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

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!

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.

"Yes, that too! Hence the money flowing in and out comment above!"

Source: Thesheet.ng

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?

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.

More rules for 2016

Last week I shared some of the “new rules for 2016” that members of our Facebook group had proposed. These were meant to be the rules that any company wanting to operate in 2016 should abide by if they want to succeed.

The list began with the rule that all coffee shops must offer free, reasonably fast, uncapped WiFi. Really, in 2016 that should be the norm, frankly it’s outdated for any such pace not to offer it. It’s also outdated and bad business sense to force customer to have a different password every day or to limit how much they can download. It’s 2016, it’s fundamental.

Our members also wanted a national ban on the phrase “the system is down” particularly from government departments and parastatals. I agree. The time has come, particularly in a country that’s experiencing a power crisis for companies that rely on technology and networks to offer services not to invest in uninterruptible power supplies for their systems. And their networks. We have a power crisis so businesses have a choice. They can be moaning cry-babies or they can make a plan and spend some money insuring availability of your systems. Come on, it’s 2016.

Then there were two suggestions about shopping centers. Firstly, regardless of the national water shortage, the toilets in shopping centers must be open and working. Again it’ll cost some money but I think we have a right to expect the centers to invest in storage tanks even if they just use grey water to flush the toilets. It’s unhygienic and very bad customer service not to offer toilet facilities.

They also need to start actively policing their car parks to prevent the onslaught of able-bodied scumbags who insist on bribing security guards to allow them to park in the disabled bays. In 2016 this has to stop. Are we a caring and compassionate nation? Really? Then we need to demonstrate that.

Perhaps the most newsworthy suggestion was that “In 2016 consumers must expect supermarkets to adopt a code that says that, the price at the shelf is what the consumer pays.” Luckily the Consumer Protection Regulations already give us that protection, even though some stores often seem to overlook it.

Section 13 (1) (e) of the Consumer Protection Regulations forbids "the advertisement or representation of a commodity or service [...] with the intent not to dispose of the commodity or service as advertised or represented". If it’s advertised for sale for a price expressed in Rand, then we’re entitled to pay that. What’s more, remember that the Ministry of Trade and Industry said just before Christmas that they’d noticed that “some businesses, especially chain-stores, are displaying their merchandise in other currencies especially the Rand, instead of Pula”. They went on to say that:

“This is (an) unfair trade practice whereby the Pula/ Rand exchange rate differential is not passed onto the consumer. Therefore businesses that are practicing this are advised to stop forthwith and failure to do so may result in their trade licenses being reviewed, which may lead to their suspension or cancellation” and advised the public “not to accept paying for merchandise that is priced in the Rand or any foreign currency other than the Pula.”

Another member of the group repeated a common complaint we see about banks, saying “consumers must expect better service in banks including provision of rest rooms (toilets)”.

Every time we’ve asked banks about this they’ve responded with the same story. It’s about security. Their fear is that if they offered toilets inside the bank a criminal could use them to change clothing, put on a mask or pick up a weapon hidden by a previous visitor and then rob the bank. All of those concerns are reasonable but surely there are ways to offer customers what they want but still maintain the high level of security needed in a bank? What about a portable toilet outside the branch? What about restrooms in the reception area before the security checkpoint? What about being creative rather than just saying No? In 2016 I don’t think it’s too much to ask.

Several members of our Facebook group made suggestions that weren’t critical of the companies serving us, but were critical of consumers instead.

One said “consumers are expected to read the fine print on contracts”. I can’t agree more strongly.

We hear all the time from consumers who got into trouble because they didn’t read and understand the agreements they signed. Most times it’s a hire purchase agreement but it’s also common with insurance schemes. They sign the agreement often without reading it at all or, just as dangerously, without making sure they understand every single part of the agreement. That’s at least part of the reason they later get into trouble when things go wrong.

If they’d read the agreement they might have seen the clause that tells them that until they’ve paid the final instalment the goods are still the property of the store and the store is therefore entitled to visit their house at any time if they fall behind with their repayments and repossess the goods. No court order, no deputy sheriff, no formalities, just some guys in a bakkie.

Better still, I’d hope that anyone reading the agreement would think twice before signing and instead would run away screaming, thanking themselves for taking the time to realise before signing it that it was likely to ruin them financially.

What are your new rules for 2016? What do you want stores (and consumers) to do differently this year? It should be more than just smiling and greeting us, what tangible things should a store do that would encourage you to hand over your money? Join our Facebook group and share your ideas with the thousands of other people ahead of you.

The Voice - Consumer's Voice

An iPhone with no charger?

