This article spoke about: Learn about the legal concept of hierarchical marketing companies.
Hierarchical Marketing Firms by Law
Hierarchical marketing companies are companies whose job is to persuade the person to buy a commodity or product to persuade others to buy, to persuade these others also to buy, and so on, and as the layers of subscribers increase, the first get more commissions, and each subscriber is persuaded after him to participate against the large commissions that can happen If it succeeds in including new subscribers, it will color it in the member's list.
Contents
1 hierarchical marketing and network marketing
2 hierarchical sale in law
3 Sharia ruling in the Islamic economic system
4 references
Hierarchical and Network Marketing
A distinction must be made between hierarchical marketing in which the new collaborator demands an initial investment and promises commissions in exchange for persuading new investors and network marketing that major companies may use to encourage.
Bring in other customers for a fee, but without the customer having to pay or invest his own money. In practice, however, hierarchical marketing companies do not use this term to describe their business and use network marketing as a cover and name for their business.
Hierarchical Sale in Law
Legally, hierarchical selling is forbidden by the text of the law in many countries. Still, new emerging companies always try to hide the way they operate, and the victim remains the only one who can reveal that.
But in the face of the lack of knowledge of the customers of these companies about the illegality of the companies' work, they are often still in the whirlpool of pyramid selling and instead seek to bring in new victims so that they can recover their original investment, which makes it difficult to discover these companies and pursue them judicially.
Sharia Rule in the Islamic Economic System
According to the Islamic religion's legal point of view, hierarchical selling is prohibited by Islamic law, according to a fatwa of the Islamic Fiqh Academy.
This type of transaction is prohibited because the intended transaction is the commissions and not the product, as the commissions amount to tens of thousands.
In contrast, the product's price does not exceed a few hundred, and each sane person, if he was offered the two things, will choose the commissions.
For this, the approval of these companies in the marketing and advertising of their products was Highlighting the size of the large commissions that the subscriber can obtain, and enticing him with outrageous profit in exchange for a small amount is the price of the product, the product that these companies market is just a cover and an excuse for obtaining the commissions and profits.
Since this is the truth of this transaction, it is forbidden by Shariah for matters:
Firstly:
It included usury in its two types, usury and credit for usury. The subscriber pays a small amount of money to obtain a large amount of it. It is money with differentials and delays, and this is usury forbidden by text and consensus. The company's product is only a cover for the exchange; it is not intended for the participant, it does not affect the judgment.
Secondly:
It is a religiously prohibited uncertainty because the subscriber does not know whether or not he succeeds in obtaining the required number of subscribers?
And network marketing or hierarchy, whatever it continues, must reach the end of which stops. When joining the pyramid, the participant does not know if he will be in the upper classes of him and be a winner, or in the lower classes, he will be a loser?
Most of the members of the pyramid are losers, except for the few in the above, so the winner is then the loss, and this is the reality of deceit, which is the hesitation between two things, most of which they fear, and the Prophet, may God's prayers and peace be upon him, forbade deception, as Muslim narrated in his Sahih.
Third:
What this transaction included in the companies' eating people's money unlawfully, as only the company and those who wish to give it to subscribers with the intent to deceive others benefit, and this is what the text prohibited in the Almighty saying: (O you who believe, do not eat your money between you in vain) / 29
Fourthly:
What is in this transaction of fraud, deceit, and dishonesty on the people, on the one hand, to show the product as if it was intended from the treatment and the case otherwise, and on the one hand to entice them with large commissions that are often not realized, and this is from fraud that is forbidden in Sharia. Peace and blessings are upon him said: (Whoever cheats, it is not It was narrated by Muslim in his Sahih, and he also said: (The two sales are by option unless they are separated.
As for saying that this dealing is from brokerage, this is not true since brokerage is a contract whereby the broker gets a fee for selling the commodity, while network marketing is the subscriber who pays the wage to market the product, just as a brokerage is intended to market the commodity in reality, unlike network marketing, the real point From it is the marketing of commissions and not the product, and for this the subscriber markets to those who market, thus unlike the brokerage in which the broker marketed to those who want the commodity, the difference between the two is apparent.
About saying that the commissions are from the endowment, it is not correct. If it was handed over, not every gift is permissible according to Sharia. Hence, the gift on loan is usury, and that is why Abdullah bin Salam said to Abi Bardah, may God be pleased with them: (You are in a land, the usury is in it, and if you have a rightful man, So he gave you pregnancy hay, barley, or pregnancy, then it is usury.) Bukhari narrated it in the Sahih.
The gift takes the ruling on the reason for which I found it. Therefore he said, peace and blessings be upon him - in the factor that came saying: This is for you and this was given to me, so he said, peace and blessings be upon him: (Do you not sit in the house of your father and your mother, and look, is the guiding you or not?) Agreed upon.
These commissions were found to participate in network marketing, so whatever names are given, whether a gift, a gift, or otherwise, this does not change its reality and ruling anything.
It is worth noting that companies have appeared in the market that dealt in the network or hierarchical marketing paths, such as (Smart Way), Gold Quest, and Seven Diamond. Its ruling is not different from the companies mentioned above. However, it differs from each other in what it offers of products.
God bless and grant peace to our Prophet Muhammad, his family, and companions.
The Permanent Committee for Academic Research and Issuing Fatwas, Fatwa No. 22935, dated 3/14/1425 AH.
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