Regulations
NEFT: Sender’s Name, Please
Why can't RBI force banks to share the sender's name?
 
“The Core Banking Solutions (CBS) of banks should be enabled to capture complete information from the relevant fields in the messages, data files which can be displayed to customers when they access their accounts online or provided to them additionally when they approach the branch counters, help desks, call centres,” says RBI with regard to electronic transactions. Yet, users of National Electronic Fund Transfers (NEFT) end up struggling, without recourse, to obtain information that would need to pass muster with the tax authorities.  
 
An NEFT credit only provides the name of the sender and amount credited. Persistent follow-up with banks—even tech-savvy private banks—will only get you the city from which the money was transmitted. Banks plead helplessness and claim that their systems are not configured to capture this data. But basic know your customer (KYC) rules require account-holders to furnish their address and PAN number; it should be a simple matter for RBI to insist that such details should be included in NEFT forms. After all, tax officials don’t care whether NEFT transactions provide the information or not; the onus is on the taxpayer.
 
A number of businesses that accept online payments for sale of products, subscriptions, memberships as well as NGOs who accept online donations are left vulnerable to harassment because banks to not follow RBI’s directive that ‘appropriate details’ of NEFT credits should be made available to depositors. 
 
Many who are affected by the inadequacy of information provided in NEFT remittances reacted sharply to a Moneylife report on the issue. PS Ramachandran, in charge of his cooperative society’s membership subscriptions made by NEFT, says, “One is hard-pressed to identify the amount to the correct subscriber/member (even when it is a fixed sum).” Anil Gidwani points out that “We in India do not understand the need to question deposits into our accounts, which is also used to create legal rights (as, for example, an illegal occupant depositing in a society's account).” Without information about the sender, the recipient is also in no position to refuse the deposit or transfer it back. 
 
Moneylife Foundation has submitted yet another letter to RBI’s customer service department on 9th January asking it to direct banks to provide complete information on NEFT transactions.

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COMMENTS

Chintan Bhatt

6 months ago

What is the status now ? Can we track NEFT transaction ? what info. bank provides ? What is the action of RBI after your submission of letter ?

Usha Pillai

2 years ago

Very very crucial information for the beneficiary. Thanks for taking it up with the RBI. Banks will also be benefited because the customer queries in this regard can be reduced if not eliminated.

Health Claims Could Cost Vemma and its CEO Millions
TINA.org compiles database of more than 200 instances of health claims
 
A 1999 FTC Consent Order prohibiting Vemma and its CEO, Benson K. Boreyko, from making unsubstantiated health claims appears to have been ignored for the past decade. A TINA.org investigation has cataloged over 200 instances from 2005 to 2015 in which Vemma distributors have either made or referenced claims that the Vemma product line can treat, cure, alleviate the symptoms of, prevent, or reduce the risk of developing diseases and disorders. There are even examples of Boreyko making and referencing health claims. Each separate violation of the FTC order carries with it a $16,000 civil penalty, which means Boreyko and Vemma have an exposure of well over $3 million. The instances have been cataloged into a database by TINA.org. 
 
And while a database of 200 plus health claims might sound like a lot, according to Boreyko there have been thousands more. In a video blog, the CEO explains:
I’ve got an exciting topic for you, at least it’s exciting to me, because it talks about the results people are getting with the Vemma formula. . . . What I’m excited about with this [Vemma’s two clinical studies] is that it documents the testimonies, the thousands, 10s of thousands of testimonies that we’ve all heard about — this tremendous Vemma formula and, and it tells us what it’s actually doing inside the body.
 
The validity of the two clinical studies that Borekyo references above has recently been called into question in a pending New York state civil litigation.
 
The database also includes four other videos of the CEO: in one he states that Vemma PM helps relieve pain (before saying he can’t say that); in two others (1,2) Boreyko says that some Vemma products can help slow down the aging process; and in the fourth video he is pictured on stage at a large Vemma event reading the testimonial of a man who claims Vemma helped treat his lupus.
 
