Saturday, 6 February 2016

MMM Global is a scam

We still haven’t learned our lesson about scams.

Despite our history of TVI Express, Success University, Karatbars, WorldVentures and, above all, Eurextrade, people in Botswana are still falling victim to pyramid and Ponzi schemes.

You’d think that after Eurxtrade in particular, when so many of our friends, family, colleagues and neighbours lost so much money, some of them even being ruined financially, that we would have been better able to resist the lies of the scammers who run these schemes. You’d think, wouldn’t you, that people would now know that the sort of claims made by the Eurextrade peddlers, of profits of “up to 2.9% daily”, are impossible. You’d think that people would know that investments typically grow slowly and steadily if you’re lucky and that enormous growth is a myth.

Well, you’d think so.

But it isn’t so.

Just this week someone alerted me to a new scheme that is doing its best to steal our money. This one is called MMM Global. Their web site makes some very grand claims about how you can make money just by joining "a community of ordinary people, selflessly helping each other".

This is how they describe themselves:
"MMM is 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!!!"
I’m not sure about you but that makes absolutely no sense to me. People offer each other money but somehow you get 30% interest and your money can be multiplied “23 times”? Does that make any sense to you?

Here is a time for an old rule. If it seems to good to be true then it certainly IS too good to be true. MMM Global shows all the signs.

I texted someone involved in the scheme asking them where the money came from and within moments I was brought into a WhatsApp group chat with over 100 other proponents of the scheme as well as victims. One of the advocates of the scheme explained it this way:
"Your Rands are converted to MAVRO when you request to Provide Help, so the growth rate is generated by the system on your MAVROS. MAVRO is a help index which grows by 30% per month, named by famous Sergey Mavrodi, founder of the MMM Community. 1 MAVRO = 1 Rand."
So this guy Mavrodi has invented a new currency that magically increases in value by 30% every month? I asked how and things got even more complicated. Nobody could explain where this 30% came from. I asked several times if it came from investments or simply came from the contributions made by new people joining the scheme but all I got was more gibberish. Then something curious happened. Various members of the group, who it later emerged were new recruits, said a few interesting things that I think showed the truth about this scheme. One said “When more people join it means more money in the pool.” Another said, trying to explain the source of the money, said that it came from “the money flowing in”.

That’s when the more senior members of the scheme became VERY angry, shutting down the comments from the newcomers but still not explaining where those 30% per month profits come from. Nor could they explain the suggestion that you get take out 23 times more than you put in.

Clearly this is a Ponzi scheme, no different to other schemes like Eurextrade. The money that some people receive is just coming from the money paid by later joiners. There are no profits at all, just money flowing from one victim to another and a crook running the whole operation somewhere.

And there certainly is a crook here. Remember what I was told about the “famous Sergey Mavrodi, founder of the MMM Community”? He is indeed famous. But not for inventing a new currency.

His page on Wikipedia describes him as “a Russian criminal and a former deputy of the State Duma. He is the founder of the МММ series of pyramid schemes. In 2007 Sergei Mavrodi was found guilty in a Russian court of defrauding 10,000 investors out of 110 million rubles ($4.3 million).”

Of course just because someone was previously convicted of running a scam and defrauding thousands of people of their life savings, that doesn’t mean he’s doing it now. Maybe he’s a reformed character. Maybe he’s now a good guy.

Yes, maybe but almost certainly not. Would you lend money to someone who stole from your distant cousins in the past? Would you take that risk? You’d be mad to do so.

The good news is that there has been some action in South Africa to put an end to the abuse MMM offers its victims. Capitec Bank have recently started freezing bank accounts they suspect are being used in the scam apparently with the cooperation of the South African National Consumer Commission and the Reserve Bank. Maybe the authorities should consider doing so here as well?

They certainly need to. The MMM South African “Changing the World Team” are currently advertising a function on the 20th February at Yarona Country Lodge in Mogoditshane where I’m sure they’ll be doing their best to persuade people of the riches that can be made by joining the scheme.

Do you think they’ll be mentioning the mysterious source of the promised profits or the criminal past of its founder?

The Voice - Consumer's Voice

How do I get my refund?

I entered into a contract with a company to provide me with a wedding tent for my wedding on 19th and 26th December 2015. I paid them P12,500 and P6,500 for the two occasions. Unfortunately the company failed to provide the service for the first event only providing the tent and chairs with no items listed on the contract and catered for 150 guests instead of the 200 guests that we paid for. The lady who is managing the company switched off the phone as from the 18th December and only came to apologise to us on the 20th December with no explanation as to why she did not provide us with the service we requested.