My husband got me an iPhone 4 as a birthday gift on the 7th January but the phone didn’t have a charger but a power bank thing and there was no earpiece.

On 11th January we travelled from Gumare where we stay to Maun and enquired about the unavailable accessories. The guy told us that they bought the phone like that from their supplier in South Africa, I told him that even the cheapest phone comes with those basic accessories and how come an expensive one could be sold without those basic accessories. After a long argument he gave me a Samsung earpiece which I refused to take, he sent me with his shop assistant to an opposite phone shop, saying they will give me an iPhone earpiece.

When I got there I explained what am looking for to the man, he told me the power bank is for the iPhone and I informed him that if was originally for the iPhone, it could be written iPhone, he then went to the store room, brought an open box with an iPhone 6 with a charger only and I told him that’s how an iPhone box and charger looks like, he said its because its iPhone 6 unlike mine which is an iPhone 4.

He then told me that he can only give a Samsung earpiece and nothing else. I told them that at some point, sooner the power bank given will be dead unlike if it was an original iPhone charger. What can I do?

You can take the phone back and demand a full refund and if the store give you any trouble we’ll call in the authorities. The absence of a charger and earphones means we can assume safely that this is a second-hand phone. Apple haven’t been selling the iPhone 4 for a long time now so I can’t see how a store could still have new ones in stock. As an iPhone user myself I can tell you clearly that EVERY genuine, new Apple phone comes with a charging cable, adaptor and earphones. They should also know that the iPhone 4 and 6 use completely different cables so why they were offering you an iPhone 6 cable is a mystery.

We called the store and said we assumed they’d know that the Consumer Protection Regulations specifically forbid stores from claiming that a “commodity is new when in fact it has deteriorated, or it has been altered, reconditioned, used or is second hand”. That’s when they admitted that the phone was “reconditioned” but they could do nothing to help you until the manager returned.

I think you should go back to the store and explain all of this to them. Explain that they are already in trouble with us and they soon will be with the Ministry of Trade and Industry. And here’s another thing. Look a the receipt they gave you. They have a VAT number but didn’t charge your husband VAT. Looks like they’re in trouble with BURS as well!

Do we know Three Link Connection?

Hello I would like to find out about a certain South African Company called Three Link Connection and they say that they triple someone money in just three weeks time which is something I think is too good to be true, do you know about these guys?

Oh yes, we know them very well indeed! They’re crooks.

We dealt with their victims several times in 2012 and 2013. Three Link Connection had made a range of amazing promises, telling them that they could treble their investments by buying cheap products in China and selling here in southern African for enormous profits. Unfortunately this was all lies. We heard from at least twenty people who had “invested” tens of thousands of Pula but had seen nothing back from them other than excuses and offers of more profits if only they’d hand over more money. Tragically many people did exactly that, throwing “good money after bad”.

I eventually traced the founder of this scam, Daisy Mogale, who had been prosecuted in SA for a previous scam she operated and she made it very clear how much contempt she had for her victims in Botswana. Once she stopped shouting at me down the phone and demanding to know who gave me her cellphone number she gave me her reaction to the complaints we’d received. “They’re all liars! All of them in Botswana are liars!” she told me.

Please don’t waste your money with these crooks, you’ll never see it again.

New rules for 2016

I posted a question in the Consumer Watchdog Facebook group a few days ago asking for suggestions for new customer service rules for 2016. They all were to begin with "In 2016 consumers must expect..." and be no more than 20 words in length.

Within six hours we had over fifty suggestions.

I started the discussion with one of my favourites, not actually a new idea but one that I think is becoming more and more important for certain businesses.

“In 2016 customers must expect free, reasonably fast, uncapped WiFi in coffee shops and hotels.”

Whether they like it or not, the nature of coffee shops and hotels has changed over the last few years. Yes, they remain places for people to drink coffee and stay overnight but they are increasingly becoming the preferred location for business meetings. I know coffee shops are for me. I can invite customers and colleagues to my remarkably comfortable and welcoming office (yes, it really is) but sometimes it’s nice to have the discussion somewhere different and convenient. It’s also nice just to go out with the laptop occasionally to write emails and reports somewhere the phone isn’t always ringing and colleagues aren’t bothering you with trivia.

In 2016, WiFi for these people is an essential tool. Yes, some of them will be on Facebook playing silly games but a lot of them will be picking up and sending emails, collaborating online and running their businesses. It’s remarkable that there are still some coffee shops who either have no WiFi or have ridiculous limits on capacity and speed. It’s 2016.

Another technological demand was “In 2016 the phrase ‘system is down’ should be banned especially in most government departments.”

