MLM Scams Drive Suicides, Violence: Hyderabad Police

HYDERABAD: Hyderabad police have raised concerns over the growing social and psychological fallout of multi-level marketing (MLM) and money circulation schemes, warning that victims are not only suffering financial losses but are also being pushed towards suicides, violent confrontations and criminal consequences.

Senior police officials investigating the QNET-linked IGNITE network said recruits are often pressured to bring more people into the chain, forcing them to enrol relatives, friends, neighbours and acquaintances in hopes of recovering their investments. However, once the promised returns fail to fall in place, many are left trapped in debt and emotional distress.

Special Branch joint commissioner of police S.M. Vijay Kumar said investigations in certain cases are also being examined under provisions relating to abetment to suicide, as victims who suffer severe financial losses and social humiliation are reportedly ending their lives. “Many people do not understand the magnitude of such economic frauds. A majority of cases also go unreported because the amounts involved are often between Rs 5,000 and Rs 50,000, and victims hesitate to approach police,” Kumar said.

Citing an incident from Nellore, Kumar said a 26-year-old man from Siddipet, who had invested in a QNET-related investment scheme and suffered financial losses, allegedly committed suicide. “These fake investment schemes are also resulting in such serious incidents, which can only be prevented by staying away from such fraudulent investments,” he said.

Referring to another case, he explained how MLM schemes were also triggering criminal violence. He said an accused who had recruited his villagers and neighbours into such a network while working in Bengaluru was tracked down and assaulted by villagers after they realised they were cheated. “When people realise they have been duped, frustration turns into aggression. These incidents are leading to brutal attacks and criminal offences,” Kumar cautioned.

Hyderabad commissioner V.C. Sajjanar also expressed concern that several young women were quietly investing in such schemes without informing family members, assuming they would make profits, but instead end up facing losses.

Sajjanar told Deccan Chronicle that in one of the earlier QNET-related cases, the organisation’s legal team filed a contempt case against him in the Supreme Court, which remains under process. He added that while police continue taking action, greater intervention from central agencies and increased public awareness were equally necessary.

Sajjanar further remarked that QNET recruits were allegedly circulating his photographs among new members and brainwashing them that cases filed against the organisation were false; a claim he dismissed with a laugh.