We entered into an agreement (written and signed) to the effect that she will refund us part of the fees we paid for due to her failure to provide the service. She paid an amount of P5,500 and as per our agreement the contract to provide service at the second event was cancelled forthwith and she promised to refund the deposit of P6,500 to be paid before the 31st December. The lady started to ignore my calls when I tried to inquire about my refund and when I finally contacted her she requested for 10 days to look for money which I did approve. After 10 days (which elapsed on the 18th January) the lady started to ignore my calls and my efforts to send her numerous messages to request my refund proved futile up to now.

I have given up on her and I am thinking of seeking legal action against her. Please assist me on what to do to get my refund back. I have a proof of all the receipts for payments, the contract and Memorandum of agreement signed by me and her together with our witnesses.

I’m not sure you really need my help, do you?

You’ve already done everything I would have suggested and the only thing left is to follow through with your threat to take her to court. You’re lucky that the amount in question is well within the limits of the Small Claims Court. I suggest you go to them as soon as you can, show them all the paperwork you have and seek an order from them for the outstanding money she owes you.

Meanwhile again I have to ask the same question that I ask so often. What is it with the wedding industry? Why is it so full of crooks and incompetents? Why do they not seem to care about their customers’ special days?

Is this a real job?

I was in contact with a woman from the USA who I met in Mozambique at a meeting last year. Then I hinted I was looking for job and she indicated she will assist. In January 2016, I received an email, supposedly from her saying I should email my CV to her and the HR office of Valero Energy Corporation. I did that and someone from supposedly Varelo sent an Employment Application form which I completed on 28th January. The next day I received a letter of offer from supposedly Valero.

My sixth sense then indicated all is not rosy, as this might be a scam, but it does not follow the description of scams. My suspicion is based on the following. First the names of the people I dealt with kept changing. I was offered a post of Assistant General Manager initially but upon offer I am offered one of a Project General Manager. The last straw was I am to pay a visa of US$550, where I suspect the catch is. The agent given is a Norman Weed. I did speak to him and he sounded elderly, he claimed to have received a copy of my appointment from Valero.

Please help me verify.

Your suspicions are 100% correct. This is undoubtedly a recruitment scam. There is no job here, no offer, no magnificent salary. The only genuine thing is the money they want you to send them.

You’ve mentioned some of the clues, but there’s another big clue that this isn’t a genuine job offer.

Real companies offer real jobs to real candidates only after they’ve done a real face-to-face interview. These days you can do interviews online using technologies like Skype but there is always, ALWAYS some form of face-to-face interview before someone is offered a real, senior-level job. Always.

And companies don’t ever charge their recruits to be hired. Even if they did they wouldn’t demand that the money was paid using money transfer services like in the demand you sent me. There’s one last clue. Valero, a real oil company have posted a warning on their web site saying all of this as well. Just delete the emails and don’t ever respond to them, no matter what these crooks do to entice you.

Sunday, 31 January 2016

MMM Global - Mail and Guardian article

See here for an article on the MMM Global Ponzi scheme from South Africa's Mail and Guardian last year.
"A convicted fraudster is separating gullible South Africans from their money in a scheme with its very own seductive liberation ideology."
Here's a rather unflattering photo of Sergei Mavrodi, the founder of MMM Global, going to prison for his last scam.

Image c/o Mail and Guardian

Friday, 29 January 2016

Banks. Listen!

You really should listen to your customers. Your customers will tell you everything you need to know about how to make your company more profitable. What do they like about your organisation and the products you offer? Why do they keep on coming back to you? What stops them choosing another bank rather than yours?

Even people who aren’t your customers can offer you fantastic information on what you should do to attract them. Why don’t they come to your bank. Is it the location? Is it your charges? Is it your miserable staff? Is it you?

You don’t have to do ask these questions yourself if you’re not sure how to go about it. That’s what market research companies do for a living. I’m sure you can find one that will help you ask the right questions or you could just do it yourself. Stand at the entrance to your bank and ask customers as they leave how their experience was today. Ask them frankly why they came to your bank rather than anyone else’s. Ask how friendly your staff were. Ask them what you could do to make them happier in future. It’s not rocket science.

