Saturday, 30 April 2016

Q&A

We get lots of questions every week. Some of them are simple to answer, others are more complicated. Some are deeply satisfying, others are almost unbearably depressing. Some just make us mad. Really, really mad at the abuse and mistreatment that some consumers are forced to endure.

A reader asked:
“What's is Forex Trading, and what experience does someone require to do.”
Forex is an abbreviation for “Foreign Exchange”, the process of exchanging one currency for another. Anyone who’s travelled will know the process. However, you’ll often see Forex being advertised as a way of making money. The idea they sell is very simple. Sign up on an online trading platform, send them money and you can start trading between various currencies, trying to buy some cheap and sell them if they improve in value.

It sounds simple but the truth is very different.

In fact Forex trading has the potential to ruin your finances. Another reader contacted us recently asking about one particular web site that offers to multiply (“leverage” is the technical term) your investment by up to 200 times, effectively giving you millions of Pula to trade with. What they neglect to tell their customers is that it works both ways. Yes, if you can correctly predict the fluctuations in the exchange rates between currencies you might make some money but they conveniently forget to tell you that it also means you can lose your entire “investment” in moments if the exchange rates go the other way. Within minutes of searching online I found stories of people who had lost over half a million Pula in moments trading Forex.

Another reader also asked us about a web site calling itself “23Traders”. He said that “they phone me everyday to invest on them, there is a guy who normally phones me telling me to deposit up to 10 000 US dollars so that I can make good profit”. Anyone who is that keen has an agenda they’re not telling you about. It’s curious that this company, who claim to be registered in Anguilla (an island in the Caribbean with a population half that of Ramotswa) and who claim to have a subsidiary in London were calling this reader from a number in Manchester.

The simple truth about Forex trading is that it’s a business full of suspicious characters. It’s a business that should be left entirely to the experts and that means experts such as banks and professional investment companies, not mere mortals like you and me.

My advice is only to trade Forex if you can afford to lose every thebe you invest instantly. If you care for your money, then think again.

Another reader asked the following question on our Facebook group.
“I have received a letter from RSA. The post stamps are from RSA and the envelope is addressed to my former address... with a pen. No letter head, but tempting contents. NO LETTER HEAD. Apparently a Mr X died in a plane crash in 1959 and FNB RSA CEO is looking for me to give me millions as I am an identified beneficiary. I hv to treat it urgently and confidently. Now i hv to send all my current particulars. Is it real?”
I’m sure most of you will instantly recognize this as a scam. The novelty is that this time it was an old-fashioned letter, not an email or a message on Facebook. I suspect that this particular scammer thinks it adds extra authenticity to the story he’s telling.

Of course what’ll happen is that in order to get these “millions” (which we all know don’t really exist) the victim will first be asked to send money to the scammers. They’ll claim it’s a legal fee, an account opening fee or sometimes even a bribe. Whatever it is, that’s what the scam is really all about. As with all scams, it’s about you giving them money, not them giving it to you.

Another question we got was about one of our old “favourites”, furniture stores. The reader said:
“I want to bring to ur attention the question of reasonability of furnished shops. Imagine buying a stove, fridge etc refurbished as new?!! This is happening herein Bots. Any refurbished item should be labeled as so and the price should reflect so as well. But I hardly see any item displayed and labeled accordingly. I can honestly say they do repair and refurbish so how come we never see the differences. What are u guys doing about this so we can pay for what is consciously?  Secondly some items on display like fridges tvs etc are they suppose to get the same price as a packaged product? If not how much discount?”
It’s an excellent question. It’s also one of the maddening ones.

The rules are actually very simple. Section 13 (1) (c) of the Consumer Protection Regulations says that a company “fails to meet minimum standards and specifications” if “representation is made that the commodity is new when in fact it has deteriorated, or it has been altered, reconditioned, used or is second hand”.

It can’t be simpler. If something has been refurbished (and there’s nothing wrong with that) then the store must make that clear to any prospective customer. The same goes for items that were returned by another customer, that were repossessed or that have been on display. They’re not new so they can’t be sold as if they were. It’s forbidden.

What a sensible store would do is offer second-hand, refurbished or returned items to new buyers at a discounted price. We all love a discount, don’t we?

And what are we doing about it? We’ll explain this in simple enough terms that even the simplest of store manager can understand it. Like I just did.