In total the database contains over 130 websites, blog posts, Facebook posts and tweets, as well as 80 videos and 20 recordings. There are about 20 videos from men that describe themselves as doctors and over half of these are videos of Dr. John Edwards, who claims Vemma can help with just about any chronic illness in addition to Alzheimer’s, Parkinson’s, multiple sclerosis, cancer and even AIDS.
 
Also frequently featured is Star Royal Ambassador Brad Alkazin – the database currently contains seven videos of him giving a fairly similar presentation each time (always mentioning how Vemma helped his mom’s blood pressure, among other things). In one of these videos, however, Brad explains that Vemma is beneficial for people suffering with immune issues and recommends to the audience that if they know someone with MS they should get them on Vemma because they will feel better. He then offhandedly says “that’s how I built [my business] for the first four years.”
 
As far as the range of health claims distributors are making about Vemma products – they run the gamut from treating blood pressure to curing cancer. Some of the most common health problems that distributors claim Vemma can help with are high blood pressure, high cholesterol, diabetes, fibromyalgia, pain and arthritis.
 
In June 2014, TINA.org first alerted Boreyko and the FTC to the multitude of outrageous health claims being used by distributors on the Internet and through social media to market the Vemma multi-level marketing business. Boreyko claimed shock and horror and pledged an overhaul of Vemma’s compliance department. The next month, a TINA.org post exposed dozens of other unsubstantiated Vemma health claims on the Internet. And then starting in November, TINA.org took to Twitter under the hashtag #VemmaTruth to expose still more unsubstantiated health claims being made about Vemma products. Many of the sites and videos were taken down after TINA.org outed them.
 
Our new database is a compilation of items we have previously outed sprinkled with a few we found that are being exposed for the first time. What is clear from viewing the scope and breadth of this database is that using health claims to sell the Vemma business has been pervasive and systemic, and continues to this day.
 
TINA.org reached out to Boreyko for comment but he has not responded.
 
 

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MLF seminar on Investment: Investing in the Right Asset Classes
Debashis Basu explained how one can invest in a mix of financial products for retirement and other goals
 
In the second part of “Back to Basics: Investing & Insurance”, Debashis Basu, editor Moneylife, educated the audience about various asset classes and how to allocate savings effectively in each. Most savers are clueless when it comes to savings. They earn,  spend, and whatever is saved is kept in bank fixed deposits with no savings plan. This habit, Mr Basu cautioned,  would leave little money for meeting  future goals such as buying a house, children’s education and  retirement. Mr Basu spelt out various ways to be smart with money and  how to invest safely.
 
Mr Basu took the audience through how they can plan their investments for different goals. He urged people to be cautious and avoid making mistakes and lose capital. However, too many investors are lured by the image of big financial brands or glib talk of sales staff hawking their products. These include stocks, mutual funds, gold and realty. 
 
He explained the difference between investment products and speculative investments and the impact of inflation on their savings. He demonstrated how inflation erodes the value of their nest egg.
 
Stocks and equity funds are the best assets available for creating long-term wealth. The best way to invest in stocks is through regular investing in equity mutual fund schemes. He pointed out how much one should invest in equities and fixed-income products. There are various fixed-income products available, but one should choose those that deliver tax-efficient returns.
 
On gold, Mr Basu said the metal is a precious, but speculative, investment and cannot be valued since it does not pay interest or dividend. The price of gold is only derived by what others are willing to pay for it on a given day. 
 
If you buy gold, betting on guaranteed returns, based on previous price trends, you may be in for a nasty surprise. This has been Moneylife’s stand for over three years and the recent crash in gold prices demonstrated the risk it carries.
 
Mr Basu also pointed out that all talk about high returns on realty is based on anecdotes rather than hard data which is simply not available in a uniform, standardised form over a long period. 
 
Mr Basu said that people must differentiate between a house that one buys to live in (which can also appreciate significantly) and realty as an investment which will be bought and sold. 
 
Realty carries high transaction costs in terms of stamp duty, transfer charges and taxes. This leads to significant erosion in returns.
 
He warned against mixing investment with insurance through products like unit linked insurance plans (ULIPs) saying, “there are better investment products available at lower costs that can be used for investment.”

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