I agree. It’s 2016 and it’s about time that everyone knew that there is no such thing as a computer error, there are only human errors. The fact that a business system is not available means, without exception, that somewhere along the line a human being has screwed up. In 2016 we have a right to expect that companies invest in uninterruptible power supplies for their expensive servers but also for the computers in remote offices and even for the networks that connect them. We have a right not to be bothered with feeble excuses about systems or networks being down. Even in Botswana, with our climatic and geographical challenges, it doesn’t matter whether it a bank, an insurance company or the public services, we have a right to expect the systems to be up rather than down.

Another member of the group suggested that “In 2016 consumers must expect clean functioning wcs with tissue paper and sanitary bins” and I agree with that as well. Of course we all understand that our nation is facing a terrible water shortage but that’s what storage tanks are for. That’s why shopping malls and stores should be investing in large tanks and suitable plumbing to keep the bathrooms operating. If it means they need to invest in grey water systems for the toilets and keep reserves of potable water for drinking and washing then so be it. We know they’ll just increase rents to cover it but you know what? We’re prepared to pay an extra thebe on everything we buy if it means we can use your toilet when we’re visiting your shopping center.

Others raised an issue that really should be a national embarrassment: the way we treat the disabled. One demanded that there must be “clear provision of special service to the elderly and individuals with disabilities” and another commented that “parking designated to people with disabilities should be used as intended and if not so the authorities must take action”. How come we allow the shameful abuse of disabled parking bays by the obviously able-bodied? Why is it that we all often see perfectly capable people getting out of their flashy vehicles that they just parked in the disabled bays? Why do we permit that? Yes, we all know that they’ve just bribed the security guard but how do we as a fair-minded society accept that? It’s a constant surprise to me that more of these vehicles are vandalized by outraged (and obviously criminal) passers by.

One of the most important suggestions was another old one. “In 2016 consumers must expect supermarkets to adopt a code that says that, the price at the shelf is what the consumer pays.”

It’s not just supermarkets, it’s all stores. The price displayed on the shelf must be the price you pay at the checkout. No excuses. It even goes for Rand prices. But we don’t need a “code” when we have one already. Section 13 (1) (e) of the Consumer Protection Regulations forbids "the advertisement or representation of a commodity or service [...] with the intent not to dispose of the commodity or service as advertised or represented". If it’s advertised for sale for a price expressed in Rand, then we’re entitled to pay that. What’s more, remember that the Ministry of Trade and Industry said just before Christmas that they’d noticed that “some businesses, especially chain-stores, are displaying their merchandise in other currencies especially the Rand, instead of Pula”. They went on to say that:

“This is (an) unfair trade practice whereby the Pula/ Rand exchange rate differential is not passed onto the consumer. Therefore businesses that are practicing this are advised to stop forthwith and failure to do so may result in their trade licenses being reviewed, which may lead to their suspension or cancellation” and advised the public “not to accept paying for merchandise that is priced in the Rand or any foreign currency other than the Pula.”

So already things in 2016 are a little different. Let’s hope we can change some of the others as well.

The Voice - Consumer's Voice

Is this a fair practice?

There is a filling station at Mogoditshane where I recently went there to fill up my car with petrol. I told the attendant that I want to fill up and will use my bank card to pay. He said he had to swipe first but as I was not sure of the amount to fill up I told him to swipe P400. The car was filled up by P350 and instead of them giving me P50 change they said I have to buy something of that amount from their shop as they can’t give me my P50 change! Is this a fair practice?

It most certainly is NOT!

The filling station hasn't done anything illegal, you approved the P400 transaction in good faith and they took the money likewise but this is an utterly ridiculous way to do business. Like many other people reading this I’ve sometimes paid for petrol using my debit card and I’ve NEVER been asked to pay up front, presumably because of exactly the same situation you describe. How can they be sure how much petrol the car will take?

Some might say it’s because they’re worried you won’t be able to pay, perhaps the payment will be declined and then what will they do? But isn’t that exactly the same situation they have when people pay using cash? Do they ever ask to see your cash before filling your tank? Of course not.

We’ll get in touch with the management of the filling station chain and see what they say about this ridiculous and insulting procedure. I’m sure they’ll be as shocked as I am.

Can I cancel the deal?

I am writing this email requesting that you help me get my deposit back from a store in Mochudi since they have failed to deliver. I bought a bed from them on the 9th December 2015 through their easy payment terms of 5 months period.

I deposited P1100 and paid extra P200 for delivery. I was then told that delivery will be made in the following week but up to now it has not happened. At some point before Xmas I called the owner and she informed me that she will be going for stock in RSA on the Friday of 18th Dec and will deliver after that, something that really shocked me as I was never told that the bed was out of stock when I made the decision to buy. Nevertheless, I was promised that delivery will be made on the Saturday of the 19th but still did not materialise.

