Tuesday 31 July 2012

The fake Consumer Watchdog site

This is the fake web site set up by the people behind Headway "University" that pretends to be Consumer Watchdog Botswana. They've taken text from our blog and also from other consumer sites to make the whole thing look legitimate.

Clearly we were getting to them. Clearly they can't abide having people expose their fake "university"!

Friday 27 July 2012


They say that imitation is the sincerest form of flattery. If that’s true then I’m flattered.

Regular readers will remember that I’ve condemned various fake universities in the past. One in particular, “Headway University”, is part of a large Pakistani-based group of fake establishments that sell fake degrees for money without any study, exams, dissertations or coursework. All you need is a credit card and you can get a fake degree of your choice in any subject you select. Such degrees are fake, as anyone will easily understand. What’s more anyone who buys one of these degrees is a fake as well and they know it and better still many employers are now realizing this. I’ve heard recently of various people who are no longer employed because their employers discovered that their supposedly trusted employees had bought fake degrees to help them get the job or the promotion. Obtaining a financial benefit using a deception is fraud.

The growing realization that fake universities aren’t real has clearly spread far and wide and it’s causing the scammers a lot of concern.

This has clearly hurt the people behind these fake universities because a couple of months ago they even invented a fake law firm to threaten us. An email turned up from “Joyce and Nielsen” demanding that that we apologize and remove the comments we’d made on our blog. Given that everything we said was true I declined and our comments about this bunch of crooks remain there to this day.

But that didn’t stop them. These are obviously creative, imaginative people and they came up with another approach to prolong their scam.

Their fake logo
I noticed recently that someone has set up a fake Consumer Watchdog web site that closely mimics our blog. It’s full of comments about Headway saying how wonderful it is and how trustworthy they are. The clues that the Headway “university” crooks are behind this are obvious. They’ve taken comments we made about Headway and adjusted them so they say the complete opposite. For instance my comment “It's a fake university, that's for sure” is miraculously converted into “It’s not a fake university, that’s for sure”. They’ve also posted fake comments from fake visitors to support their claims that Headway is genuine. Everything about this fake site is unreal.

My comments
Their adjusted comments
It’s not just from us that they’ve stolen material. In order to give the impression of being a genuine consumer support service they’ve lifted material from other consumer sites as well. It’s all done rather well. If only they put these skills to use in a proper job instead of stealing people’s money.

So why are they doing this? What motivated them to go to all this effort? Their problem was that we’d undermined their fraudulent scam. If you did a Google search for Headway University one of the first things you found was our blog, full of negative comments about them. They simply couldn’t permit that to carry on. How would they gather more willing victims to buy their fake degrees if high up on the Google screen was some guy in Botswana saying it’s a scam? Hence their fake consumer web site saying how wonderful Headway is, how it’s genuine and how nasty people like me can’t be trusted.

I’m genuinely flattered. I’m delighted that we were having such an impact that scammers are having to spend money, time and effort in fighting back. It’s enormously pleasing.

I’m also flattered that some scammers are so upset when they’re exposed as being scammers that they try to directly sabotage us.

Last month a reader contacted us to ask about an email he’d received from “Botswana Jobs” offering him a choice of amazing jobs paying salaries of up to P2 million per year. On top of these miraculous salaries they also offered stock options, bonuses and free "Accommodation and Feeding". Clearly this was yet another recruitment scam. Sooner or later there would have been an “advance fee” that the victim would have been required to pay the scammers, either a visa fee or legal cost. The fact that they gave no phone number, only used a Gmail address and have been exposed before all confirmed their scaminess.

I posted a warning about this on our blog and just for a bit of fun I emailed the scammers with a link to my comments, saying “Congratulations, you're famous.” Maybe that was a bit cheeky of me but it certainly inspired them to respond. An email arrived shortly afterwards pretending to be an official response and inviting us to download a document that explained “the course where are currently taking to protect our local job seekers”. The file they wanted me to download was infected with a computer virus.

