Answering QNET Scam Questions: Deciphering The Truth About This MLM Company
If you’ve been seeing QNET called a scam online, your first instinct might be to dismiss the company entirely. You’ve seen this scam before, right? The kind where no one gets rich except for (sometimes) the people at the top. You might even know of specific worldwide incidents that cast the company in a bad light. As easy as this connection is to make though, there’s more to the story here.
What Is QNET?
QNET is an e-commerce company that has customers and distributors around the world. Most of the company’s distributors, known as Independent Representatives (IRs) are present in emerging markets, particularly in the Middle East, Africa, and Asia. It’s essentially bringing direct selling opportunities to countries that have little exposure to this specialized type of sales model. QNET is perfect for start-up entrepreneurs that are looking for a way to begin their business journey, by providing them with the resources they need.
QNET: That Latest Ponzi Scheme?
A Ponzi scheme essentially takes from new investors and gives to the earlier ones. If you’ve heard this used in conjunction with QNET in the past, the message is that you’ve missed out on any potential benefits long before you ever heard about the company.
But is this a fair assessment of the Hong Kong-based e-commerce company? Absolutely not, because QNET doesn’t function through an investor model, but rather a direct selling model. Money is earned by actually selling the products that QNET provides. There is no risk to the seller as they do not have to purchase inventory. They just have to refer the prospective customer to purchase from the QNET portal using their referral ID so that the sale can be attributed to them. And QNET provides a virtual office access to distributors to help them monitor their sales performance as well as their team’s sales performance.
Ponzi schemes are nothing like MLM or direct selling companies. There is no connection between this type of scam and the way that QNET conducts business.
But is QNET a Pyramid Scheme?
Similar to the Ponzi Scheme, pyramid schemes rely on new users to survive. The way that a Pyramid Scheme functions is by constantly signing up new users which then have to invest in the service, and the only way for them to make money is to find even more new users to sign up for the service. Pyramid schemes are not based on sales, or the products that they might claim to distribute. All of the money comes from constantly signing up new users.
That’s why QNET is not a scam like a Pyramid scheme. QNET is a direct selling company where sellers are provided with real products and services, and the money they make comes from commission on those products and services.
The QNET Business Model
QNET is focused on a modern approach that combines two popular major industries: Direct Selling and e-Commerce. Customers have the option to either take up the opportunity to become an independent representative, or they can purchase products from QNET directly solely for themselves.
Those who choose to become independent representatives have the opportunity to sell QNET products and services for themselves through direct referrals, or through their teams. IRs are able to profit through QNET’s compensation program which offers commissions based on the sale for products and services.
QNET also provides intensive training programs for IRs, to ensure they have all of the skills they need to maximize the opportunities brought to them. These programs also ensure that IRs adhere to QNET’s strict ethical practices and core values.
Past and Present:
The Founders of QNET know what it means to be involved with the wrong people. Their past experiences had taught them a lot about integrity in the business world, which is why they worked so hard to do things differently. Avoiding those issues in the future is also part of the reason QNET mandates training to ensure all representatives follow their ethical standards.
In the 1990s, the founders were involved with a direct selling company as distributors and had built a 2000 strong network of distributors for them. However, they soon discovered the company they were involved with was not being honest with them and was withholding their commissions without explanation. Soon, the company disappeared leaving these leaders with liabilities incurred from non payment to their sales team. That’s when they decided to start a company of their own that was founded on the bedrock of integrity and ethics.
The company was initially called GoldQuest as their product was limited edition numismatics and collectible gold coins. But in just a few years, they expanded their product portfolio and upgraded their e-commerce platform and they changed the name to QuestNet.
Finally, in 2010, the name was shortened to QNET a company that is now known to many as having created a space where direct selling and e-commerce meet, giving distributors an easy way to order products based on local demand in their area.
Early Success Sparks Criticism
In the same year that the company was founded, QNET (known as GoldQuest at the time) was also recognized as an official distributor for the 2000 Sydney Olympics Commemorative Coin Set and later for FIFA’s Centennial Commemorative coin set.