I tried to call the owner as well as the assistant in the week that followed but they never answered my calls nor returned them. I have been trying to call them again since after the holidays but the owner's phone is not going thru and the shop assistant is not offering any solution. Please help.

This store has let you completely down.

Firstly they should have told you before you handed over the deposit that they didn’t have any beds in stock. They breached of Section 13 (1) (e) of the Consumer Protection Regulations when they “represented” that the bed was available when in fact it was not.

I suggest that you write them a letter formally cancelling your order and stating that you no longer want the bed as they neglected to warn you of the delay in delivering it. Make it clear to them in the letter that the deal is cancelled completely. Then tell them that they have 14 days to give you a full refund of the deposit and the delivery charge. Let them know that if they fail to give you the money that you will take any necessary legal action against them. You might want to tell them that you sought the advice of Consumer Watchdog and The Voice about this.

If this fails to persuade them, then you should go directly to the Small Claims Court with all the paperwork and ask for an order against the store for the money they owe you.

It’s also critically important to tell all your family or whoever you live with that if the store tries to deliver the bed now that anyone at the house must refuse to accept delivery. Make it clear that they must NOT put their name on anything the delivery guys might ask them to sign.

A late Christmas present

You might not have seen it but the consumers of Botswana were given a Christmas present late in December. Not everyone knows about it yet but it’s a good one. Ok, it’s not like a new laptop or an iPad but it might end up being more valuable.

Almost all of us have seen examples of overpriced goods in stores in Botswana belonging to South African chains. Just over a year ago we looked at one store which was well known for what seemed like an abusive pricing policy in Botswana.

This chain would simply import products from South Africa with a label showing the price in Rand and then put another label on top with a new price in Pula. All it took was to peel off the Pula label and compare it with the Rand price to establish that the prices were being significantly marked up. For example one item we found was marked for sale in SA for R28.99 but was labeled here for P31.80. When we looked at the exchange rates at the time the markup was over 20%. Other products had a mark-up of closer to 40%. We found one item that was marked as being on a 2-for-1 sale in South Africa but when we bought two here in Botswana we were charged for them separately. When you did the maths for that purchase, the current exchange rate and the absence of the special offer in Botswana the markup was over 50%.

Following some considerable pressure from consumers that store changed its policy slightly. Instead of those fantastic markups they adopted a new approach. One-to-one pricing. If something was for sale in South Africa for R50 they’d re-label here in Botswana at P50. Same number, different currency.

This is still abusive. Given the current exchange rate and even taking into account the fact that many foodstuffs in South Africa are exempt from VAT, the difference isn’t sustainable. Yes, it’s possible that it costs a little more to transport food to Botswana compared to South African but if that’s the case why don’t prices vary within South Africa? I don’t see higher prices in Polokwane than in Pretoria, do you?

Some have suggested that there are special levies and taxes to pay when stores import foods but are you aware of them? I’m certainly not. If they exist perhaps the stores should tell us about them so we can understand their plight.

Others have told us that costs in Botswana are higher, that store staff demand higher wages, that power and water are more expensive and that the air we breathe somehow makes the prices higher here.

So here’s a question. How come, if all of this is true, that some stores charge the same price in Botswana as they do in SA? How come these stores, as one MD told me, take the Rand:Pula exchange rate and do a direct adjustment so that something costing R50 in SA is priced at about P40 here? If they can do it, how come other stores aren’t doing it? How come in the last few days alone members of our Facebook group have sent us the following examples of comparative prices:

R89.95 – P89.95
R119.95 – P119.95
R29.95 – P34.95
R249.95 – P279.99

What does the law say about pricing in Rands? Very little. In fact it's not illegal to sell things in Rand in Botswana. The Bank of Botswana confirmed that to us earlier this year, saying that "in accordance with Section 30 of the Bank of Botswana Act, traders are permitted to exchange goods for currency acceptable to them" and that it is "not unlawful for customers to offer to pay for goods and/or services using foreign currency provided they both agree to the terms of the sale". They said that the choice of currency is "a private matter between the seller and the buyer".

But try offering to pay in Rand and see how far you get.

However, Section 13 (1) (e) of the Consumer Protection Regulations says that "the advertisement or representation of a commodity or service [...] with the intent not to dispose of the commodity or service as advertised or represented" is forbidden.

