008, the company was shut down because its activities were carried out without any legal license from any governmental Ministry or Administration. Minister Sangin stated three major damaging effects on the country, 1-Huge economic loss to the people of Afghanistan, 2-The drain of hard currency from our country. and 3-further avoid the economic loss of their family members and relatives, whom they invite for joining this business. [36] but still there were a lot of people protesting the decision of banning the company, confused between what the company says about itself and what critics say.[37]
  • InArmenia where two of company's independent representatives have been arrested according to complaints that were lodged by citizens against two companies operating in the country under the name of “Questnet”, and other 130 people were involved in the scheme despite all of the National Security Service warnings.[38]
  • In The Sudan the company was shut down according to the Islamic Law because of the company policy of encouraging new distributors to purchase expensive products to qualify or activate their registration, which is considered Illegal according Direct Selling Organization code of ethics [39] as well as to the Islamic Law as it is considered tricking Sales[40]
  • Syria where QNet has opened a branch there in 2008 and closed in 2009, as it was registered in the Syrian government as an ordinary Importing company, while conducting multi level marketing, violating the Terms of its contract [41] [42] [43]
  • in Turkey[44] [45] where it opened during 2010 with about 150 people participating, 80 of them were later detained while police investigated them From that investigation 42 people were charged with gaining an unfair advantage.[46] In April 2011 the Industry and Trade Ministry announced they were investigating Qnet when the ministry recieved complaints that it was a rebrand of Questnet operating under the smae circumstances. The Ministry also reveal that Quest was fined a TL3.64 million(USD 1.9 million) for its illegal activities in 2010.[47].

It should be noted that QNet, QuestNet and GoldQuest are the same company which has been criminalized internationally since 2008 as shown in the site FraudsandScams.com [48] and that QNet still recognizes that name and include it within the company's policies and procedures documents and forbids its use by any of its representative personal purposes, that can be found in point (C) in the English version of QNet's policies and procedures document [49] [50]

Products

One of the products being marketed by the company, is the Amezcua Bio Disc (also spelled BioDisc and BioDisk) which the company claims that it can "redefine and harmonise the energy of water, greatly maximising its positive affect on the human body".[51] These and other detailed claims of often miraculous properties have been widely denounced as fraudulent by various scientists, media commentators and watchdog organizations.[52][53] Critics have noted that the claims are based on thoroughly debunked pseudoscientific concepts such as hexagonal water and that they have never been validated by a peer-reviewed process. The company, QNet, itself states in a document published to its IRs named FAQ – Amezcua Bio Disc[54] that there are no known test and approval bodies to date on such product.

