Australian and Belgian regulators show the way to fair consumer lending practices

In what could usher a new era of regulation, Australian and Belgium regulators are now taking consumer protection to the next level. Will Indian regulators listen to Indian consumers?

Australian and Belgian regulators have been making plenty of headway in the realm of consumer protection and are showing the world that consumers’ voices matter and their interest must be looked after. The Consumer International, of which Moneylife Foundation has been admitted as a supporter category, has cautiously welcomed the moves made by Australian regulators. Similarly Belgian regulators have issued strict guidelines for consumer protection from predatory and unscrupulous malpractices.

Most of the time, banks engage in predatory lending practices and shove needless loans to borrowers which may be difficult to repay (not just in Australia, but all over the world as well, including India). However, according to a Consumer International report issued in November 2013, the credit regulation in Australia has been stringent since 2009. One of the conditions for banks to process a loan is to first find out if the loan is suitable at all and whether borrowers are able to repay. “A loan is considered to be not unsuitable if it meets the consumer’s requirements and objectives, and the consumer has the capacity to repay the loan without experiencing substantial hardship,” noted the Consumer International report. Consumer groups have largely welcomed the reforms which oblige lenders to demonstrate that the credit is not unsuitable for the borrower.

To enable borrowers assess whether they need a loan, lenders are supposed to handhold borrowers and aid them in their process without shoving the debts down their throats, so to speak. The report mentions the following points that Australian regulators have mandated in their guidelines:

  • Make reasonable enquiries about the consumer’s (or borrower’s) financial circumstances;
  • Take reasonable steps to verify the consumer’s (or borrower’s) financial situation; and
  • Make an assessment that the credit is ‘not unsuitable’ for the consumer (or borrower), based on the previous two steps

The Consumer International report also notes that Australian Securities and Investments Commission (ASIC), the apex securities regulator (and equivalent to our very own SEBI), has already clamped down on wrong-doers and violators, including company directors. The report said, “ASIC has recently launched its own action on a breach of responsible lending obligations. This action involves consumers who ASIC alleges were given loans that were unaffordable and not suited to their requirements. ASIC has also recently banned company directors and cancelled the credit licence of an appliance rental company that was failing to comply with responsible lending obligations.”

While ASIC is cleaning up the system, SEBI is merely coming with half-baked ideas to clamp down on mis-selling. It even lets go company officials and directors by providing them with the consent order facility, where violators pay a large amount of fine and get away without admission of guilt. Further, SEBI enforced the Advisors Regulations which backfired. And now it is trying to clamp down on research analysts. But it is still ignoring the voice of consumers. For instance, its SCORES complaints mechanism is essentially broken, as we have pointed out. The Consumer International report cites the importance of an effective complaint mechanism. It said, “Regulators should monitor data about complaints and levels of consumer debt at the national level and, where applicable, state/regional level and use this information to develop regulation. The generic complaint data, including reports on individual companies, should be made available to the public.” Here are some points it has highlighted with regard to complaints.

  • Lenders should have effective internal procedures for handling consumer complaints in an appropriate and timely manner.
  • Consumers should have access to independent advice if they are concerned that they may have not been treated fairly by a lender.
  • Companies should make information readily available about their complaints procedure and independent sources of dispute resolution.
  • In the event that consumers are not satisfied with a lender’s response, they should have access to expedient, inexpensive and efficient third-party mechanisms for dispute resolution.”

Even Belgian regulators are serious about consumer protection. Their regulators have banned certain forms of advertising. For instance, advertisements should NOT highlight the ease or speed with which one can obtain the loan. Similarly, advertisement should not encourage a borrower in financial difficulty to borrow. Yet, both of these are freely telecast in India, especially with the ease of obtaining a loan. For instance, gold loan were a craze recently because ads highlighted the ease at which one could walk in and pawn their gold for loans. Even credit card loans and home loan hard-selling has become the norm. In fact, Belgian regulators have mandated advertisers carry the exact warning: “Attention, borrowing money also costs money.” It also prohibits ads from giving an impression that the interest rates advertised will be used when borrowers buy them.