The Voice - Consumer's Voice

Can I get delisted?

I want to complain about being listed at a credit agency by my bank without being notified of the arrears that I had with them. I went to the bank and indeed they listed me. But after approaching them, they told me that the arrears were cleared and the credit agency delayed to clear my name. I insisted them to write me a letter stating the date that the arrears were cleared but they are refusing. But I need this letter at another banks for them to process my loan. Without that letter I’m gonna have to wait for 6 months. What should I do for these guys to write me that cover letter?


I can’t speak for your bank, the one that listed you, but I suspect they’ll say that it was as much your responsibility as it was theirs to know that you had arrears with them. They were also within their rights to list the arrears with the credit reference agency. Despite what many people think credit reference agencies are good for everyone. They enable lenders to make rational decisions about who they lend money to. Lending to the right people makes borrowing cheaper for reliable borrowers.

However, when you clear a debt they are meant to update their records to reflect that. Obviously the fact that the arrears existed will remain on record (it’s true) but the full story needs to be there.

We’ve contacted your bank and asked them to investigate and maybe they can act a little faster. It’s the least they can do.

Correction: In the published article I said that the credit reference agency should "act a little faster". In fact they act solely on the instructions of their clients, in this case the bank. It's the job of the bank to work faster, not the credit reference agency.

Will they replace my phone?

My phone wouldn't on so I dropped off my iPhone6 at a phone repair shop in January 2016.

We kept calling the repair shop to check how far they were with the phone. They told us that the battery had died and needed a new one. They said they were expecting a shipment to arrive. He said batteries would be among the expected stock and that he would fix the phone.

My hubby kept following up and eventually they told him to come and collect the phone as they could not repair it. They said they didn't get the battery they were hoping for. I went there in March and the guy made a quick phone call and immediately told me that the phone was at his other repair shop and asked me to go with him to this new repair shop. Then they told me that my phone had been stolen along with other customers' phones.

They told my hubby the same story. Interestingly, they told him that he didn't report the theft to the police but he promised that he would replace it. Then they told my hubby that he needed until end of Easter to buy a replacement. Easter came and went and both me and my husband called him and his phone went unanswered. I then sent him messages through Whatsapp and SMS but he chooses to ignore them. Whatsapp also indicated that he has received and read my messages.

Please help. I have lost valuable information and quite an expensive phone. He is neither taking my calls nor my husbands. I really need your intervention. Should I report the matter to the police?


I don’t think this is a Police matter. As far as I can see nobody has committed a crime. Being useless isn’t a crime. Of course the repair store should have called the Police when they had the break-in and the reason is simple. If you don’t report a crime to the Police, how can you expect them to investigate it?

What this also means is that the store clearly didn’t have insurance. If they had insurance against theft then the insurance company would demand a police report. So they didn’t have insurance. So they’re even more useless.

I contacted the manager of the store and asked what he was planning to do to fix this problem and this is what he said.
“The plan is to get her a replacement, the only delay is the funds which ae not yet enough as of now but by month end April she will have her phone. As earlier we are taking full responsibility. Apart from her 3 other clients are getting replacements.”
So some good news. I hope. We’ll follow up with him to make sure he keeps his promise.

Monday, 25 April 2016

Another phishing email arrives

In comes an email, advising me to update my email account. Needless to say this doesn't relate at all to my email accounts anywhere but they're hoping it will for some of the millions of people receiving it.


If you click on the UPDATE link (which you shouldn't) you visit the following web page. However the see you're visiting is actually http://outfrandepts.jimdo.com, clearly nothing to do with Microsoft or Outlook. Someone's web page has clearly been hijacked.


If you're mad enough to enter genuine details (I'm not and didn't) this is all you get.


Meanwhile your email details are now in the hands of a crook somewhere far, far away.

Saturday, 23 April 2016

Be reasonable

Consumers need to be reasonable.

My dictionary defines “reasonable” as meaning “having sound judgment” and being “fair and sensible”. Unfortunately, not all consumers always behave that way.

Yes, before I complain about unreasonable consumers, of course I know that some stores, some suppliers, some service providers are unreasonable too but today I’m interested in bad customers.

A few years ago we were approached by a friend who ran a restaurant. He asked for advice about an awkward situation he’d had.

