What is the ruling on the work of pyramid or multi-level marketing companies, such as (Biznas) and (Hibat Al Jazeera), which rely on convincing a participant to buy a product and then convincing others to buy in order to obtain increasing commissions as the layers of participants grow?
This type of transaction is forbidden because its intent is commissions, not the product, and it involves:
1. Riba (usury) of both types (fadl and nasi'ah), as the customer pays little to get much.
2. (excessive uncertainty) which is forbidden by , as the participant does not know if they will win or lose, and loss is more likely.
3. Unlawfully devouring people's wealth, as the company and initial beneficiaries deceive others.
4. Deception and fraud by presenting the product as the primary intent and enticing people with large commissions that often do not materialize.
This transaction is not brokerage because the participant is the one who pays the fee, and the true intent is marketing commissions. Furthermore, these commissions are not a valid gift, as a gift takes the ruling of the reason for which it was given, and these commissions were given for participating in forbidden multi-level marketing.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- Original fatwa ID
- 20352
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- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy