Multilevel marketing firms need regulating: Official

Multilevel marketing firms need regulating: Official

JAKARTA (JP): Director General of Domestic Trade Teddy Setiadi
acknowledged on Friday the need to issue a special regulation to
control rapid development of multi-level marketing businesses in
the country.

"As yet we have no specific, official regulation on multi-
level marketing. It's a pity, because we badly need such a
regulation to manage mushrooming multi-level marketing businesses
here," he said.

Teddy told Antara news agency that Indonesia was "several
steps behind" other members of the Association of Southeast Asian
Nations (ASEAN), which had implemented such regulations to
control growing multi-level trading.

Neighboring countries, including Malaysia, established a
specific regulation on multi-level marketing -- the direct sales
act -- several years ago, he said.

Teddy was addressing media questions on cases involving
companies working under multi-level marketing systems and alleged
instances of customer exploitation.

He acknowledged that under the existing regulations, companies
adopting the multi-level marketing system were not required to
have special licenses to operate. "They only need to obtain a
License for the Operation of Trading Businesses (SIUP), just as
other companies working in retail businesses do.

"It is therefore difficult under the existing law to impose
any penalties on errant multi-level companies, because they have
obtained the SIUP to back up their operation. We can only impose
a penalty if they have no license to operate."

Based on his office's study, most multi-level marketing
companies in the country only sold "dreams" to their customers
with the promise of big bonuses.

"It is illogical that with only some deposits made to the
companies they could obtain a huge income, or goods, in such a
short time. It's merely selling dreams," he said.(gis)