Unfortunately for the scammers I’m not entirely stupid. I use a Mac which is largely immune from viruses but I nevertheless still have virus protection on my computer and I don’t just run things on my computer that strangers send me.

Perhaps the best measure of success in any venture is feedback. You know you’ve done a good piece of work when your boss pats you on the back or a customer calls in to compliment you. In a well-run organization you’ll also get constructive negative feedback as well when things go wrong.

The impression I get at the moment is that some of what Consumer Watchdog is doing is having an effect. Not everyone likes it, and some of them are getting really pissed off at us but do you think I care? The more angry scammers are, the happier I am!

The Voice - Consumer's Voice

Dear Consumer’s Voice #1

I bought a camera memory card from some big IT shop at an unbelievable cheap price and the first time I used it, 2 weeks or more after purchase, I opened it and it had some files in it. I tried to delete them but they turn to be permanent viruses. I used the virus cleaner to remove it but it could not be cleaned.

What do you suggest I do next time I purchase one and what are my rights?

I suspect that what you bought was actually a used memory card. Someone bought it, used it, innocently infected it with a virus and for whatever reason returned it to the store. The store then repackaged it and sold it again as new. No, before you ask, this is NOT acceptable and breaches various Consumer Protection Regulations.

The memory card wasn’t “of merchantable quality” as required by Section 13 (1) (a) of the Regulations. More importantly if I’m right then it was sold as new when it was actually used or second-hand, contrary to Section 13 (1) (c).

I suggest that you take the memory card back to the store from which you bought it and show them this newspaper. You should suggest to them, very politely, that they need either to replace the card with a brand new one or give you your money back. If they give you any problems, let me know.

Dear Consumer’s Voice #2

I received an email from the Norton Financial Group inviting me to partner with them and offering me their financing program. Can I trust them?

No. You can’t. This is a scam. Here’s why.

This is what part of their email says:
“We offer flexible loans and funding for various projects bypassing the usual rigorous procedures. This Financing program allows a client to enjoy low interest payback for as low as 3% per annum for a period of 5-25 years. We can approve a loan/funding for up to USD 500,000,000 or more depending on the nature of business.”
That first sentence is all you need to read. “Bypassing the usual rigorous procedures”? What lender does that? What lender contacts total strangers and offers to lend them $500 million? What serious lender uses a free email address, operates from a UK re-directable cellphone number and sends out spam emails?

The “Norton Financial Group” is genuine, it’s a UK-based finance company, but this email is nothing to do with them. This is yet another advance-fee scam. I guarantee that they’ll offer you an astounding amount of money at an astoundingly low interest rate with no checks and just before you get your hands on this fictitious money they’ll be a sudden, last minute requirement for you to pay THEM some sort of fee. It might be for a fake lawyer, tax or commission but that’s what the whole scam is about, that “advance fee”. If you pay it they’ll then concoct a series of further payments you’ll need to make and they’ll keep doing this until you realize you’re being scammed. Either that or until you run out of money.

This is yet another email you should just delete. Or you could send them a really rude reply telling them where they can put their scam emails!

Facebook warning

I love Facebook, I really do. It’s a great way to share information, to keep in touch with friends and relatives and even to learn a few things. However, just like the rest of the internet, there are dangers.

Several people have been in touch to ask about some of the schemes they see advertised on Facebook.

As I type this I can see an advertisement for investing in gold, when the gold price is today at an all-time HIGH. Why would I want to buy something when it’s at the most expensive level it’s ever been? Another offers a treatment called Baariz that claims it can remove HIV from your body and can cure AIDS. This is, of course, a lie.

The message is simple. Facebook is no different to the rest of the internet. Don’t believe anything you read unless you have a very good reason to do so.

Friday 20 July 2012

The enforcers are here

One of my biggest complaints in the past has been the lack of enforcement we experience in Botswana. We have some beautifully crafted laws, potentially very effective regulations and organizations empowered to enforce them but very little seems actually to happen.