The Consumer International report also noted the importance of consumer organisations and the need for highlighting such practices to the masses and make consumers aware of them. The report said, “Effective, well-funded consumer organisations have a fundamentally important role to play in supporting the development and adoption of effective consumer protection legislation; highlighting abusive practices and protecting the consumer from being the victim of predatory practices. This is a vital service for individual consumers, the economy and society as a whole.” This is exactly what Moneylife Foundation, one of its kind in India and the voice of Indian savers, has been doing since 2006. Through various seminars and events, as well as through the Moneylife website, it has been highlighting the various malpractices of not just banks but also financial intermediaries like brokers, insurance sales people (it also provides free insurance helpline), portfolio management services. It has also been pointing out a number of dangerous (and mushrooming) Ponzi and MLM schemes which have taken advantage of poorly framed regulations, resulting in lakhs of duped investors. Moneylife Foundation has even written several memorandums, and have highlighted various issues, like this, of which have resulted in actions from regulators and policy makers (such as this, this, this, this and this to name a few).

These regulations were passed recently (Australia in 2009 and Belgium in 2010) in the aftermath of the 2007-08 sub-prime crisis. In a few years, it remains to be seen how effective their oversight will be and the quality of enforcement. At least, these regulators have acknowledged the importance of consumer protection in a world where harmful products are launched every other day, backed by false advertising.


Aadhaar: Pakistan handed over, India giving database on a platter– Part 17

Wikileaks revealed that Pakistan handed over citizens' database to US agencies. In case of India, there will be no need for a database handing over ceremony because it is being given to global security agencies through their proxies who in turn are subservient to legislative will of legislatures in the US, France and UK unlike India

In view of the instructions from the Ministry of Home Affairs (MHA) which is in the process of compiling National Database of Armed License (NDAL) in collaboration with the National Informatics Centre (NIC), an advertisement was published in Prabhat Khabar, on 7 December 2013. It informs that for the preparation of a “NIC database” of arms license holders a Unique Number is to be allotted to them prior to 1 October 2015.

It is relevant to recall the origin of the NIC. During the internal emergency imposed on the citizens by Indira Gandhi, she had setup NIC to weave the entire country into one single communication entity. The erstwhile Electronics Commission and the Department of Electronics (now Department of Electronics and Information Technology-DEITY) had submitted a proposal to United Nations Development Programme (UNDP) for assistance to set up a National Computer Centre in Delhi for building up national databases and “for macro-economic adjustment programme of the Government” and the World Bank Group. The UNDP agreed to fund the National Informatics Centre (NIC). NIC was set up with a mandate to “act as a focal point for maintaining inventories of primary data and computer based systems for data collection and dissemination.” The long-term objective of NIC was approved by Indira Gandhi-led Planning Commission, Ministry of Finance and the erstwhile Electronics Commission. An Advisory Council set up for the NIC in 1976-1977.  

An Indian development support organization founded in 1960, Indo-Global Social Service Society (IGSSS) disassociated itself from undertaking enrolment for UID number project which was being undertaken under Mission Convergence in Delhi. Withdrawal of IGSSS that works in 21 states of the country across four core areas India: Sustainable Livelihood, Youth Development, Disaster Risk Reduction, and Urban Poverty merit the attention of all the states and civil society organisations especially those who are unwittingly endorsing the UID number related processes.

In its withdrawal letter IGSSS said, “We will not be able to continue to do UID enrolment, as we discussed in the meeting of 10 May 2011.” It added, it is taking step because “it’s hosted under the rubric of UNDP’s ‘Innovation Support for Social Protection: Institutionalizing Conditional Cash Transfers’ [Award ID: 00049804, Project: 00061073; Confer: Output 1, Target 1.2 (a) & Output 3 (a), (b)]. In fact we had no clue of this until recently when we searched the web and got this information.”

A case was filed against the UID/Aadhaar project in Delhi High Court, which is now transferred to the Supreme Court. The next date of hearing is on 28 January 2014.