References

  1. ^ a b "All Products". Retrieved 17 December 2011.
  2. ^ Members List | Direct Selling Association of Malaysia. DSAM. Retrieved on 2011-11-12.
  3. ^ List Of All Members. Dsas.org.sg. Retrieved on 2011-11-12.
  4. ^ "Worldwide Offices". Retrieved 16 December 2011.
  5. ^ a b PressTV – Iran busts more pyramid scammers. Presstv.ir (2010-08-01). Retrieved on 2011-11-12.
  6. ^ SriLanka banned Gold Quest long time ago. Muthamil.com (2007-05-16). Retrieved on 2011-11-12.
  7. ^ a b “Money Game Marak Lagi!”. Apli.or.id. Retrieved on 2011-11-12.
  8. ^ "TRADE PRACTICES AMENDMENT BILL (NO. 1) 2002 Second Reading". Retrieved 9 November 2011.
  9. ^ http://www.dsa.org/ethics/code/#pyramid
  10. ^ "The QuestNet Scam: A Case of Mistaken Identity". Retrieved 17 December 2011.
  11. ^ Frauds and Scams Introduction | Crimes of Persuasion – A Resource for Investigators. Fraudsandscams.com. Retrieved on 2011-11-12.
  12. ^ http://www.dsam.org.my/members-list
  13. ^ http://www.dsas.org.sg/dsas/Html/list2.htm
  14. ^ https://portal.qnet.net.my/qnver14/documents/M4/policiesandprocedures.pdf
  15. ^ https://portal.qnet.net/qnver14/documents/SG/policiesandprocedures. pdf
  16. ^ http://www.dsa.org/ethics/code/ # inventory
  17. ^ http://www.marussiavirginracing.com/partners/
  18. ^ http://www.the-afc.com/en/tournaments/clubs/afc-champions-league
  19. ^ http://www.fraudsandscams.com/
  20. ^ http://www.fraudsandscams.com/examples.htm
  21. ^ Direct Selling – About. QNet. Retrieved on 2011-11-12.
  22. ^ ParlInfo – Title Details. Parlinfo.aph.gov.au (2002-12-04). Retrieved on 2011-11-12.
  23. ^ http://edition.presstv.ir/detail/113056.html
  24. ^ http://www.presstv.ir/detail/136963.html
  25. ^ http://observers.france24.com/content/20100504-questnet-pyramid-scheme-drops-anchor-africa-burkina-faso
  26. ^ http://www.theregister.co.uk/2005/07/26/microsoft_trumpets_pyramid/
  27. ^ http://www.muthamil.com/2008/may/srilanka_goldquest.shtml
  28. ^ http://www.lankika.com/?p=13433
  29. ^ http://www.nepalitimes.com/issue/2003/02/07/DomesticBrief/4625
  30. ^ http://www.asiantribune.com/node/5905
  31. ^ http://classic-web.archive.org/web/20070512152016/http://www.iht.com/articles/ap/2007/05/07/asia/AS-GEN-Malaysia-Indonesia-Fraud.php
  32. ^ http://www.rnanews.com/economy/1685-banned-questnet-sends-global-delegation
  33. ^ http://allafrica.com/stories/200908040227.html
  34. ^ http://www.newtimes.co.rw/index.php?issue=14008&print&article=18298
  35. ^ http://www.newtimes.co.rw/index.php?issue=13992&article=18457
  36. ^ http://www.afghanbiz.com/news/activities-of-quest-net-banned-in-afghanistan
  37. ^ http://www.dailytimes.com.pk/default.asp?page=2008%5C02%5C11%5Cstory_11-2-2008_pg4_22
  38. ^ http://old.hetq.am/en/criminal/aats-3
  39. ^ http://www.dsa.org/ethics/code/#pyramid
  40. ^ http://aoif.gov.sd/ao/uploads/ftawy/eco/5.pdf
  41. ^ http://www.alwatanvoice.com/arabic/news/2009/04/08/136782.html
  42. ^ http://ar.soparo.com/index.php?option=com_content&view=article&id=7359%3A2009-04-26-12-17-39&catid=40%3A2008-05-24-21-02-39&Itemid=144
  43. ^ http://www.syria-post.net/enc/6207.html
  44. ^ http://www.hurriyetdailynews.com/n.php?n=ponzi-scheme-victimizes-many-in-turkey-2010-05-28
  45. ^ http://www.trt.gov.tr/Haber/HaberDetay.aspx?HaberKodu=a57387a7-efd2-458c-8fbc-b882386b63fe
  46. ^ TRT HABER – Saadet Zinciri Operasyonu. Trt.gov.tr (2010-10-22). Retrieved on 2011-11-12. source in turkish translated to english through google translate 2011-19-12
  47. ^ http://www.todayszaman.com/newsDetail_getNewsById.action?load=detay&newsId=240912&link=240912
  48. ^ http://www.fraudsandscams.com/examples.htm
  49. ^ https://qigroup.box.net/shared/static/ jth7js5sr0.pdf
  50. ^ https://qigroup.box.net/shared/static/nuupolb748qvuvtmy1hn.pdf
  51. ^ "Bio Disc 2 (product description)". QNet. Retrieved 11 November 2011.
  52. ^ "BIO DISC SUMMARY" (PDF). Africa Center for Apologetics Research. Retrieved 11 November 2011.
  53. ^ Fulcher, Ben (April 2008). "Feature Article: Scalar Energy" (PDF). Jeremy (newsletter of the University of Sydney Physics Society). Retrieved 11 November 2011.
  54. ^ http://www.qnet.net/static_files/pdf/FAQBioDisc.pdf
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