The Consumer Protection Regulations are perhaps the least enforced of all of them but the more I think about it, the less I think that matters. The best thing that could happen for all the consumers of Botswana would be if we could enforce the Regulations ourselves instead of relying on the Department of Consumer Affairs to do it for us. The combination of a personal right of enforcement of the Regulations and the Small Claims Court would be incredibly useful. That way we could all act like grown-ups, get advice from the necessary government departments or other resources like Consumer Watchdog and then enforce our rights ourselves. That would be true “empowerment”.

However there are times when specialists are needed, when you and I are faced with a business situation when experts are needed. Education and training are good examples of this. How are we to know whether a local college employs genuinely qualified teachers and lecturers? We don’t get to see their degree certificates, we don’t get to see the real syllabus until too late, we don’t get to see their history. That’s why BOTA, the Training Authority was set up. You can visit their web site and see a list of all the local training and education providers and every course they offer that has been approved by BOTA. What’s more, every so often you see a notice in Mmegi and other papers from BOTA warning us about colleges that have tried to operate without BOTA accreditation. They make it perfectly clear that we should take our training needs and cash elsewhere.

More recently we’ve also see a new enforcer in the financial services world. The Non-Bank Financial Institutions Regulatory Authority, NBFIRA, have been warning micro-lenders for a couple of years that they needed to clean up their act. They finally got really tough a few months ago with notices warning all micro-lenders to register with NBFIRA before 30th June. A few weeks later they did the same, this time reminding loan sharks that they hadn’t been joking, they were serious. Many lenders followed the rules and registered which shows that the process can’t be too arduous, but many of them have ignored the rules.

Last week NBFIRA fired another warning shot in the direction of badly behaved lenders. Yet another notice invited any lenders who had failed to register “to cease operations with immediate effect”. It also made it clear that those lenders who think they can operate from their sitting room and don’t therefore have to register are mistaken. The law doesn’t mention whether they operate from an office, their house or a public lavatory. If they lend money they need to register. It’s that simple. Just like the rule that they can’t take a victim’s ATM card which so many of them still ignore.

Best of all were the potential consequences of angering NBFIRA. A fine of up to P2,500 for every day they transgress and imprisonment for up to 5 years. That’s going to hurt.

My sincere hope is that most micro-lenders will do the right thing and register with NBFIRA. I also hope that a few don’t. Some news reports say that some lenders have no plans to register and I genuinely hope that happens. There are few things I would enjoy more than watching a line of loan sharks walking out of court in handcuffs and being escorted to prison. Firstly because it would be hugely funny, but also because the message it would send would be so powerful. It would make the point that we’re serious about enforcing the laws that have been made to protect us.

The other recent bit of good enforcement news was about one of my favourite groups of people, so-called “traditional healers”. In fact they’re not healers at all, I think we all know that. In fact they’re charlatans, frauds, liars and cheats and recent news demonstrated that.

A group of them, including “Dr”s Nthati, Lukoma and Adam and “Mama Amina” were all part of a syndicate of frauds who stole people’s money. Sorry, according to the Police it’s “obtaining by false pretences” but it’s the same thing. They make up some miraculous claims to heal sickness, enlarge parts of your anatomy or get you a better job and you give them cash. These guys were particularly inventive crooks. Apparently they’d constructed a termite mound containing a cellphone and a speaker that one of their fellow crooks would call to produce the voice of a spirit, helping to convince their massively gullible victims of their supernatural skills.

At least the Police now appear to be doing something about these shameless criminals and it’s about time too. Again we need to see a few of these crooks spending some time in prison and perhaps the message will spread that we’re a country that expends some energy in preventing and prosecuting crime.

Maybe this is the beginning of a new period of muscular enforcement of our laws. BOTA, NBFIRA and the cops are all beginning to be really aggressive towards these crooks. That can only be good news. I suggest we all congratulate them for doing a good job. You can contact BOTA here and NBFIRA here.

The Voice - Consumer's Voice

Dear Consumer’s Voice #1

Good day. My car's power steering pump went bust and my mechanic informed me he had found a used one at a vehicle recovery shop in Mogoditshane. I gave him the money to purchase it only to find out upon fitting it that the pump did not work. He returned it to get a replacement or money back (he assures me he has a receipt that he kept) but now tells me they are giving him the run around. The pump was purchased last week Tuesday. What would be my best course of action to either get them to replace the pump or return my money?

This sounds quite simple really. The guy in Mogoditshane has your money and you still have no pump. He needs to fix that, either by giving you your money back or by giving you a pump.

I think you need to get more details from your mechanic and then contact the vehicle recovery shop and give them a fixed time to refund you, perhaps 7 days if you think that’s reasonable. You should tell them that unless they do you'll take the issue to the Small Claims Court for a judgment. See if that inspires them to get moving.

Dear Consumer’s Voice #2

In March I ordered with a company for a canopy for my vehicle and I deposited P6,500. They were to deliver and fit at my place the same weekend.

That weekend the order was not delivered. I called and they promised the following weekend but two weeks later I still received no canopy. In the meantime the supplier wouldn’t take my calls. Three weeks later a canopy was delivered but unfortunately it was the wrong size. I asked if this was the first time such a mistake happened and they said it was not. They promised to bring the correct one the following weekend.

Since then they never called me to tell me know what the matter was, I just got promise after false promise. At the beginning of June I sent them a letter to ask them to either to deliver the canopy or refund me all my money by end of June, after which I will have to take legal action against them.

Since then I have not heard from them so I need you to help me as to how I should take legal action against this company. I would like them to refund my money as I have lost trust in them altogether.

I'm sorry that you've been having problems.

I think you need to send the company another stern letter giving them a deadline either to refund you or give you the correct canopy. Give them 7 days and tell them that you will take them to the Small Claims Court if they don’t comply. Since they were set up the Small Claims Court have turned out to be remarkably useful. They only cover issues up to P10,000 but that will be fine for you. You should also mention in your letter that you've reported this situation to us and to The Voice as well.

If they don't satisfy you then you really should follow through and get an order against them and then have fun enforcing it.

Degrees update

Various people have been in touch to ask us to check the validity of degrees awarded by establishments in South Africa. The results are really mixed. Some have been legitimate, others confess that the degrees they award are not accredited. One college, who say that they are accredited by a non-recognized authority, told us that people applying for their degrees
“are informed that the course is not officially accredited but in process or pending accreditation”
What they mean is “No, our degrees are NOT accredited”.

Micro-lenders update

You’ll probably have seen notices from the Non-Bank Financial Institutions Regulatory Authority, NBFIRA, warning micro-lenders to cooperate and register with them or to face the consequences. They warn that failure to register can incur fines of up to P2,500 per day and up to 5 years in prison. Some loan sharks have apparently said that they’ll refuse to register and they’ll continue with illegal practices such as keeping their victims’ ATM cards to make sure they get paid. It really looks like some of these crooks are going to be punished. NBFIRA have shown themselves so far to be a regulator that’s not afraid to regulate and to enforce it’s rulings. Loan sharks better look out!

Meanwhile if circumstances force you to visit a micro-lender then insist that you see their registration with NBFIRA. If they can’t produce it then leave immediately!

Tuesday 17 July 2012

Royalty7 - an update

I've mentioned what I thought was a Ponzi scheme calling itself "Royalty7" on a few occasions. Authorities in the UK and the Isle of Man have both warned the public against "investing" with them.

Reports are now emerging that this Ponzi scheme has collapsed.

This will happen to ALL schemes like Royalty7 that make ridiculous claims such as:
"All our members have equal opportunity to benefit from an attractive 7% Daily / 110% Weekly plans on a long term basis, with the lowest possible risk of losing the initial principle invested."
Claims like these are lies and people who invest in a Ponzi scheme will end up the victims of liars.

