Growing among people in their twenties! Inquiries and complaints about at-home affiliate and drop-shipping marketing: Get rich by introducing friends? Some people are even pushed into debt to make payments

In FY2014, inquiries and complaints at local consumer centers around Japan regarding at-home affiliate and drop-shipping marketing again exceeded 1,000 cases for the first time since FY2010 (see diagram).
A look at recent inquiries and complaints shows a prevalence of MLM-type^* solicitations using the phrase "affiliate" (e.g. "friends and people I met through SNS introduced me to at-home affiliate and drop-shipping marketing and explained I could make money if I solicited acquaintances and grew the number of members"). Another recent characteristic is the large number of university students and other young adults.
At the same time, inquiries and complaints that are familiar from years past also continue to be received in large numbers (e.g. "I entered an expensive contract because they told me I'd make my money back immediately, but I haven't earned anything," "when I entered the contract, the business told me I'd be fine because they would provide support, but they haven't provided that support and so I haven't sold anything," "I was charged supplemental fees that were never discussed when I entered the contract").

1. ^* MLM (multi-level marketing) transactions are regulated under the "Multilevel Marketing Transactions" section of the "Act on Specified Commercial Transactions" (referred to below as the "Specified Commercial Transactions Act").

Diagram: Number of inquiries and complaints by fiscal year

FY2010: The total inquiries/complaint amounted to 1,530, and 119 cases of them relate to MLM.
FY2011: The total inquiries/complaint amounted to 823, and 119 cases of them relate to MLM.
FY2012: The total inquiries/complaint amounted to 871, and 103 cases of them relate to MLM.
FY2013: The total inquiries/complaint amounted to 888, and 116 cases of them relate to MLM.
FY2014: The total inquiries/complaint amounted to 1,175, and 307 cases of them relate to MLM.
The number of inquiries/complaint related to MLM decreased for a while after the peak in FY2010, but has increased again afterwards.

Sample cases of inquiries and complaints

[Case1]

A person above me at my part-time job was promoting affiliate marketing. He explained that I would make money if I could introduce other people.

(Man in his 20s)

[Case2]

A friend was promoting affiliate marketing. I borrowed money to enter a contract and now I have promoted it to friends too.

(Man in his 20s)

[Case3]

I entered a contract for drop-shipping but never received the support they said I would. I haven't made any money.

(Woman in her 20s)

[Case4]

I was told there would be no initial investment but was charged an "equipment investment fee" after signing.

(Man in his 20s)

Problems highlighted by the sampling of inquiries and complaints

1. MLM transactions are promoted by friends, etc., making them hard to decline.
2. Explanations when being solicited prove very different from the actual terms.
3. If a person does not have the money to pay the expensive cost of the contract, they are encouraged to use consumer loans, credit cards, etc.
4. Explanations make it seem as if it will be easy to earn money.

Advice for Consumers

1. The trouble caused by MLM transactions is not only financially damaging but can also ruin personal relationships. If you are not interested in entering such a contract, simply decline the offer.
2. Avoid entering unrealistic contracts based on income expectations described during the sales pitch.
3. There is no easy way to make money.
4. In case of trouble, consult your local consumer center.