The online survey fraud is spreading like wildfire in India, as more MLM companies announce ‘get-rich-quick’ schemes, promising over four times on ‘investments’. But don’t get lured, as this works only for a few people at the top, while the rest end up losing money and personal reputation
As if SpeakAsia, which claims to be an online survey company, was not enticing (cheating?) enough of gullible people, a few domestic multi-level marketing (MLM) companies have entered the online survey scam. The only difference is that domestic companies are asking for smaller amounts as investment, compared to SpeakAsia.
After Moneylife exposed the dubious operations of SpeakAsia, one such MLM company, comments have been pouring in about other such MLMs functioning under the pretext of online surveys. (Read, "Another MLM scam in the happening, this time under the pretext of an online survey".)
FLC Online India, like every other MLM company, also makes promises of high returns. In fact, FLC says that after completion of certain units, the member is entitled to bonanza gifts that range from mobile phones to cars like Skoda and Mercedes Benz.
FLC Online India has initiated the concept of a special segment for market research and offers monetary benefits merely for filling survey forms.
Apart from paying regular income, it also gives income through the binary method, which is primarily based on algorithms. In simple words, it aims to involve more and more people in the scheme, luring them through dubious claims.
FLC claims, "Become a part of $25 billion market research industry and earn Rs4,000-Rs40,000 per month from home by giving your opinion about various products of MNCs for only one hour per week by filling online surveys." The promise of income merely through filling survey forms is questionable as the process itself shows.
A person seeking to become a member of FLC must make a payment of Rs6,500 and the company promises to pay Rs1,000 per week till 52 weeks! Further, there is binary income, or per pair income, for which FLC will pay Rs500 and the levels of binary is unlimited. On referring someone to join the company, it promises to pay Rs500 as direct or referral income.
On the binary level, a member making two new members-one each on the left and the right hands (which constitutes a pair)-also gets 10 market points. The 10 market points are equivalent to one unit or one pair and the member can keep on adding up to a maximum or 200 pairs per week.
Further, if the member refers someone in the chain, then he will be given 10 market points per person introduced. But there is a catch in all this. An incentive of two market points is released whenever you have two market points in the left team and two market points in the right team, which is also known as one pair.
On completing 20 units, which is 20 pairs consisting of 40 people, the member is rewarded with a colour mobile phone, and on completing 90 units the member will get a laptop. This sounds murky, for the company does not mention the specific brand of mobile or laptop.
A simple calculation shows that if one member makes 20 units, the company would earn a whopping Rs2.6 lakh. Consider this: 20 units is 20 pairs, which means 40 individuals. Each individual pays Rs6,500 as membership fee, so 40 members give a total Rs2.6 lakh to the company. On the other hand the company promises only a colour mobile phone as a reward and the brand is not known.
Interestingly, on completion of 350 units and beyond, the reward could be a motorbike, or even a car-a Tata Safari, a Skoda, or even a Mercedes Benz. But there is a time period in which the targets are to be achieved to be eligible for these rewards.
A reader informs Moneylife about another MLM company by the name of Ram Survey, which also makes similar claims. The registration charge is Rs3,500, of which Rs500 is for life-time registration and the remaining Rs3,000 is a contribution towards an e-magazine called Ram Today, the member will receive fortnightly over 11 months. The company promises a weekly income of Rs500 for 44 weeks. Again Rs500 will be paid as binary income and Rs250 as referral income. There are also bonanza gifts ranging from mobile to cars, based on units earned.
Both the companies described, display pan cards and certificates of incorporation (as legal proof) on their web sites. The validity of these documents is to be verified.
Moneylife Foundation, an affiliate of Moneylife, is a not-for-profit organisation that is working to promote financial literacy and has always advised people not to invest in MLM companies that are not registered with the Securities and Exchange Board of India (SEBI) or the Reserve Bank of India (RBI). However, many people continue to be lured into the trap with the promises of high returns and easy income.
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(SpeakAsia still can't show valid, legal documents)
( Stockguru.India allegedly dupes 2 lakh investors of over Rs1,000 crore)
There is no point in moaning and groaning about seafarers being held in captivity. The Indian government must understand that piracy is an extension of the military war against India and the response must be in line with the consequences of the attacks
Besides, writing for Moneylife, as an ex-seafarer, I also write for a niche shipping magazine and run a fairly popular blog on maritime matters. There is a decent but loyal fan following from among seafarers and their family members and, till now, I have resisted the temptation of cross posting. But matters pertaining to the condition of Indian seafarers and how this impacts India's economy have reached a point where it would have to be described as an undeclared war on our coastline and seafarers.
