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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MMTC’s plan to launch its own jewellery brand comes at a time when Indian jewellers are waking up to the potential of branded jewellery, but will the dream bear fruit?
The government undertaking Minerals and Metals Trading Corporation of India Ltd (MMTC), which is the biggest bullion trader in India, has announced its plans to launch its own jewellery brand. MMTC already has a silverware retail arm called Sanchi, and plans to have 30 more outlets across India for its new brand. While sentiments are buoyant, it remains to be seen whether the scheme becomes a success.
The announcement comes at a time when the market is booming, and sector commentators feel that with increasing disposable income of the middle class, there is an immense scope for branded jewellery. "Gold and jewellery are traditionally considered to be sound investments. The World Gold Council is optimistic about the future. Platinum and diamond are also catching up. Even during the recession, the domestic demand did not wane. With the number of earning youths going up, branded jewellery will definitely do well," an analyst told Moneylife.
However, lifestyle brands, which have been launched by PSUs, have not fared well in India. Be it Hindustan Machine Tools (HMT), whose watches were a rage once, or the khadi products, which have failed to stir up excitement in the youth. The reason for that may be lack of publicity, shoddy products and the 'not hip' tag that remains associated with indigenous brands, sold by indifferent salespeople.
A few weeks earlier, Dubai-based Damas dropped its India retail project due to the organisation's internal problems. Gitanjali Gems, which had entered into a joint venture for the jewellery retail business with the brand two years earlier, has also been hesitant in launching a new chain, which it has been talking about since long.
The other players, therefore, are rushing in to fill in the vacuum. Many of them are strengthening their retail network. With its pan-India network and assured presence, analysts say that MMTC already has an edge over the lesser brands. Currently, MMTC is India's largest trading firm, and the largest importer of gold.
However, it is the smaller or region specific brands like Chandrani Pearls and Joyallukas that have fared well, because they can manage their costs better. Tanishq may be the only exception in this space. The retail sector is facing a severe problem with staffing and cost management, and most of the projects have not been executed well. Moreover, in the apparel-accessory-lifestyle segment, many brands have failed. Barring a few successful ones, many are barely surviving or have quit.
However, the market outlook is positive. According to the Gems and Jewellery Export Promotion Council, the sector witnessed an impressive growth of 46.89% in FY 2010-11 in exports, and the sector is expected to see a growth of 13% from 2011-2013. The diamond industry in India is predicted to remain stable during 2010-11 due to improved prices and steady demand, as per CRISIL.
Thus, jewellers are finally looking towards organising the fragmented sector to make the most of the opportunity. Joyallukas, the Kochi-based jewellery giant, which has been talking about an IPO (initial public offering) for long, is finally coming to the market following SEBI's nod. The IPO will come at May end. The money raised, says the company, will be used to expand its retail presence (especially in north India), with the opening of 14 stores. Other notable players, like Tribhuvandas Bhimji Zaveri, are also strengthening their presence.
"We must use all of our policy instruments-interventions in the grain market, fiscal and monetary policies-to bring down inflation further and re-anchor inflationary expectations to the 5% comfort zone," C Rangarajan, chairman of the Prime Minister's Economic Advisory Council said
Vadodara: Managing inflationary pressures-particularly in food grain prices-was the biggest challenge before the policy-makers, reports PTI quoting C Rangarajan, chairman of the Prime Minister's Economic Advisory Council.
Mr Rangarajan, a former governor of Reserve Bank of India (RBI), was speaking on the topic 'the growth path and some concerns on the way' at a function at Federation of Gujarat Industries (FGI) today.
"There are a few areas where immediate engagement of the policy-makers is needed. In the short run, managing inflationary pressures, particularly foodgrain prices, is the biggest challenge," he said.
"We also need to watch out what happens to crude prices in the global markets. We must remain committed to maintaining inflation at a low level."
Saying that he did not subscribe to the idea that high growth demanded higher level of inflation, he stated, "We must use all of our policy instruments-interventions in the grain market, fiscal and monetary policies-to bring down inflation further and re-anchor inflationary expectations to the 5% comfort zone."
The second concern, he said, was the balance of payments as the current account deficit had remained very high at 3.7% of the gross domestic product (GDP) in the first half of 2010-11. "Efforts must be made to bring down the current account deficit to a more manageable level of 2% to 2.5% of GDP."
This, he said was desirable to impart much-needed stability on the external payment front and to reduce the risk to the domestic economy from volatility in international financial markets.
Another critical challenge was fiscal consolidation which was a necessary pre-requisite for sustained growth, he added.