Friday, June 2, 2023

QNET Responds to Allegations in Kerala

The QNET scam allegations are baseless. In light of a slew of reports in the media and public forums in Kerala about the activities of QNET in India, we take the opportunity to respond to the scam allegations through this conversation with Tim Harney, the Senior Legal Counsel for QNET. QNET wishes to clarify that it is not a money chain or investment scheme – The company’s products are of the highest quality and made from premium materials and are a result of years of R&D – QNET operates in India in adherence to the direct selling guidelines of the Ministry of Consumer Affairs through its sub-franchisee Vihaan Direct Selling – QNET is a 100% e-commerce based direct selling business that has helped thousands of people in India improve their health, wellness, and lifestyle through its products and business.

False Claim: QNET is promoting a money chain system in the name of direct selling running in India. Your response to this please.

Facts: QNET is a 23-year-old direct selling company which markets an exclusive range of high-quality products in the areas of Health, Wellness, and Lifestyle through its Distributors. Our products are marketed to customers in more than 100 countries.  In India, QNET’s sub-franchisee Vihaan Direct Selling (India) Pvt Ltd operates in full compliance with the Direct Selling Guidelines issued by the Ministry of Consumer Affairs, Government of India (Gazetted in October 2016). Notably, the Hon’ble High Court of Karnataka in February 2017 said and I quote –

“Material of unimpeachable character pertaining to the activities of QNET have been produced before the Court. A perusal of the material and the charge sheet averments prima facie indicate that the activities of QNET and Vihaan i.e., the multilevel marketing companies, do not constitute offences under the Prize Chits and Money Circulation Scheme (Banning) Act, 1978. The activities of the company do not fall within the definition of ‘Money Circulation Scheme’ under Section 2(c) of the Act, nor does it fall within the definition of ‘Prize Chit’ under Section 2(e) of the Act.”

Given these facts, it is clear that the QNET business is recognised as a legitimate direct selling business in India.

False Claim: There are concerns raised about the products value. The reports say that the quality of QNET products is questionable and the products are overpriced.

Facts:  QNET sells unique high-quality products that are developed exclusively for the company after extensive research and development. These products are made with premium materials and adhere to the highest quality standards.

We are also proud to state that around 80% of our products are made in India in line with the government’s Make in India initiative. Many of our products in India are sourced from small and medium enterprises, to support the growth of the SME sector. Several prominent consumer goods brands that are well known all over India have also partnered with QNET to develop exclusive products for our customers. These include Sharp, Kent, and most recently Cuckoo.

We stand by the quality and premium nature of our products which command a premium price.

False Claim: The media reports are saying that QNET Distributors are using wrong promotional methods and they make false promises. What’s your take on this?

Facts: QNET’s direct selling business opportunity comes with a clear set of policies and procedures that all distributors must adhere to. We do not tolerate any form of misrepresentation of the company or its business model. To monitor and govern the selling practices of the distributors, Vihaan Direct Selling has established a grievance cell that addresses all complaints of unethical behaviour and takes necessary action against those who are found guilty. All the policies of the company are in line with the model direct selling guidelines from the Ministry of Consumer Affairs.

False Claim: There is an allegation that QNET Distributors registered in Dubai, are doing business from Kerala and that the company is allegedly supporting it. Please clarify.

Facts: Many distributors who live in India travel between India and Dubai regularly which may give the impression that they are doing business in Dubai. The distributors who are based in India must adhere to the local laws and conduct their business in line with the direct selling guidelines.

Vihaan Direct Selling has a consumer grievance cell that represents the interests of the public in addressing consumer complaints of any alleged malpractices or violation of consumer rights. If anyone would like to report such violations, they may contact us and will investigate these complaints.

Our business activities are conducted entirely in compliance with the governing regulations of the country.

False Claim:  Yet another allegation is that Distributors are doing scam under the guise of RYTHM.  Your reaction please?

Facts: This is a baseless claim. QNET and its distributors act in good conscience in any charitable undertaking. QNET is involved in a number of community development projects around the world, including in India, through its global CSR arm. We inculcate in our distributors the importance of giving back to the community and we are very proud of the many projects that have been initiated by our distributors to help the needy especially during the pandemic.

False Claim: Is QNET legally doing business in Kerala?

Facts: As per existing Direct Selling Guidelines issued by the Kerala State Government in 2018, Vihaan Direct Selling (India) Pvt. Ltd. which is the sub-franchisee of QNET in India, is in full compliance to the laws of the Kerala state.

QNET Ad in the New Indian Express Newspaper
Source: New Indian Express (October 5, 2021)

A few highlights:

  1. Every Distributor who registers with the company completes the carefully laid out KYC process.
  2. On authentication and KYC compliance, the Company issues ID cards to each distributor, registered with it.
  3. The company has obtained all statutory documents and Local registrations as laid out in the guidelines, including Form 1 -E to do the business of Direct Selling in Kerala in addition to necessary tax registration and products related FSSAI certification.
  4. Every product sold through our portal, complies with all statutory requirements as required by law.
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