Multi Level Marketing is Unlawful
Fatwa Al Lajnah Ad Daimah no. 22935 dated 14/3/1425 H explains about MLM which is prohibited from collecting the following problems:
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1. There are forms of usury and usury of rice-ah. Members are ordered to pay a small amount of money and then expect greater reciprocity, this means exchanging some money for excess money. This is clearly a form of usury which is forbidden based on nash and ijma. Because actually what happens is the exchange of money. And not the real intention is to become a member (like in a company) so that it has no effect in the law.
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2. In it there is a form of ghoror (high speculation or chancy) which is forbidden by Shari'ah. Because the member doesn't know whether he can attract other members or not. Tiered marketing or a pyramid system if it takes place, one day it will reach the end point. The new member does not know whether when he is part of the system, he is at the highest level so he can get a big profit or he is at the lowest level so he can lose big. The reality is, most MLM system members suffer losses, except for the few who are at the top level so they are lucky. So generally, this system brings losses and this is the essence of ghoror.
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Ghoror is a possibility of big losses or big profits. Even though the Prophet sallallaahu ‘alaihi wa sallam had banned the sale and purchase of the ghoror as mentioned by Muslims in his saheeh book.
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3. In MLM there is a form of eating other people's property in a vanity way. Because the real profit is the company (company) and members have been determined to trick others.
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4. In this muamalah there is deception and deception against humans. Because people think that by becoming a member they will get a big profit later. Whereas in fact it was not achieved. This is a form of fraud which is forbidden in Shari'ah.
Fatwa Al Lajnah Ad Daimah no. 22935 dated 14/3/1425 H explains about MLM which is prohibited from collecting the following problems:
.
1. There are forms of usury and usury of rice-ah. Members are ordered to pay a small amount of money and then expect greater reciprocity, this means exchanging some money for excess money. This is clearly a form of usury which is forbidden based on nash and ijma. Because actually what happens is the exchange of money. And not the real intention is to become a member (like in a company) so that it has no effect in the law.
.
2. In it there is a form of ghoror (high speculation or chancy) which is forbidden by Shari'ah. Because the member doesn't know whether he can attract other members or not. Tiered marketing or a pyramid system if it takes place, one day it will reach the end point. The new member does not know whether when he is part of the system, he is at the highest level so he can get a big profit or he is at the lowest level so he can lose big. The reality is, most MLM system members suffer losses, except for the few who are at the top level so they are lucky. So generally, this system brings losses and this is the essence of ghoror.
.
Ghoror is a possibility of big losses or big profits. Even though the Prophet sallallaahu ‘alaihi wa sallam had banned the sale and purchase of the ghoror as mentioned by Muslims in his saheeh book.
.
3. In MLM there is a form of eating other people's property in a vanity way. Because the real profit is the company (company) and members have been determined to trick others.
.
4. In this muamalah there is deception and deception against humans. Because people think that by becoming a member they will get a big profit later. Whereas in fact it was not achieved. This is a form of fraud which is forbidden in Shari'ah.
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