Friday 13 July 2012


I really love getting feedback, it makes my day. It’s wonderfully rewarding to get emails, calls and letters from people saying they like what we do, what we write and what we say. When they say that we’ve helped them to solve a problem, or better still to avoid being abused that’s even more pleasing.

We’ve had a huge response in particular regarding fake universities and the fake degrees they offer. I really think there’s a growing realization that people with fake degrees are themselves fakes. It’s really quite simple. Anyone smart enough to recognize that they will advance their career with a degree, smart enough to have a credit card and smart enough to use the internet is also smart enough to know that you cannot get a real degree without doing coursework, submitting assignments and sitting exams. They’re not that stupid. They know that the degree they bought with their credit card is a fake and that they are as well.

A large number of these fake universities actually seem to be run by the same company in Pakistan. Most of the ones we’ve named in the past are part of this group, including a popular one calling itself “Headway University”. This “university” is no more than a web site that takes credit card details in return for fake degrees. Despite claiming accreditation from various bodies, they are not recognized by any genuine authority. The accreditation bodies they claim have approved them are fakes as well, set up by the same people who set up the “university” web sites.

Having criticized these fraudsters repeatedly it was no surprise when someone got in touch, not this time to praise us, but to hassle us instead. About a month ago we received a letter from a company claiming to be a law firm called Joyce and Nielsen. Their letter claimed that our comments were defamatory and had “already caused some serious financial damages to our client” and accused us of “extortion, blackmailing, and cyber bullying”. They demanded that we remove anything bad we’d said about the Headway crooks on our blog and explain ourselves, all within 72 hours.

Here’s a strange thing. This law firm doesn’t seem to have an office, they’re just a web site. Even stranger is that the content of their web site appears to have been taken, often word-for-word, from the web sites of other law firms. I don’t believe that Joyce & Nielsen actually exist. They’re a fake as well.

I’m sure you won’t be surprised to learn that fake threats from fake lawyers about fake universities deserve fake respect. Our comments about the fake Headway “University” remain on the blog and you can read the ridiculous threatening letter there as well.

We’ve also had feedback on various pyramid schemes and Ponzi schemes recently, almost all of it constructive and supportive. However we’ve also heard from people who are clearly in the depths of denial. Even when we point out that the founders of these schemes are under investigation by the South African authorities, have had earlier but identical businesses shut down or have even had their members arrested and prosecuted, they still seem to have their eyes fixed on the illusory prospect of riches and fortunes. Riches and fortunes they have to pay for and for which they must recruit other victims.

Despite all the evidence these religious-cult-like schemes still gather more and more members, or should I say victims.

It’s a very sad situation when somebody clearly needs help but doesn’t recognize it. It’s like that relative or friend we’ve probably all had who has a serious addiction to booze or drugs. No matter how carefully you try and raise the issue and explain how they’re destroying themselves, they won’t have it. You know that sooner or later you’re going to see them in despair and there’s nothing you can do about it. All you can do is hope they survive the eventual fall.

We’ve also had responses from people supporting companies who sell the most ridiculous products. A company called Qnet, who used to call themselves Questnet, sell the silliest item I’ve seen in years, the so-called BioDisc. This is a piece of engraved glass they claim possesses magical properties. For instance they say that it can “redefine and harmonise the energy of water, greatly maximising its positive affect on the human body” and that it “makes water more hydratious, which therefore improves the compatibility of water molecules with the body’s cells”. This is, of course, pseudoscientific crap. They use clever-sounding words like luminescence, photons and biocompatibility but none of what they claim makes any sense at all. The claims they make about this and their other products are just ridiculous, untrue and illegal.

When we commented on this I got a message from someone suggesting that as I’ve never actually used this product I wasn’t qualified to comment on it’s health-giving properties. That’s just silly. I’ve no personal experience of shooting myself in the head but I think I’m qualified to say that it’s a really bad idea.