Whoever forms the next government in Delhi must scrap UID/Aadhaar related legacy of Indian National Congress-led regime. The democratic mandate in Delhi is against UID/Aadhaar which was made compulsory and caused hardship to residents of Delhi.   

After the war with China in 1962, the Government felt the need of a strong indigenous electronics base for security. Department of Electronics was set on 26 June 1970 directly under the prime minister. NIC started functioning in 1977. In the aftermath of Kargil conflict, the need for UID/Aadhaar/NPR number appears to have been engineered. Like Unique Identification Authority of India (UIDAI), NIC signed memorandum of understanding (MoU) with the state governments/union territory administrations. Later, NIC services were extended to states and districts.   

Notably, the NIC had raised concerns over privacy and security of proposed database of UIDAI as early as 6 November 2009. NIC wrote, "It has been proposed to hire the data centre services for PoC (proof-of-concept) and prototype on rental basis. It is presumed that the data related to UID will be hosted in a government Data Centre. If not, the issues related to privacy and security with respect to UID data may require to be taken into consideration."

In an unconvincing response, UIDAI replied that hosting the data on a private network "does not necessarily lead to violation of privacy and security." UIDAI argued, "There will be appropriate SLAs (Service Legal Agreements -- both legal and technological) to ensure that the data is protected. It is to be mentioned that a number of sensitive database (Income Tax and PFRDA, to name two of them,) which ensure security and privacy, though they are not necessarily housed in 'government' Data Centres." The letter was disclosed by Press Trust of India (PTI).

On 8 May 2013, Rajiv Shukla, the Minister of state for Parliamentary Affairs and Planning informed Lok Sabha that Dr BK Gairola, Director General, NIC who chaired the Biometric Standards Committee of UIDAI, which was created on 29 September 2009, submitted its report on 30 December 2009 incurring a total expenditure of approximately Rs66,000. It appears that NIC was silenced into a state of unquestioned obedience after its initial objections. But NIC’s concerns assume great significance in the light of disclosures about the involvement of foreign intelligence agencies eyeing the centralized databases like CIDR database of UID/Aadhaar numbers, NPR and NDAL. It is inexplicable as to why the NIC, which does not have any previous experience of dealing with biometric data, was asked to chair a committee meant to recommend biometric standards for biometric profiling? Or is it the case that NIC was always involved in electronic profiling since its inception during internal emergency given the fact that biometric data is ultimately stored as electronic data?

In the meantime, the National Identification Authority of India Bill, 2013 is all set to be introduced to provide legal basis to UIDAI in the current session of the Parliament without incorporating several recommendations of the Parliamentary Standing Committee on Finance including those concerning national security and illegal collection of biometric data. The Bill of 2013 has almost the same text which was introduced in 2010 and was rejected by the Parliamentary Standing Committee in December 2011. There is nothing new in it except addition and substitution of few words.  

The NDAL is being created with the help from NIC amidst huge demand for arms by private security agencies. Among other ramifications such a proposition appears to be a precursor of ‘private territorial armies’ proposed by Captain Raghu Raman, the Chief Executive Officer (CEO) of MHA’s National Intelligence Grid (NATGRID) in his earlier incarnation as CEO of a multinational security company, Mahindra Special Security Services Group, a subsidiary of the Mahindra Group. He argued that corporate must step in because government cannot ensure internal security of the country. In his attached (see below) ‘Confidential’ Advisory Paper titled “A NATION OF NUMB PEOPLE”, Capt Raghu Raman argues, “enterprises would need to raise their own protection units. The idea may sound outlandish but in fact most of urban citizens do pay for private security for their homes and colonies. So do corporates. The idea is to take it to the next level and have private protection units that can work in close cooperation with law enforcement agencies. Think of it as a private territorial army.” Associations of companies like FICCI and ASSOCHAM have already underlined the link between NATGRID and UID number.