In 2002, QNET was selling travel packages thanks to their partnership with QVI Club. In 2006, they expanded into wellness products. Today, they sell everything from watches and fashion accessories to education to home care products. They have offices in more than 30 countries and customers that span nearly 100 countries.
But because QNET was trying something relatively new, it led to some people questioning the validity of the business model. Not every country had seen this before and the authorities were unfamiliar with the process. Even with all the concerns though, there have never been any legal declarations against the company. In other words, no one has been able to prove that QNET had violated any moral or formal regulations. While the word ‘Ponzi’ may have been used before, a real Ponzi scheme would have been immediately squashed by officials to protect its citizens.
This is not to say that there aren’t various cases where the company name is involved though, and we’ll explore this below. The bottom line though is that many of these cases are registered against individual distributors and not QNET as a company. If a distributor acts outside their contract with the company, this is largely the fault of the independent representative who acted for their benefit.
Rogue distributors in no way align with the values of QNET, and the company takes this behavior very seriously.
The Real Story
Digging deeper into the allegations of QNET can help you understand where the original accusations came from and how they were misperceived or misinterpreted.
Acquitted in Indonesia
In 2007, the company was holding a convention in the Philippines when the Founder of QNET and his partners were detained by Interpol based on a civil dispute. Despite being held for 3 months, they were all acquitted by the Indonesian courts. It wasn’t long after before the Department of Justice in the Philippines did the same.
Review in Rwanda
In 2009, QNET had been banned by Rwanda for violation of its tax laws. This ban was lifted though in 2012 after an investigation. QNET had made a legitimate mistake in this case, but only because it hadn’t registered its corporate address properly with the government — not because it had subverted the tax laws.
The Minister of Finance and Economic Planning, John Rwangombw, declared that the company was free to resume operations after QNET obtained a physical address and stored its items in a warehouse in the country. In 2013, QNET set up a physical office in the country, its first in the continent, and that office still serves as the central hub of operations in East Africa.
Political Conflicts in Egypt
In 2013, QNET representative and Egyptian human rights activist Salma Sabahi was arrested based on accusations associated with QNET. After enjoying economic success in her country, this popular TV personality appeared to spark strong feelings for her involvement with the company. It’s unclear exactly why the charges were filed, but it may have had something to do with both her rise to the top and the fact that her father was running for president. It wasn’t long before she was found innocent of all charges (after her father was no longer running for president).
An Adjustment in Tajikistan
In 2014, QNET had charges filed against them, which were presented in a shariah court in Tajikistan. The allegation was because independent representatives were allowed to buy both a sales kit and a representative product at the same time. This violated a law about combining two transactions into a single transaction. This was a simple enough fix for QNET, one that allowed them to continue operating there.
False Claims in Moldova
One of the most disturbing parts of any MLM is the idea that people are sold outright lies in the beginning. The vulture MLMs take a desperate, poverty-stricken person and convince them to spend the only money they have on goods that won’t net a profit.
This was the allegation in Moldova, where there were reports that QNET asked people to buy $2,000 worth of goods in this developing country to earn thousands more every week. Yet QNET didn’t make these promises. If you check the source material (originally published in Romania), you’ll find that this was a false accusation.
Ongoing Troubles in India
India has been a country where QNET has seen multiple hiccups.
In 2013, a self-proclaimed activist in India said that his wife had been cheated by QNET. It took three years of investigation before the Supreme Court of the country ruled in QNET’s favor. While the man’s wife had placed an order, she had canceled the payment before it was processed.
In 2017, a QNET franchisee in the country came under speculation after it was accused of being a money circulation scheme. Shareholders Michael Ferreira and Malckolm Desai were jailed for these claims, but once again, the Supreme Court ruled that the company did not fall under a violation of their rules.
In India in 2019, reports came in that an IT professional had committed suicide after losing money on their QNET purchases. But the man’s own documents proved that he had earned consistent commission on his sales as a distributor.
