Friday, 7 February 2014

Judge not

Judge not, that ye be not judged.

One the very rare occasions that I quote the Bible it has to be the King James Version. The lesson (one that many self-appointed prophets, pastors and moral leaders would do well themselves to consider) is that unless you occupy the moral high-ground you are not in a position to judge others.

When it comes to consumer issues, that’s nonsense. In fact I’d modify the teaching to say “Judge, for it is thy sole protection.”

As consumers, not only are we entitled to judge, I maintain that we absolutely MUST judge people offering to sell us things.

I think you can even take it a bit further. You can judge organizations by the people that represent them.

A few years ago a bank approached us asking to take a look at the way their products were being sold. They had decided that rather than relying on their own salaried staff to sell their products, they had invited independent, self-employed individuals to sell their products on a freelance basis. They got no salary, no expenses, just a commission on every product they sold. That’s not in itself a bad idea, it certainly provides a good incentive to people to work hard. The problem is that it was beginning to go wrong. The independent agents were telling lies, making false promises and acting in a generally shady way. They were inviting potential customers to meet in car parks, on street corners and, if they were lucky, in chicken restaurants. Customers were seeing the agents, and therefore the bank they represented, as a bit like drug dealers. Needless to say the bank swiftly changed the way their products were sold, realizing in time that their image was being ruined. People were exercising their right to judge the bank badly.

Just like it’s reasonable to judge multi-level marketing schemes by the way their independent operators sell the business and the claims they make. Firstly they all make the suggestion that joining these schemes is a good way of making lots of money, so long as you work hard. In fact the opposite is true. Almost everyone who joins a multi-level marketing scheme (and some estimates say as many as 99%) makes no real money from doing so. But that’s not what the people busily recruiting will tell you. What they also often do is make some extraordinary claims. I’ve heard from Herbalife distributors in the past who claimed that they have products that can “help with reversing heart conditions”, can help treat prostate cancer and can even improve the CD4 count of someone suffering from AIDS.

To their credit Herbalife were furious about this, presumably because they saw that their reputation was going to be judged by these charlatans.

I’ve also spoken to victims and potential victims of the Eurextrade Ponzi scheme that collapsed almost a year ago. They also had suspicions based on how it was sold to them. They were being approached in shopping malls, in restaurants while waiting for takeaways and at their workplace. They wondered (correctly it turned out) whether this was how a reputable business would operate. Luckily a few of these people were skeptical enough to run away screaming at this point. Unfortunately many people were so blinded by greed that they ignored their skeptical better nature. If more people had been courageous enough to judge Eurextrade by the way it operated they wouldn’t be so poor right now.

You get exactly the same thing with all the other Get Rich Quick schemes. At the moment there’s a scheme going round called Karatbars. This is a German-based scheme that involves buying tiny quantities of gold, supposedly as an investment. The irony is that this is probably the very worst time to buy gold in recent years. The gold price has dropped from over $1,700 to less than $1,300 in the last year. Why would you want to invest in something that is dropping in price? You don’t have to be an investment specialist to know that’s just silly.

However you can also judge Karatbars by the way their local representatives operate. One of the reps are going around the country saying that “it has been approved by [the German] embassy, BURS, Dept of Mines and (sit down before reading this) Consumer Watchdog.” Another posted at length on Facebook. He said:
“To check if its not fake we visited the Germany Embassy and they gave us the green light that its registered in Gemany. We have a letter from the Germany Embassy. We will show it to you ka Saturday. Because the company trades in Gold we went to the department of mines, they gave us the green light. We then went to BURS. They also gave us the green light. The doubting thomases then went to consumer watch dog. They also gave us a thumbs up.”
I called the German Embassy and they confirmed that all they ever did was confirm that Karatbars is a company registered in Germany. They certainly didn’t “approve” Karatbars. BURS also told me that they never endorse or give companies “the green light”. They just collect taxes.

Finally let me make this perfectly clear. Consumer Watchdog does NOT approve of, endorse, support or even like Karatbars. Karatbars is an incredibly bad investment and, what’s more, is probably a pyramid scheme. Their sales material makes it very clear that you can recruit multiple layers of people beneath you and implies you can make loads of money by doing so. That’s why we urge you to show anyone from Karatbars the door, or your middle finger. It’s all they deserve, given that their representatives are telling lies.

We are entitled to judge them because of this, just like every other company that operates on deception.

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