Frontline seafarers, representing quietly the cutting edge of India's exports and imports, are being slaughtered like sitting ducks at a country fair shooting ground. Now the target of pirates, rampaging through what has been called the 'Silent Service', the Merchant Navy, was as a matter of fact the one uniformed service that had the highest casualties in World War II.
But this is a different sort of war, more economic, than military. The colateral and dispensable Giffen goods in this case are seafarers. Piracy has suddenly overtaken, by leaps and bounds, the twin large issues of fatigue and criminalisation of seafarers, which have impacted them the most over the last few years. Fatigue has been a problem due to cost-cutting and reduction of manpower on board, and criminalisation relates more to port state authorities holding seafarers as legal hostages on a variety of issues. But rampant piracy of the Gulf of Aden/Horn of Africa sort, and the subsequent torture as well as murder, is reaching unprecedented levels, especially for seafarers of Indian origin, because of the perceived activities of the Indian Navy in justifiably trying to control matters.
India's economic growth has not been without an increased presence at sea of Indians. Singling out Indian seafarers for torture and worse is, therefore, also having a direct impact on the competitiveness of trade to and from India. Episodes reported include hogtying people and then looping an electric cable on their genitals, in a way that it tightens every time the prisoner tries to shift, and placing them on burning hot steel decks without any clothes on. Another method is to take a person and lock him inside the fish room at temperatures below 20 degrees centigrade, naked, or with ice in his underwear strung up to the meathooks. At least one case of keel-hauling a person below the hull of a ship has been reported. The recent case of the "Asphalt Venture", where half the Indian seafarers were taken off the ship and placed as prisoners ashore, has been well covered. Of course, the ship and cargo are held hostage all the time, while negotiations for ransom continue.
By the end of it, the seafarers are often too traumatised to want to go back to sea again, and the shipowner has lost all market worth and credibility-often going bust in the bargain. To be fair, as many foreign shipowners have been impacted in proportion to their presence at sea, but of late Indians are being singled out for special bad treatment.
Outside declared world wars and historical conflicts dating back to gunboat days, worldwide, merchant ships and those onboard are governed by the UNCLOS (or United Nations Convention on the Law of the Sea), as far as free and innocent passage through defined territorial or international waters is concerned, among other things; except in situations of war. Of course, the Convention is far too complicated to be brought out in a short article. But with regard to the issue in focus, the Gulf of Aden was declared a War Risk Area as far back as mid-2008, and over the last three years this War Risk Area has spread to include all of the Arabian Sea and parts of the Persian Gulf, as well as much of the Indian Ocean.
Take a look at a map of India and you will realise how we are now surrounded by a total War Risk Area, and the reports of torture and killing of Indian seafarers coming in confirm that a war is on. It has just not been declared, and it is fairly seriously suspected (not with proof yet) who is financing this war against India. It is also clear that it will have a major damaging impact on our economy.
Here are some numbers that will help quantify issues.
# War risk extra insurance for hull and machinery (the ship itself, not including personnel and cargo), which was about $500 per transit in the Indian Ocean till around 2008, went up to $150,000 in 2010, and is rising even higher in 2011. This is for a typical Panamax-sized bulk carrier transporting about 70,000-80,000 tonnes of coal; it is much more for bigger oil tankers and container ships.
# Exact numbers for kidnap and ransom insurance for crew members are never declared, but are estimated to have gone up by 30 times, for ships in and around the war risk zones, between 2008 and 2010. Cover for cargo and property as well as medical and trauma coverage for crew and families has now been added, raising the costs even more.
# Cargo insurance numbers are also not well known, since they are usually covered separately by the charterers and cargo interests, but in the case of typical 20-feet containers, it has gone up from $25 to between $200 and $350, depending on a variety of factors. It is estimated that cargo insurance rates for bulk cargoes have also gone up 25-30 times in the last three years.
# Damage hull insurance, which typically covers damage due to a variety of reasons, including harm from heavy seas, collision, sinking, capsizing, grounding, fire or piracy, is estimated to have doubled on a global annualised basis.