A customer arrived at his restaurant with a friend one weekend morning and they ordered coffee and cake. Shortly afterwards she called the owner over and told him that she didn’t like the taste of the cake. Ignoring the fact that she had eaten almost all of it before deciding it wasn’t to her taste he apologized profusely and told her she didn’t have to pay for it. In fact, she didn’t have to pay for her coffee either. She seemed happy and went away.

The following weekend she was back and guess what, exactly the same thing happened again. Having consumed almost all of a different cake she made exactly the same complaint. Although he was beginning to get a little angry he did the same thing again, apologized and reduced her bill to say sorry. She went away happy again.

The next weekend the same thing happened yet again but this time he was more assertive. His patience had worn thin and he politely told her that as his cakes clearly weren’t to her taste maybe she should think of eating elsewhere in future. For the third and final time he cancelled her bill and wished her farewell.

She came back the following weekend. This time he refused to serve her. He reminded her of the previous occasions when she had complained and he’d suggested she should select a different restaurant in future. She was stunned. Only when he made it clear to her that she wasn’t going to be served at his restaurant again did she understand. She’d been banned. Eventually she left, muttering and promising to wreak vengeance upon the restaurant and its owner for the rudeness she’d experienced.

She was a very good example of an utterly unreasonable customer. The restaurant owner was the reasonable one in this situation. She was costing him money and taking up a table that could have been used by a customer who was more reasonable.

We heard more recently from a consumer who was threatening to take legal action against his bank. Some months before he had taken out funeral and life policies with an insurance company and had completed forms with the bank to pay the premiums every month.

But something went wrong. For some unknown reason the bank failed to set up the monthly payment and the insurance company didn’t get their money so after a few months they cancelled the policy. That’s when the customer got angry.

Clearly the bank screwed up when they failed to make the payments they were meant to make. Also the insurance company were at fault. They seem not to have contacted the customer to remind him to make the necessary payments. However, both organisations have since apologized to the customer.

But that’s not enough for this customer. He wants to take action against them in the courts for P150,000 in damages.

But what loss has he suffered? Yes, the bank and the insurance company irritated him and I think I would be irritated in his position but I still don’t understand why he wants money from them. During the period he thought that he and his family were covered by the policies nobody died and no claims were made. What’s more, he didn’t even spend the money. The premiums he would have spent, he didn’t spend.

So you have to ask, what loss has he suffered? You could even argue that, admittedly through good fortune because he never made a claim, he saved money. And why hadn’t he noticed that the money wasn’t being deducted from his account every month?

I don’t think this guy is being reasonable. All he’s doing is spending quite a lot of money on attorney’s fees. Fees he won’t see again after the court rejects his case as having no value. Which they will.

We’re also frequently asked by readers why they can’t get their money back when something they bought doesn’t work. Whether it’s a computer, a cellphone or a fridge, when it stops working they take it back to the store for a refund and then get cross when the store says it’ll try to repair it first. Aren’t they entitled to a refund, they ask us?

No, they’re not. Not yet. The general rule is that when something you buy doesn’t work you are entitled to one of the three Rs: a refund, repair or replacement but critically it’s up to the store to decide which of these they offer you. They’re entitled to try and repair the device first. It’s only after the repair doesn’t work they you’re entitled before they offer you one of the other two Rs. That’s the reasonable thing to expect.

Here’s another reason why being reasonable is useful.

If you behave reasonably, the people you deal with are more likely to be reasonable too. If you go into a store and greet the serving staff with a smile, they’re more likely to smile at you. If you treat them with respect, they’re likely to do likewise. Yes, we all know that they’re paid to do it and you’re the customer but isn’t life better when everyone is nice to each other? This had even more effect when the situation is difficult or tense. I guarantee that you stand a better chance of getting that refund, another portion of cake or compensation for your losses if you’re the pleasant one in the conversation.

So be reasonable. Maybe even be nice. Your world will be a better place if you do so.

The Voice - Consumer's Voice

Must I pay?

I need your advice, I booked a restaurant for a private dinner on 2nd April as a birthday celebration. I was quoted P6,600 for this dinner (at P220 per guest).

But the venue was double booked because the landowners booked a festival in the gardens at the same time (the restaurant is in the garden) which attracted hundreds of people. At the last minute, the restaurant owner decided to move my private dinner to another spot to avoid the festival patrons. But now the owner wants me to pay the landowner a portion of the P3,000 that the landowner normally charges for events since my dinner was not hosted in the restaurant.