So here comes the Christmas present. Alongside all the Consumer Protection Regulations that we’ve grown to know Section 17 (1) (j) says that “any other method, act or practice” is forbidden once the Ministry declares it to be “an unfair business practice under this regulation”. In other words the Ministry can receive complaints and then rule a specific practice is now forbidden.

In a press release on 23rd December the Ministry of Trade and Industry did exactly that when it said that

“it has established that some businesses, especially chain-stores, are displaying their merchandise in other currencies especially the Rand, instead of Pula.”

It went on:

“This is (an) unfair trade practice whereby the Pula/ Rand exchange rate differential is not passed onto the consumer. Therefore businesses that are practicing this are advised to stop forthwith and failure to do so may result in their trade licenses being reviewed, which may lead to their suspension or cancellation” and advised the public “not to accept paying for merchandise that is priced in the Rand or any foreign currency other than the Pula.”

So no argument any longer. Stores in Botswana, whether they like it or not, are obliged to pass on the exchange rate benefit to consumers in Botswana. Nobody is saying they can’t set a price that is reasonable and that makes them some profit, but they now have to at least tell us why the item priced at R50 doesn’t cost P40. If there are good reasons then they should be telling us. That’s all we’re asking, for a little respect for our laws and regulations.

The first pat on the back from Consumer Watchdog in 2016 goes to our very good friends in the Ministry of Trade and Industry. Well done to them!

Now, about pyramid and Ponzi schemes…

The Voice - Consumer's Voice

Have I won?

I need help i received a message from this number +14052833355 telling me that my mascom number has won iprize from sumsang. The amount is 850 000 GBP i.e pounds. I should email my names, telephone to them. Well i am using sumsang phone but i am wondering if there is any sumsang competition going on and if so why would i be selected in the U.K.

This is without doubt a scam. The clues are there. The number that sent the message appears to be from Oklahoma (+1 is the international code for the USA and 405 is the area code for Oklahoma City) but the prize they are offering is in British Pounds. Isn’t that a bit suspicious? Wouldn’t it be in US dollars?

Secondly, if they’ve selected you as the winner of such a large amount of money, why do they need to know your name and phone number? Surely they’d know these things already? This isn’t the way companies like Samsung operate. While their local distributors run competitions within each country, have you ever heard of companies like Samsung, Apple or Nokia running international competitions? I certainly haven’t.

Finally there are two big clues. The first is perhaps obvious. You can’t win a competition that you didn’t enter. You really can’t.

And the other clue? If you are the lucky one who’s won all this money, why did they send the same message to several other people as well? You’re not the only person who contacted us about the very same message. I suspect they’ve sent it to thousands of people.

As many readers of The Voice will tell you, this is just the beginning of an advance fee scam. Sooner or later they’ll demand that you pay them money to get the prize they’re offering. They’ll say it’s a tax or duty or a legal fee but that payment, that’s what the whole scam is about. Just delete the message and forget you ever received it.

Should she return the TV?

Seasons Greetings. I'm asking for a friend. She bought a plasma tv using her name using hire purchase. According to her someone had promised to help her pay the installments. Now that person is slow to assist. She says she approached the sales people at that furniture shop to ask what the procedure would be if she wanted to return it since she can't pay for it. She says the sales people told her she would be listed at the credit bureau as a slow payer. Anyone who knows what the procedure is help.

I’m sorry, there is no “procedure” to get your friend out of this mess. She committed herself very unwisely to buying the TV, at least partially, on behalf of someone else. As she has now discovered that’s a very dangerous thing to do.

What’s also very dangerous is just returning goods if you can’t afford them. It’s dangerous because the debt doesn’t go away when you return the goods.

Let’s assume that you buy a TV that is sold for cash for P3,000 but which will cost about P6,000 on hire purchase over 2 years. Yes, it’s usually about double the cash price. After six months you’ll have paid back P1,500 and will still owe the store P4,500. If you return the TV to the store they will probably only be able to sell it for half the original cash price, maybe P1,500 because it’s now second hand and used. That will leave you still owing P3,000, the original cash price of the TV. Add to that late payment charges, interest, debt collection fees and you could end up owing more then the total hire purchase cost. And you’ll be listed with credit reference agencies as a bad payer. And you won’t even have the TV any longer.

And another thing. Please tell your friend that she can’t sell the TV herself. That’s because it doesn’t even belong to her. When you buy something on hire purchase the item doesn’t actually belong to you until you make the final repayment. Until that moment the goods still belong to the store.

The tragic news is that if something goes wrong with hire purchase you are, to use a technical term, screwed.

I suggest you get your friend to talk to the store and see of they can rearrange the repayment terms so that she can afford them. If necessary we’ll speak to them on her behalf.