Capt Raghu Raman concludes his paper stating, “If the commercial czars don’t begin protecting their empires now, they may find the lines of control cutting across those very empires.”

This was the considered view of Capt Raghu Raman as a servant of a commercial empire. Can it be ascertained as to whether or not he has changed his view in his new role as a contract employee of MHA and as a servant of citizens of India?

According to Oxford Dictionary, meaning of the word “NUMB” mentioned in the title of the paper is “unable to think, feel, or respond normally.”

Unless Indians are indeed “numb people”, they will feel a logical compulsion to resist countless assaults on democratic rights in the name of national security. While national security must be robust enough to deal with external and internal threats of “commercial czars” who engineer internal strife and profiteer from war mongering but if citizens’ rights are mortgaged in the hands of these czars nothing worthwhile remains for defending. Security forces and agencies who get nurtured by the taxes of citizens have relevance only if they protect their rights, they lose relevance for citizens if they become available on rent to private forces.

The advertisement issued on instruction from MHA states that arms licenses will not be valid without the unique number after this date. The arms license holders have to fill up the attached form in this regard. This advertisement has been published by Government of Bihar. A specific order from District Magistrate (DM) of Patna is significant because similar orders are likely to be issued by all the 600 DMs in compliance with the order of MHA. The order dated 4 December 2013 is attached. It was reported as recently as August 2013 that the state governments of Uttar Pradesh and Bihar were opposed to such a move. This advertisement reveals that government of Bihar has chosen to fall in line and change its position. It is not clear as to what made it alter its previously held position

It may be recalled that ahead of the launch of MHA’s first National Population Register (NPR) (along with 15th Census 2011) on 1 April 2010 by Registrar General and Census Commissioner of India, on 23 February 2010, Mullappally Ramachandran, Minister of State in the MHA had informed that that the government is planning a national database of arms license holders in a written reply in the Lok Sabha. He had informed that the government will review various provisions of the Arms Act, 1959 and Arms Rules, 1962 with regard to grant of arms licenses for possession of arms and ammunition by individuals and manufacture of fire-arms in the country. The amendments will include a provision under the arms rules, under which the licensing authorities will be required to maintain a database and to share the data with the central government which shall maintain a national database. This came after the announcement about the setting up a National Intelligence Grid (NATGRID), the Crime and Criminal Tracking Network System (CCTNS), the CIDR of UID/Aadhaar number and NPR. There was a proposal to bring amendments in the Arms Act to oblige the licensing authority to maintain a database with the help of NIC. It is not clear whether the proposed amendments were made. Meanwhile, as of August 2013, data from 97 districts from southern states of Karnataka, Kerala, Tamil Nadu have already been compiled in the database for NDAL.


As per the Arms and Ammunition Policy for Individuals of Ministry of Home Affairs (MHA) includes a provision that obliges “the licensing authority to maintain a database as may be specified and to share the data with the Central government which shall maintain a national database. Accordingly, a provision for database will be made by amending the Arms Rules. National database including data on PB weapons may be maintained centrally by MHA. State Governments are being requested to instruct all DMs to maintain a comprehensive and complete data base of all licenses issued by them, which may be shared with the Central Government.” It is not clear whether the Arms Rules created as an act of subordinate legislation have been amended through yet another act of subordinate legislation. Notably, Arms and Ammunition Policy for Individuals available on the website of MHA does not mention any date or year.

It is noteworthy that the manifesto titled “2083: A European Declaration of Independence” was brought out by Norwegian gunman and neo-crusader, Anders Behring Breivik who carried out the heinous attacks on his fellow citizens. This 1500 page manifesto refers to the word “identity” over 100 times, “unique” over 40 times and “identification” over 10 times. There is reference to “state-issued identity cards”, “converts’ identity cards”, “identification card”, “fingerprints”, “DNA” etc. The words in this manifesto give a sense of deja vu.