Is this acceptable?


No, of course it’s not. It’s completely unacceptable.

You had an agreement with the restaurant owner to host your function. You and he had agreed the details of this, including the price. The fact that he’s so useless that he double-booked the function is a matter for him to resolve, it’s not your responsibility.

If the only option available to the restaurant owner was to use the other spot for your meal, a spot that cost more money, then he should have explained that to you well in advance. If he wasn’t prepared to pay the extra money himself then he should have given you two options. Firstly, to pay the extra money yourself (which obviously you should have rejected), or for him to arrange an alternative venue for you that was at least as good and for no extra money.

Meanwhile I suggest that you write the restaurant owner a letter saying that the additional money is something for him to cover, it’s not your problem. He can cry as much as he likes for it but it’s not your problem.

It leaks!

I bought a gas stove on the 23rd February 2016.

On the 5th March I returned the stove to the shop after realizing that there is gas leakage when the stove is off despite that the gas cylinder is closed every time after cooking. The shop owner refused to change or refund saying they have to take it back to the manufacturer to investigate the leaking. I tried to tell the shop owner that taking the stove will mean that I don’t have a stove to cook with. He brought an old used stove as a form of loan to me while he has taken the stove. He was to call me as soon as the stove is back from Gaborone where the manufacture which was supposed to be about two weeks.

When I got home with the loaned stove I realized that it has the same problem as mine and is worse so I never used it. I waited for the shop to call until I went to the shop on the 2nd April to check if the stove is back. To my surprise the stove was in the shop but they had never called to collect it. I was furious about that then collected it. When I got home the stove is still leaking. I have not told them yet since they had told me that they can not change nor refund.

That is when I decided to seek help from your respective office.


First things first. Are you sure the problem isn’t with the regulator or the pipe you connect to your gas bottle? It’s worth checking that it’s working properly first of all.

If the regulator is fine, then you need to go back to this slightly suspicious shop and explain to them that selling you a stove that leaks gas is firstly a breach of Section 13 (1) (a) of the Consumer Protection Regulations 2001 which requires them to offer products that are “of merchantable quality”. Section 15 (1) (a) also requires them to offer services (such as a repair) “with reasonable care and skill”. More importantly it’s also enormously dangerous.

Explain to them that they’ve had a chance to repair the leak and they’ve also had the opportunity to give you a replacement stove that isn’t likely to blow up your house. I think you should suggest to them that the time has come to give you a refund.

Let me know what they say!

Monday, 18 April 2016

You still won't make money from Herbalife

Herbalife have released their 2015 earnings figures for their US "members".

If you ignore the fact that they can't calculate percentages correctly the results are still interesting. Interesting but not surprising. In fact it's the same old story. Almost all of the money is earned by a tiny proportion of the members.

Here are some specifics, taken directly from Herbalife's own figures.

80.2% of the members, that's 437,152 people, are just people who buy their products and don't have a "downline". These are the people on the bottom rung of the pyramid. They buy stuff from Herbalife but there's no evidence they sell it to other people.

The most interesting group is those people who earned commission from their downline sales. These are the "Sales Leaders With a Downline". In the USA in 2015 there were 68,768 of them. These are the people that Herbalife offer as examples of the riches you can earn from joining Herbalife.

But there are no riches.

Of these people, three-quarters of all the money is earned by the top 3.5%. The top 10% earn nearly 90% of the cash.


At the other end of the scale, the bottom 90% earn just over 10% of the money. The group earning between $1 and $1,000 in 2015 (that's 62.5% of the entire group) actually earned an average of just $303.

And that's their income, not their profit. That's before they paid their expenses, the phone bills, the transport costs and their electricity bills.

So yet again it's the same old story. If you want to make money from Herbalife you need to be at the top of the pyramid and all the money they earn comes directly from the people lower down that pyramid.

Do you really want to make rich people richer? That's all you do when you join Herbalife.

Sunday, 17 April 2016

The clues are there

Despite everyone’s efforts, people are still falling for a variety of scams. Not in foreign countries far away, but people here in Botswana. Our relatives, friends, colleagues and neighbours are still falling scams that are leaving them poorer and unhappier people.

