In many countries across the globe there are no specific laws governing the network marketing industry. Many politicians just don’t see the group of people employed in MLM as being big enough, or there is often a lack of expert opinion in the government. However, when the direct sales industry begins to flourish many countries often rush the work and go about it the wrong way. The most recent example being Turkey. The fundamental ideas that were pursued in Turkey can be viewed as being mostly positive. Similar to that being practiced in Italy, the Turkish government wants to enforce that not only should commission be paid in the local currency, but it should also originate from the country. Therefore, from the word go every company that pays commission for example via Moneybookers or other eMoney systems or sends checks from far-off lands would be deemed illegal.

The advantages of this are obvious: You have to register your company in the country and open a company office. This ensures the government has a certain amount of control and profits from the turnover; the reason the country has taxes. This will lead to the creation of new jobs and consultants will ultimately have more security having a contact on site, who is not only familiar with the mentality but can also speak the language. In Italy, for example, networkers partake in the social system and pay into the pension fund. Just like normal employers the company has to contribute a significant percentage of this, which can’t be deducted from commissions. An additional benefit to the distributor.

However, as is often the case, the fundamental idea can sound good, but the realization of it can leave something to be desired. The OBTAINER was informed by close government circles that over the next few weeks and months direct marketing and MLM companies in Turkey will be up against it. A member of the Dogrudan Satis Dernegi (DSA of Turkey) also confirmed this unofficially. Member companies are now expecting house raids or worse to take place any day now. A company has already been affected by this.

Michael Sander, Founder of the OBTAINER, spoke about this with JR Mayer, managing director of the internationally operating direct marketing firm QNet. Reports from Turkish media recently described QNet’s business opportunity as a scam, which led to the arrests of some of the networkers from the company. The OBTAINER dug a little deeper and asked JR Mayer for his opinion on things. Excerpts follow:

Once again, QNet is making headlines in the Turkish media. What has triggered this renewed interest in your business activities in Turkey, as was reported in the news?

In the interview we had in April (s. OWW 4/2010), I explained that we were in the middle of building up our local business activity in Turkey. At this time, we had been the focus of the media’s attention predominantly due to a lack of awareness and misunderstanding in relation to our business model. Since then, we have taken a number of steps to raise awareness for the business model, the products and services as well as the business opportunity QNet has to offer. We set up training programs for our distributors to teach them how to run their business in a professional and ethical manner. In addition, we initiated cooperation with local media in order to tackle the public’s concerns and, with their help, help clarify the assumption that our business model was a ponzi scheme, as it was reported to have been earlier. Despite the current negative media attention, I think it’s fair to say that we have achieved notable success in Turkey.

It has been reported that a couple of your Independent Representatives (IRs) were arrested due to defalcation and fraud. Can you comment on this?

It’s true that a couple of IRs were arrested and that investigations are still ongoing. The lawsuit is still pending therefore it would be inappropriate for me to comment on this at this time. All I can say is that we are following developments very closely and are also willing to cooperate with the relevant authorities should this be required.

In the meantime, we have also received complaints from within our network about certain IRs, who were running their business in an unethical manner and presenting it to others in a misleading way. Our Network Compliance Department is looking into these complaints and the appropriate consequences, such as the dismissal of some IRs, has already occurred.

In the case that the authorities find the IRs in question guilty, how will this influence your cooperation with your IRs? How much responsibility do you bear for the actions of your networkers?

As already mentioned our Network Compliance Department, which reviews and pursues each complaint that is brought to our attention regarding our networkers, will conduct its own internal investigation.

All our networkers are bound by our cooperate policy and business practices as well as our strict code of conduct. We take every breach extremely seriously and the appropriate consequences, including the dismissal of IRs, will follow if considered necessary.

We have had to let 44 IRs go in Turkey to date and have terminated contracts with five more on the basis of our own independent investigations. Every measure taken against the IRs currently in detention will be to a large extent dependant upon the respective results of the investigations by the relevant authorities. We are therefore hopeful of a speedy decision in these cases.

As global market leaders of the direct selling industry, we are committed to the values and integrity of this industry and will continue to act in accordance with these.

At the beginning, you mentioned the localization of your business activity in Turkey. How far on are you with this and does the present situation change your position in any way?

We have contracted a local enterprise, rented office space, opened our business accounts and hired employees for business support. We have adapted our global cooperate policy and business practice to the local conditions and are currently in the process of translating these into Turkish. It will be a while before we have set up a fully functional office for the support of our network, but we will try to accelerate this so that everything can take place in a controlled manner as quickly as possible. As you can probably understand this is a time-consuming process, which has been made even more difficult in light of the current negative media coverage.

The current situation however doesn’t change our position or our business interests in Turkey in any way.  Turkey is still an important market to us and we will endeavor with full dedication to solve these current problems and establish a stabile presence in Turkey.

Over the next few days, we will see if the same faith awaits other companies like QNet in Turkey. It is a time of unease in Turkey. At the end of the day the distributors from companies who stick to the Code of Ethics, which all enterprises voluntarily subject themselves to, will be the winners. QNet appears to have the right approach. If distributors don’t stick to such principals, the appropriate action must be taken.

We will keep you up-to-date with developments in Turkey. OBTAINER WORLDWIDE – Be the first to hear what is really going on!

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