They were even more unhappy when I pointed out that Qnet has been declared a pyramid scheme in countries as varied as Afghanistan, Australia, Canada, India, Iran, Nepal, Rwanda, Sri Lanka, Sudan, Syria, Turkey and the USA.

So please keep the feedback coming in, please tell us what you like, what you think we should investigate and who we should be exposing. Also, if you think we need to be cheered up, write to us and tell us how your particular pyramid scheme, magical bit of glass or fake university or college is actually a miracle that will bring people prosperity, health and happiness. We need a laugh.

More "awards"?

Mmegi reports that various banks in Botswana have won awards from "World Finance" who they describe as "a global publisher of several financial titles". You can see the full award list here.

But how exactly are these "awards" awarded? Who selects the winners? Who checks that the companies are actually legitimate? Who makes sure they're not actually crooks?

Some have been crooks of course. See the Daily Mirror story here about various crooked companies who won a World Finance Award. I should point out that World Finance withdrew one guy's award "Pending further investigation".

Before being impressed by a company winning an award you need to be very skeptical about the award. Ask some questions like "How exactly did they win it?"

The Voice - Consumer's Voice

Dear Consumer’s Voice

In January I paid a supplier over P90,000 for farming equipment for my land. Unfortunately it took longer than I planned to clear my land and the Land Board refused me a certificate until the land is 100% cleared. I went back to the supplier and asked them to cancel the deal and refund me my money. None of the products I bought have been delivered yet. I told them that I desperately needed a refund to help me clear the land since I was short of finances. Instead of giving me a refund the supplier told me that I could not be refunded but instead they would only give me part of my money, P21,000, saying I should find a buyer for the rest.

They never told me there could be no refunds in any of their paperwork that I signed. I therefore appeal to you to assist me in getting back my money.

It seems to me that this supplier is being totally unreasonable.

It’s obvious from the paperwork you sent me that none of the items you bought are perishable. You bought gum poles, shade netting, cables, wires, nails, twine, a hydrant and an irrigation unit. Do ANY of these items go off, like food would? If you’d bought something that expired, went bad or became toxic if it was left unused I might think differently but I can’t see this in your case. Given that ALL of these items are still in their depot and are probably even on the same shelves as the items they haven’t yet sold I think they’re being totally unreasonable.

I’ve written to them on your behalf asking for their side of the story and reminding them that Section 15 (1) (e) of the Consumer Protection Regulations states that a supplier fails " to meet minimum standards of performance” if, when a deal is cancelled or terminated they fail “to promptly restore to the consumer entitled to it a deposit, down payment, or other payment". I’m sure they know this, don’t you think?

Let’s hope they see reason.

Cruise ship scam alert

A reader got in touch to ask about the authenticity of an email he received. This claimed to be from “Carnival Cruise Lines” and informed him that they have “23 Fun Ships operating voyages ranging from three to 16 days in length to The Bahamas, Caribbean, Mexican Riviera, Alaska, Hawaii, Canada, New England, Europe, and Bermuda.”

It went on to inform him that:
“We seek to write to your response on a Job opportunity … There will be no interview required since this is manpower job where anybody is fit to work.“
These job offers seemed remarkable. It claimed they had vacancies for everyone from cleaners to chefs, nurses, doctors and engineers and the salaries they ssuggest are stunning. A cleaner, they say, will earn:
“US$28 (Twenty Eight Dollars) per hour and you will work for 8 hours per day and also there is a chance for overtime if you have the strength.”
Let’s get this straight. $28 is over P200. PER HOUR? At this rate a cleaner will earn more than P1,600 per day. Each week these mythical cleaners will earn over P8,000. A year doing this will earn the cleaner P430,000.

They claim that the better jobs will earn “$40,000.00 - $100,000.00 US$(quarterly) depending on qualifications and experiences negotiable”. That would mean salaries up to P3 million per year.

Do you believe this? No, neither do I.