In a related development, National Database and Registration Authority (NADRA), Ministry of Interior, Pakistan is also undertaking a similar exercise. Is it a coincidence that both the countries are undertaking the exercise at the same time? Will it prevent drone attacks and the ignominy of mouthing verbal opposition to such assaults on its sovereignty? The core question is: what has improved in Pakistan due to NADRA’s citizens’ database except facilitating precision targets by drones?

Even before Planning Commission’s UIDAI and MHA’s NPR conceptualized their biometric and demographic database, Pakistan’s NADRA claimed that it had successfully profiled all its citizens. Wikileaks revealed that the citizens’ database was handed over to US agencies. In case of India, there will be no need for a database handing over ceremony because the database is given to the security agencies through their proxies who in turn are subservient to legislative will of legislatures in US, France and UK unlike India.    

Big data companies are looking for databases of diverse kinds. The question is at what price will NDAL’s data be available? UIDAI had replied that hosting the data on a private network "does not necessarily lead to violation of privacy and security," what if the private network happens to be a big data companies like MongoDB, In-Q-Tel, L1, Safran and Accenture? If Government’s reply is still the same, it should come out with a White Paper explaining in what circumstances security and privacy is violated and what aspect of its breach is acceptable and tolerable and what aspects are non-negotiable and constitute acts of treason. If storage and mining of biometric data by these companies is legal and legitimate, the question is why does Government consider this data to be “national assets”?    

Curiously, the first NPR that was launched with 15th Census seems to be making all the Indians April fools of sort but not for a day but forever. Isn’t this unique number of arms license holders linked to the creation of the NATGRID which can easily undertake the role envisaged for National Counter Terrorism Centre (NCTC) that faced opposition from all the non-Congress State Governments and the biometric unique identification (UID)/Aadhaar/NPR number?   


You may also want to read…


Why biometric identification of citizens must be resisted? Part I

Biometric identification is modern day enslavement -Part II

Biometric profiling, including DNA, is dehumanising -Part III

Marketing and advertising blitzkrieg of biometric techies and supporters -Part IV

History of technologies reveals it is their owners who are true beneficiaries -Part V

UID's promise of service delivery to poor hides IT, biometrics industry profits –Part VI

Technologies and technology companies are beyond regulation? -Part VII

Surveillance through biometrics-based Aadhaar –Part VIII

Narendra Modi biometrically profiled. What about Congress leaders?-Part IX

Aadhaar: Why opposition ruled states are playing partner for biometric UID? -Part X


Is Nandan Nilekani acting as an agent of non-state actors? –Part XI


Aadhaar and UPA govt's obsession for private sector benefits–Part XII


Are Indians being used as guinea pigs of biometric technology companies? -Part XIV

Aadhaar: Is the biometric data of human body immortal and ageless? Part XV

Aadhaar: The propaganda of transnational vested interests –Part XVI


(Gopal Krishna is member of Citizens Forum for Civil Liberties (CFCL), which is campaigning against surveillance technologies since 2010)


Empower Network, another MLM selling blogging platform and dubious products

Empower Network is an online MLM, which is conning people by selling online marketing products by promising high commissions for a monthly fee

Is there another ‘Speak Asia’ in the offing? Empower Network is luring thousands of people across the world under the pretext of selling online blogging platform and ‘the secret formula’ to get rich by doing online marketing work. This is similar to many internet frauds that we have come across, like the Rs2,000 crore Speak Asia online survey fraud, multi level marketing (MLM) schemes, pyramid and Ponzi schemes that lured people under pretext of different products and services.

The portal Empower Network has been launched by D&D - David Wood and David Sharpe. They have also launched personalised blogs in the Indian market to promote their network through Indian bloggers. Many of their blogs mainly concentrate on spreading rumours and convincing people to join the genuine network, which is a lie! They promote Empower Network in their blogs and on Youtube videos and by sending emails. It is an online scheme which offers 100% commissions to members for luring others to join Empower Network, resembling an MLM scheme.

Founders of Empower Network, D&D - David Wood and David Sharpe

Empower Network charges $25 (and $25 every month as well) to create online blogging platform for their members (their flagship product - Viral Blogging System - VBS) which provides for free. After it charges $25 for every month, they also charge for its E-wallet (as deposit vault) as an online payment system which comes at an additional cost of $19.95 per month.