A couple of weeks ago a reader contacted us saying:
“I have a friend I met when I was in South Africa. We had a chat and we exchanged numbers, and he was calling me everyday now he asked me what can he send to me I said anything. Later he sent me a receipt from Fastlink Couriers. Now I'm asking whether these things are for real or are they scammers. They called and I have been told that my parcels are in South Africa in Johannesburg and I have to clear them. I didn't give them anything I told them I will send but that I will contact you first. Please help me.”
I suspect that most people reading this will have heard the story many times before. You know this is a fairly common scam these days. We know that that there is no package, the courier company doesn’t really exist and that in most cases, even the friend doesn’t exist. The slight novelty with this case is that the friend is a real human being, someone she actually met “in the flesh”. Despite that I think it’s safe to assume that the name he gave her was false. Everything he told her about himself will have been lies.

I don’t know how far things went between them when they met in South Africa but I know of other cases where things went a lot further. Let’s say that we’re used to scammers screwing their victims financially but on these occasions they had other ways of doing so.

They’re not just scammers, they’re rapists as well.

Sadly we didn’t quite get to this case in time. She told me:
“I sent them 500 Rand and when they called for the second time then I started to have that belief that they are scammers. Till today I didn't send anything they are calling me everyday to process the payment.”
Luckily it was only R500 she lost. Subsequently they’ve asked her for payments of R1,600 and then R2,500 because they claim her parcel “has overstayed”. Unfortunately for the scammers she’s not planning ever to pay them anything again.

It’s not just conventional “advance fee” scams that are conspiring to steal your money. There are various “investment” schemes that are just as suspicious. A member of our Facebook group recently asked us about a scheme calling itself “Easy Wealth” which offered some remarkable profits. Their page claimed that for a “Donation” of R5,000 and a monthly fee of R400 the donor would experience “monthly growth” of R3,000. According to these people if you’re prepared to be offer a donation of R40,000 each month and pay the fee of R4,000 you’ll get a growth of R31,650. That’s a monthly return of 79%.


Their advertisement says:
“Saving Plan allows you to let your money grow and choose a certain amount you want available every month! contact us for more details Easywealthfnformation@gmail.com
Easywealthregister@gmail.com
whatsapp-+27627523935”
Can you spot the clues that this is a scam?

Firstly, any money-making scheme that includes the word "easy" is a scam. Making money is never “easy”, it requires either hard work or very smart investing. Secondly, any scheme that says you can have "growth" of 79% each month is a scam. Thirdly, any money-making scheme that operates from a Gmail address is a scam. Fourthly, any money-making scheme that operates from a Vodacom cellphone number is a scam.

Finally, any money-making scheme that adopts the same model as MMM Global is a scam. Like MMM Global is. Or was.

MMM Global is a classic Ponzi scheme that was created by a Russian called Sergei Mavrodi. They claim they are “a mutual fund exchange network where people provide financial help directly to each other in automated Private Offices via the internet. You Provide Help to someone else (donate) then get rewarded with 30% every month on the amount you Provide Help with (donate). You then get an opportunity to Get Help (withdraw your funds) you have Provided Help. The Power of Giving lets you receive in 23 times more than you gave to others in a year!!!”


Mavrodi isn’t new to this business. He’s already spent several years in a Russian prison for running an identical scam there. Clearly this is a vocation to him, not just a job.

Image of Mavrodi being escorted to prison in Russia c/o Mail & Guardian
Of course MMM Global is nonsense. Like “Easy Wealth”, getting returns of 23 times your investment is ridiculous and only Ponzi schemes make such claims. Schemes like Eurextrade did the same, and they survived for a couple of years before they collapsed as all Ponzi schemes eventually do.

Remember that Ponzi schemes, like pyramid schemes, always collapse when the supply of new victims dries up. Ponzi schemes rely on those new members because that’s where all the “growth” comes from. There is no real investment or growth in a Ponzi scheme, only money flowing from new members to older ones. And of course the largest proportion of the money that flows to the founders of the scheme.

The bad news for the victims that joined MMM Global is that this scheme now seems to have collapsed. Some reports say that Mavrodi is on the run again.

When you know a little about scams, the clues are obvious but the best clue of all is implausibility. If it sounds too good to be true then you can bet that it IS too good to be true. That works for advance fee scams but also any investment that offers enormous returns.

Just look out for the clues. Please. If you are ever in doubt, you know you can contact us. For free.