Carnival Cruise Lines IS a genuine company that runs cruise ships around the world and yes, they do indeed need staff but this email is nothing to do with them. This is a scam, there’s no doubt about it. We’ve seen this one several times before. Sooner or later the scammers would demand an “advance fee”, in this case it will probably be for a fake visa or for a uniform. Whatever it is it will be fake, just like the rest of the story.

If you visit Carnival’s web site and click on the “Careers” link the first thing you see is a warning about scams like this one so clearly they’re concerned about this as well.

If you get an email like this, offering you jobs out of the blue without the need for qualifications or interviews just delete it and don’t give it a second thought.

Friday 6 July 2012

Do decent loan sharks exist?

I’m sure there are micro-lenders out there that are decent human beings. I’m prepared to be optimistic. There must be.

There is, however, no evidence of this. At Consumer Watchdog the only stories we hear are self-selecting. Consumers with good news stories about loan sharks don’t spend their time emailing us to celebrate them. We tend to hear only about the bad experiences, about the lenders who treat their customers with contempt, who charge exorbitant interest rates and who show shameless disregard for the law. We only hear the bad news.

And sometimes the news is really bad.

Recently we heard from a reader who borrowed P2,500 from a loan shark in April 2011. The agreement was that this was to be paid back over a couple of months at a monthly interest rate of 25%. Yes, that’s 25% every month. The total amount to be repaid over 2 months would be P3,750. If it had been over 3 months it would have been almost P4,000.

The problem, which will come as no surprise to anyone, is that the borrower defaulted on her repayments fairly quickly.

First things first. Clearly that she should NOT have defaulted. Despite my loathing for the loan shark industry, I believe even more strongly that people should stick to their promises. If you borrow money from someone, either a loan shark or a furniture store (yes, store credit IS a form of borrowing) then you have to stick to your promises. If you can’t be certain you’ll be able to make the payments, don’t take the loan. No matter how hard your finances are, they’ll only get worse if you piss off a loan shark.

Nevertheless none of this excuses the conduct of this particular loan shark. To begin with he took the borrower’s ATM card from her. Anyone with a brain, the ability to read and a passing relationship with newspapers like Mmegi will know that this is forbidden. The tough guys at the Non-Bank Financial Institutions Regulatory Authority, NBFIRA, put adverts in the papers months ago reminding us all, and loan sharks in particular, that this wasn’t permitted. (You can see their press release here, a 508kB Microsoft Word document).

When I spoke to the shark about this he said “but I never used it!” That turns out to have been a lie. In fact he’d used it to withdraw P1,000 from the reader’s bank account.

I only found out about this situation when the reader got in touch, a year after missing her payments, when she got a letter from the shark demanding that she settle her debt which he claimed had now reached P13,085. Regular Mmegi readers will now be muttering the words “in duplum” under their breath.

The “in duplum” rule is a very pleasing bit of common law that is respected throughout our region. According to the very learned Judge Dow:
“the in duplum rule serves to aid debtors in financial difficulties by holding that it is unlawful to recover interest equal to or more than the capital sum upon which interest had accrued” [and that] “the in duplum rule cannot be waived and circumvention of the rule cannot be tolerated by courts”.
In simple terms a loan shark cannot enforce a debt of over P13,000 for an initial loan of a mere P2,500. The court will laugh in the loan shark’s face. However many micro-lenders are relying on borrowers’ understandable fear of going to court. Nobody wants to end up in court but the irony is that that’s where the law is best applied. Outside of court the shark can demand whatever he wants. As soon as real law is applied things are more decent.

Another requirement that NBFIRA have made perfectly clear is that all loan sharks must be registered with them. They’ve got to fill in forms, disclose who owns and runs the company, where they operate from and how much cash they have in the bank to lend all that cash. You have to ask yourself where some of the more disreputable lenders get all that cash from.

Yet again this particular lender fails the test. Rather than meeting the borrower in the office most times they got together in the African Mall. If he was buying her some spicy chicken that might be fine but I think it’s safe to assume that lenders that operate from car parks are crooks.