A few days ago we did a hugely unscientific survey on Facebook, asking people to comment on what they thought about their bank. In fact what I asked was for people to describe their bank using only one word. Yes, of course that’s a very crude measure because as we all know the quality of an organisation can’t be judged by just one word. Service is much more complicated than that. Service is multi-factoral. The service might be fast but unfriendly. It might be friendly but unhelpful. It might be helpful but not relevant to your needs. Service is complicated and using one word to summarise an entire company is therefore a bit silly.

But sometimes silly can be good.

This survey was also unscientific because the people commenting were Facebook users and they are a very strange group who are certainly not representative of the general population. Another reason it’s not a reliable survey is that the people who commented are likely either to be particularly happy or particularly unhappy with their bank. People who have no real feelings are much less likely to comment. In other words the people who commented in this silly survey were extremists.

But anyway, what were the results? What did people think?

This is how it worked. I went through the thousand comments we received (yes a thousand) and divided them into three categories: good or positive words, bad or negative words or those that were neutral or ambiguous.

The bad news for banks is that only a third of people, 34% to be exact, were prepared to say something good about their bank. They used words like “excellent”, “innovative”, “best”, “awesome” and “convenient” but I quickly noticed something I thought was curious. For the larger banks my impression was that people were often commenting on innovations the bank offered such as their technology but with the smaller banks they seemed to be commenting on the quality of service. I suspect that’s most people experience. The smaller banks tend to be friendlier, the larger ones more advanced technologically.

As predicted, a small proportion, just one in ten, were in the neutral camp. These were the people with either no strong opinion (“Ok” and “fair”) or who had mixed feelings (“Super technology, appalling service”).

The bad news is that more than half of all the people, 55% of them, could only find bad things to say about their bank. Some of the comments were reasonably expressed such as “inconvenient”, “Queues!”, “crowded”, “terrible” and “expensive” but others were more impassioned. They said things like “nightmare”, “thieves!”, “idiots” and “cheats” and those were just the polite comments that Mmegi could print.

Yet again I stress that these “findings” are not scientifically based. They are not necessarily a true reflection of how people feel about their bank. Having repeated that, here’s something important.

I think they ARE true.

I think this is how people really DO feel about their banks. I suspect this because I ask people this all the time. Many times when I meet people I ask them who they bank with and what they feel about the quality of service they get and those proportions our survey found are roughly what I hear from people. About a third are happy, a handful are neutral and about half are really, really pissed off.

I also think that the observation that bigger banks survive because of good technology and the smaller one do so because of better service is probably correct as well. The challenge to both big and small banks is to try and create an organisation that has both: fantastic, innovative, useful technology but with staff in the branches and the call centers that appear to enjoy dealing with customers.

Unfortunately, the pessimist in me suspects that what we’d get is big bank service and small bank technology. Why can’t it be different? Which bank is going to have the courage to invest in becoming truly better? Which bank has the backbone to dare to be different, to be the bank that stands out from the crowd of other banks, to be the bank that will be eccentric but wildly successful.

Finally, there’s some slightly good news. We asked exactly the same question this time last year and performed the same analysis. How do banks in 2016 compare with 2015?

The good scores haven’t changed. What changed was that a noticeable proportion of people seem to have moved from bad to neutral comments. To put it simply, the banks don’t seem to be getting better, they’re just getting a little bit less bad.

The Voice - Consumer's Voice

My laptop broke!

On the June this year, I bought a laptop but after six months the laptop does not work. I plugged the laptop directly to the power socket without the battery in it because it was 100% fully charged (I didn’t want to damage the battery) by then I was watching a movie when until suddenly there was a power cut and that was the end of life of my laptop. It has a warranty of 1 year, so I brought it to their warehouse to fix. But unfortunately they said people who are responsible for fixing laptops were off duty due to holidays. I really need the laptop now because it got my school work stuff there.

Can I lend it to vendors who can fix? I need your advice on this because I got tests soon!

I’m confused. I don’t know of any reason why you would want to remove the battery from your laptop. As far as I’m aware there is no particular risk of damage to the laptop battery by leaving it in. I suspect you run a greater risk of damage with it removed. I think it’s likely that if the battery had been inserted the power cut would have had no effect on your computer at all.

Nevertheless, unless there is some evidence that you mistreated or damaged the laptop yourself the warranty should still apply to the device. I can understand that people need to take a break but that has no relevance to a customer who needs a warranty repair.

We contacted the store where you bought the laptop and they mentioned that you had removed the battery and they thought this might have contributed somehow to the device failing if there had been a power surge. However, the Managing Director emailed us saying “because of his need to use it for studies, I will arrange a replacement”. I don’t think you can ask for better than that.