In 2019 and 2020, there were ongoing allegations of QNET being a Ponzi scheme, accompanied by ongoing arrests in certain areas. In response, the QNET Distributors Welfare Association went to the High Court in Telangana with a petition claiming that authorities were unfairly registering criminal cases against independent representatives. The court ordered state authorities to refrain from these practices. However, police commissioners did not comply with this request, which would lead to the Supreme Court issuing a notice to law authorities due to their violation of orders. Authorities continue to ignore these orders still, leading to more notices and unfair arrests. QNET continues to push back in the state to ensure justice for its distributors.
Framed in Liberia
The headline “Alleged Trafficked Victims from Sierra Leona, Guinea, Senegal & Ivory Coast Stranded in Liberia” was published in 2020 in a Liberian news magazine. In the article, there are reports that QNET may have brought trafficked victims into Liberia under the guise of high-paying jobs. QNET vehemently opposes these claims and condemns all forms of human trafficking though.
As mentioned, people have a tendency to tangle QNET up with its independent distributors. And while there is an association that QNET takes seriously, it’s impossible to regulate all behavior. Much like an employee might turn against their company at any time and for any reason, the company cannot predict or prevent all potential wrongdoing.
In this case, QNET is working with authorities in Liberia to bring people to justice and reaffirm QNET’s position as a Direct Selling company with decades of history behind them. QNET in no way made these promises and flat-out denies being involved in any kind of human trafficking.
In many ways, QNET’s very fast growth and progression has been at the heart of all the accusations about the company. When the courts actually look into the matter, they find that the truth looks very different from the original claim. When a Forbes Asia reporter, Donald Frazier, looked into more than 150 comments about their experiences with QNET, he found no proof of wrongdoing.
The ‘sources’ are largely rumors and falsehoods that have been perpetuated by word of mouth. Reputation can be a difficult thing to control even under the best of circumstances, and some companies get more traction than others — especially if they’re trying to do something different in a new space. Just because someone goes to Wikipedia and declares what they found there to be gospel truth in no way makes it a credible fact about the company.
Misuse of the Name
In the vast majority of cases, you’ll find that the allegations made are related to individuals who have used the QNET name inappropriately. Whether it’s in service of their business or a particular product, there’s a striking similarity across the stories. The staff of QNET is taking steps to correct the problem to protect their name and promote trust within all communities.
QNET may have more than 20 years of experience in the business, but considering much of the world had little to no experience in direct selling, it’s no wonder that there has been a misunderstanding, especially considering the fact that QNET operates in so many emerging economies.
The success of any legitimate MLM is not based solely on dollar figures. Customers flock to these services because they find quality products that they can’t find on a local store shelf. They know about these products because a person in their community tells them about them.
Rather than pushing products or services on customers that neither want nor need them, a good distributor will curate their offerings based on who is buying. This is the crux of success for QNET, especially when you consider who is on either side of the transaction.
The Reality of QNET
QNET may be a for-profit company, but they don’t keep all of the money collected. The company works as a support system to provide products and connect people who would benefit from them. They rely on their independent distributors for this, who are paid for their efforts. This is why they’ve become an extremely useful tool for prospective entrepreneurs in global economies that may not have many other opportunities locally.
Not everyone is born to be a salesperson, but some people do have a knack for it. A nascent entrepreneur in a high-unemployment area is rarely (if ever) given a chance to stretch their wings though. Anything from location to family obligations may hold them back from even applying at different companies.
QNET is different in that distributors can get their start with very little resources of their own. It’s a chance for them to build something from scratch, one that many representatives have taken and run with for years now. As they begin their venture and monitor its progress, they learn more about the dynamics of businesses, the relationships that make it all possible, and the products that power it all.
This company teaches people about the principles of selling, a lifelong skill that can apply to so many aspects of life. For example, when you apply for any job, you have to know how to sell yourself. So even if a person doesn’t make QNET their primary income or discards it after trying to make a go of it, they can still find invaluable lessons to carry with them forever.