One such Indian blogger, Naveen Ullal who seems to be working for Empower Network, wrote all the basic requirements and services it was offering, how to get started and become rich quickly. He wrote, “One can easily start using Empower Network blogs after paying $25, but with the annoying Reserve Bank of India (RBI) rules, it gets terribly difficult for Empower Network to create a working Paypal account. Empower Network has come up with option ‘E-Wallet which costs additional $19.95 per month’ and enables Empower Network to deposit the money directly into your account.”

Empower Network also lures people with four other products (apart from VBS) and tools namely: Inner Circle Mastermind ($100 a month), Costa Rica Intensive ($500), $15K Formula ($1,000) and Costa Rica Masters ($3,500) to learn how to be a top gun marketer. These products provide stuff like video hosting, training and several coaching packages for start-up, home-based, small and medium businesses. The price ranges from $100 a month to $3500 as one time charges. Empower Network claims: “Approximately thirty thousand individuals avail themselves of Empower Network and its affiliate program, a place where affiliates can earn 100% commissions off the sales of Empower Network products.”

Rafik Khan, a call centre owner lodged a complaint on He said that Ankur Agrawal from India was his client who gave him database of job seekers from He wanted call center to call and convince them for registration on ‘Empower Network’ and so that he can gets 25$ a candidate from Empower Network. After he knew the truth that Ankur Agarwal is doing fake MLM business and cheating thousand of innocent people, he refused to work with him and told others to beware from master mind fraudster like Ankur Agarwal.

A typical selling point for MLMs is to highlight emotional life changing stories and hard-selling tone of Get-Rich-Quick Schemes. For instance, Empower Network says: “Try it today, 100% satisfaction Guaranteed! Join 1,55,000 people who already made money using this system! Grow Your Business online by using Empower Network, Don’t miss the opportunity!”

Even if someone starts blogging with the hope of earning a good income from blogging or to improve their business online but has failed to do so, then Empower Network will ‘educate’ them to become experts viz other coaching products described earlier.

One such victim user of Empower Network said on that he got an email from the founders and believed them. This lured him instead of providing an opportunity to earn. He neither got any help from Empower Network as promised nor did he get the refund of $25 and the bonus he “earned”. Another victim said that Empower Network pulled out money from her account three times in amounts of $100, $20, and $19.95 without her consent and she lost $139.95.

Moneylife contacted Sujit Harichandran, one of the persons associated with Empower Network in India for comments. He denied that Empower Network was a money-circulation scheme and it is about making money by enrolling people. However, on the contrary Empower Network promises 100% commission to people who recruit others in the Network.  Empower Network website shows its commission structure as Compensation Plan which exactly works like a Pyramid scheme.

Moneylife has frequently warned that "If it looks too good to be true, it usually is." This is clearly another in the same category.

To know more about online scams read our other articles:


Websites luring Indians with promises of huge income by working from home!


Home Web Profit: Another online scam attempts to lure people with the promise of riches for basic typing work done from home

“Great Money Lab”, another survey and email fraud, spreading wings

Automated Paydays India: Work from home business, is it real or a scam?


Another online survey company luring people


Competition heats up in online survey space with the entry of domestic MLM companies


Fanbox mail scam: Watch out for automatic debit from your bank, PayPal account


Fanbox spam scam: Don’t fall prey to the earnings mailer


SpeakAsia still can’t show valid, legal documents

Infotech company selling ‘home-based jobs’ and UID kits for easy money



Siddharth Rajsekar

3 years ago

I've personally earned over $25,000 using the Empower Network, and probably one of the first few Indians to get on their system.

There were definitely problems initially with PayPal etc, but In my humble opinion, as of now it seems to be the best way for people to make money online, even if you are new to internet marketing.

The trainings are very user friendly, and their new blogging platform is a very good value for money compared to trying to setup your own blog.

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