Beware of SCAMs
Enough talk of the economic and financial crisis on my last few posts. So now let it pass by for some time and get little bit personal. Yes, sometimes I do write some posts which might be personal but might be useful to my readers if I share my experiences with them.
Today, I’ll focus on some fraudulent companies posing as up and coming financial or insurance companies. Some companies also pose as investment funds looking to raise funds for investment in certain industrial or realty projects.
Their modus operandi is quite impressive. Most of the time they target the country side – in rural and semi urban areas where a huge section of people have good income. These people have very little option to leverage their savings as they have little choices. Only traditional fixed deposits or recurring deposits at banks and post offices are available. So when good speaking marketers enter their domains with promises of huge returns within a short period of time for seemingly small investments – the unsuspecting villager falls prey. The company representatives carry with them some glitzy leaflets, brochure of their companies and give lectures on how they will grow as big as Peerless in the next few years.
Just last week, someone from a certain company approached me to invest in preferential shares of a new company working for government projects in West Bengal little knowing that I run a business blog and am well versant with the industry though I might live in a non-descript corner of India. When he started his usual sweet lecture about who the big shots are already in their board of directors, I politely asked him to show all the government approval papers and if they have the required documents from concerned authorities. He told that – he is not authorized to carry original documents! But all the information may be found on their website! Now here is a catch they usually use to allay suspicion of prospective clients. As internet penetration and literacy is too low in India, people from semi urban areas have a mystic impression about the internet and websites because they don’t know about it whatever their educational qualification might be. Most of the time they get convinced and the fraud run away with their hard earned money.
These financial agencies also offer extra benefits such as commission to get newer investors and it works on chain system. Someone with pure commonsense might understand that these are nothing but big SCAMs and Ponzi schemes. Otherwise they can never pay up the promised returns.
The most depressing thing about this whole phenomenon is that, cheated individuals have no where to go for complaints as most of these deals are done at homes and legal actions can hardly be taken due to lack of proper evidences. The so called company executives roam around from place to place and have no permanent or temporary office nearby as they claim that their company is still new and has only the registered office. The obviously promise to set up their office here in the future once their client base has grown substantially so that they can process client claims locally. But as I mentioned before –most of these are frauds, scams.
So be very careful with such shady companies. My advice would be – don’t fall for them at all. Just excuse yourself when such people approach you with offers. If you have intentions to save, save it in time proven schemes such as bank deposits, LICI policies, post office deposits. After all, there was a newspaper report recently that top leaders from across parties are all followers of traditional saving schemes like KVP, Government bonds or just normal recurring deposits.