I have recently received what is basically the same question from different readers, all of whom are asking whether a certain type of business is permissible in Islam. This is promoted in different ways by a company called Goldquest, which appears to give its name in some other forms as well. It aims to sell a product for a high price, and wants the customer to sell similar products to others, giving him a commission when he gets a particular number of customers. Eventually he gets his money back, but after having recruited many more customers to the company, each of whom is now looking for more customers. There are a variety of methods the company tries to promote in this way, always seeking more customers. It also resorts to the meaningless formula that the customers should be to the left and the right of the person recruiting them.
All such business is definitely forbidden in Islam because: 1) It sells a product at an exorbitant price. A customer would not have paid such a price for it unless he hopes to regain it by recruiting more customers; 2) The recruitment of customers is highly deceptive; 3) The customer becomes an agent involved in this deception; 4) Many of the customers will fail to recruit enough new customers to regain their money outlay, which means that they lose their money and get a product which they do not need.
It should be noted that the company may produce a ruling, or a fatwa, saying that its business is acceptable in Islam. I have not seen the ruling, but we should always remember that a scholar gives his ruling according to the question put to him. It may be that the question which was put to the scholar concerned was deliberately ambiguous, or it might have withheld certain material facts, or it may be that the company produces only a part of the ruling that suggests that its business is acceptable. Before judging whether this ruling is correct and relevant to the business in question, we need to look at the question put to the scholar and the ruling given in full.