# Much of the business which was done on easy credit terms, achieved variously-with India being the beneficiary of good credit ratings-have moved into cash upfront (FOB load port) for imports into India and payable when cargo reaches destination (CIF discharge port) for exports from India. There are major cash-flow issues here which basic traders and businessmen will understand.
In addition, of course, seafarers are simply refusing to sail in these waters on unarmed and unprotected ships, no longer is it a question of just additional money. Where Indians cannot be found, the shipping companies employ people from other countries, and/or place armed guards on board, which typically costs between $1,000 and $2,000 a day for a group of four commandos, all other costs at actuals. The legality of armed guards on board is a wide open issue.
The big beneficiaries here are, obviously, the insurance companies. Not only are their insurance premia going up, but some of them are getting into the business of organising "non-commercial" protection services at sea, often as part of the insurance package. The names of at least two specific international banks and two payment processing/remittance companies based out of the developed countries have been mentioned with some amount of credible association to the money trail, which is estimated to be around $9 billion-$10 billion this year.
In addition, it is estimated that only 50% of piracy cases are being reported, the rest choosing to stay quiet, so that negotiations and reputations do not suffer.
The Indian coast and ports are at the epicentre of this violent attack on the shipping economies, and India is projected to be the single largest sufferer, with a heavy impact on the economy, for the additional costs will be loaded to the transportation costs. When this trouble first started, people thought that piracy happened due to local reasons and they reacted accordingly. Subsequently, big names moved into the global piracy support business, and converted it into corporate entities. Now, in the next evolution, it seems that this has moved on to war between countries with the aim of damaging others' economies. And by India's geographical location, the choice of fall guy country appears to be obvious.
What are the solutions, then?
For one, the Indian government needs to understand and accept that there is a war on, and the biggest loser will be India, since the battlefield will be the oceans around India. This has to be understood, and pro-active steps taken to ensure that Indian shipping interests and cargoes are not targeted; for far too long has India been following a lose-lose policy in the Indian Ocean. To start with, the island of Perim in the middle of the Bab-el-Manded, on which India had historical rights, needs to be controlled. Likewise, Indian warships need to be given the right to use islands in the Chagos Archipelago, just as the US utilises Diego Garcia, for use as a base to launch counter moves against the pirates.
Next, immediate steps must be taken to protect the country's oil exploration industry which is located very close to the area of action. There are all sorts of reports floating around, including rumours of mini-submarines of unknown origin, which could also be an extension of the rapidly technologically-evolving piracy business. Already, from small boats doing 10-12 knots, the pirates have moved to high-speed skiffs doing 25 knots, launched from secure mother ships. And our dependence on our oil exploration industry cannot be risked.
Third, the names of the banks and financial processing companies suspected to be in this business are well known, and they happen to be present in India on legitimate business too. Nothing strange about this; bankers have financed wars in the past too, often for both sides. (Rothschilds is one name which has come up again and again, and continues to do so.) The Indian government and its new-found financial muscle must get the message across that this sort of economic warfare will not do. Reports of senior persons from these banks and payment companies visiting India in the recent past, to get a bigger share of the pie-for example in the railways, or the insurance business-have been doing the rounds, and they have not got an entry; this is their logical retaliation.
Finally, the Ministry of Shipping and its subordinate offices have to take pro-active steps in advance to protect Indian shipping interests. UNCLOS is fine, but we cannot continue to be the pleasant self-effacing fools at sea, when everybody else has upped the stake. If we have to be more resilient, if our ships have to be armed and hardened, and if we have to take risks to establish our positions, so be it; our seafarers are willing to fight for the flag and the country, but not with their arms tied behind.
There is a war going on off our coasts; we are already surrounded by a War Risk Zone and we need to do something about it now. Moaning and groaning about seafarers held in captivity is not going to solve issues-no seafarer was forced to go on a ship and take these risks. It's just that some of us need to raise our voices so that the larger problems are recognised, identified and solved. And if for that we have to arm our merchant marine, it must be done. The sooner the better, otherwise, with every day, the numbers are mounting against us. Arm our boys NOW, to enable them to do their duty towards flag and country-that's what it has always been about. The war has expanded from purely military engagements to economic warfare-the response has to be along those lines, too.
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