Where’s my wedding video?
I write this letter on behalf of a client, who I believe was given a raw deal by yet another service provider. This client engaged my company for tenting and décor services for an event in March 2014. At a later date she enlisted my help to identify a company to provide video services. The company and I did not get to meet in person before the event but we agreed over the phone and the fact that he had been highly recommended by a friend was to me guarantee enough. Sure enough, they turned up and at the end of the day, having received a 50% deposit from our client he pledged to have the video ready for collection 10 days after the event, which fell in the first week of April 2014. I phoned to make an appointment for my client and me to go and view the video and pay the remaining 50% and get the product. In response, he said he was away from base but would not be drawn to proposing a date that was workable for him. He curtly said he was in the middle of something before ending the call.

A week on I phoned again and he has not taken my calls since. I then enlisted the help of the friend that had connected us and when he came back to me he said the guy told him that he has since delivered the video tape to the client but this is not so. I have in my possession proof that the client paid up a deposit and write to ask for advice on how to advance in this matter.

Your client needs to get moving on this matter quickly. If you doesn’t she might be too late. My understanding of the law is sketchy but if your friend waits much longer they might find that the debt is “prescribed” which means that it’s so old that a court might not hear it. I believe that the period for a debt like this is three years. If she doesn’t get her money or start action against him in the next twelve months she might lose out completely.

I suggest that she writes him a letter demanding either the completed video or a full refund within 14 days. She should make it very clear that if he fails to do either she’ll immediately take legal action against him. It’s very important that she sticks to this threat and then immediately gets herself to the Small Claims Court for an order against him.

You should also send us his contact details so we can contact him as well. Maybe between us we’ll encourage him to do the decent thing?

Finally, what is it about the people who offer wedding services that results in so many of them being crooks? You seem like one of the decent ones, going out of your way to support your client and I celebrate you for your efforts. You set an example to your colleagues in the industry!

Wednesday, 27 January 2016

Consumer Alert: MMM Global

News is emerging from South Africa of the freezing of bank accounts connected to a scheme calling itself MMM Global.

Their web site makes some very grand claims about how you can make money just by joining "a community of ordinary people, selflessly helping each other".

This was how their online chat person described the business model to me earlier today:
"MMM is 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!!!"
However they were unable to describe how exactly the money paid into the scheme grew, other than by saying things like this:
"Your Rands are converted to MAVRO when you request to Provide Help, so the growth rate is generated by the system on your MAVROS. MAVRO is a help index which grows by 30% per month, named by famous Sergey Mavrodi, founder of the MMM Community. 1 MAVRO = 1 Rand."
No, I don't know what a MAVRO is either.

Then I asked if the money grows just because more and more people are joining and increasing the amount of MAVROs?

I got a confession.
Image c/o Wikipedia
"Yes, that too! Hence the money flowing in and out comment above!"
So now it's clear. MMM Global is indeed a Ponzi scheme and possibly a pyramid scheme as well. The money you pay in goes towards the people who joined before you.

Well, some of it does. Where does the rest go? That's easy. It goes to this guy, Sergei Mavrodi, the founder of MMM Global and a convicted fraudster with a history of such criminal schemes.

But it this even relevant to us in Botswana? It looks like the scam is  being closed down in South Africa so why should we worry?

Because it's still here.

This was sent to me today.

You've been warned. It's a scam run by a criminal. Is that where you want to put your money?

Monday, 25 January 2016

2016 Banking Survey - 1st results

We conducted our Very Unscientific Banking Survey last week on Facebook.

We called it "Very Unscientific" because that's what it was. Not even slightly scientific.

We asked people to describe their feelings about their bank "using only one word". Then we counted the 1,000 responses and divided them into three categories: good comments, neutral ones and then the bad comments.

Yes, it's not very scientific but it offers some clues. Here are three of them.

Firstly, people aren't exactly thrilled with their banks.

And then there was something else I noticed.

Many of the positive comments made about the larger banks referred to the technology but when people said good things about smaller banks they seemed more likely to mention the quality of service. I think that's plausible. The big banks rely on their technology but the smaller banks are better at service. Does that seem possible to you?

And finally. Are things getting better or worse?

When you compare these results to those from last year it's very simple. The proportion who made good comments hasn't changed. What HAS changed is the proportion saying bad things. It's gone down from 62% to 55% and almost all of them have moved to the neutral category. The observation is actually simple.

Banks in Botswana aren't getting better, they're just becoming a little less bad. And it's 1,000 people saying this.

So believe it.