When I asked him whether he was registered with NBFIRA I’m sure you won’t be surprised to hear that he was “in the process” of registering. As far as I can establish this is yet another “untruth”.

He also seems to have a rather poor ability to keep records. He can’t provide any written records of her repayments and couldn’t even remember all the amounts the victim, sorry I mean “borrower”, had paid him back.

I can’t actually think of a single thing that this particular loan shark has done right. He’s broken EVERY rule that NBFIRA has put in place, he has no knowledge of the law relating to debt and operates from a car park. The only thing he’s doing well is stealing money from his victims.

The good news is that NBFIRA is one of the few regulators who have a backbone. They’ve made it perfectly clear that they’re there to do a job and they’re prepared to exercise their authority. Sooner or later loan sharks like this one are going to be out of business. Some might even be in jail. That’ll be a day to celebrate.

I like the Namibian authorities

Some months ago we covered a scam operating under the name of "FundaciĆ³n Donaciones Humanitarias".

Their scam is based on the offer of a grant or donation to a developing nation. Through an innocent intermediary they approach a government, such as that of South Africa, and later Namibia, offering them a grant (not a loan) of, get this, US$800 billion. No, not millions, BILLIONS. That’s more than the entire GDP of South Africa. It's roughly P5 TRILLION.

The amount alone is enough of a clue. More clues include the "FundaciĆ³n" not actually existing, there being no trace of any donations they've ever actually made, and them having no named officers other than the mysterious "Sir Edward Cooper" who proudly possesses a fake knighthood. You can see our history with them here.

I knew they had approached the Namibian Government and were told, rather politely, to bugger off ("It goes without saying that we are not interested"). I hadn't noticed that the Bank of Namibia had issued a specific warning about them which you can see here (small pdf document).

Yet again well done to our Namibian cousins!

Thursday 5 July 2012

The Voice - Consumer's Voice

Dear Consumer’s Voice #1

I helped a certain woman to get goods (fridge) on account using my account at a certain furniture store. We made a verbal agreement to pay off the installments so as not to blacklist my account. She only paid the first two months and has not paid for five months. I have taken her to court and await the outcome of the ruling. I have approached the general manager of the store and told her my problem. Please help me. What do I do to get her to pay for her goods?

You know that this was really unwise, don’t you? I can understand using your furniture store account to buy something for your wife, husband, long-term-partner or child but “a certain woman”? Also, I’m not sure what a “verbal agreement” really is. Certainly it’s not something you can rely on. What matters is what’s in writing and in your situation the ONLY thing in writing is the agreement between you and the furniture store.

I suspect that you've done as much as it's possible to do. Once you have a court order you can possibly recover the goods she bought, perhaps even more, but I'm not certain what the procedure is for that. Your attorney will be better placed to advise you.

Unfortunately the furniture store has a contract with you and not with her so they're entitled to require you to honor the debt with them. If you can explain the full details to them they show you some lenience but they're not going to let you walk away from your obligations. After all, the store hasn't actually done anything wrong. Your best hope is the ruling from the court.

Dear Consumer’s Voice #2

There is an advert on BTV for a device called Pest Magic which they claim drives out pests from your home. Does this device really work or are people being taken for a ride?

As the scientist and broadcaster Carl Sagan famously said, “extraordinary claims require extraordinary evidence.”

The suppliers of this device say that all you have to do, after spending P199, is plug it into a power socket and with its “enhanced microprocessor design” it will create “an intermittent signal using the wiring in your walls that drives pests out.”

They claim on their web site that it “literally makes those pests disappear” and that it “uses the wiring in your home to create a frequency that acts like a controlled interference in the house wiring to irritate pests and will even prevent them from coming back.” They claim that this device uses its “advanced digital cycling method to drive out pests and keep them out”. They claim that it is “approved by the Environmental Protection Agency”.

This is a very good example of pseudoscience, using scientific-sounding terms to make something sound scientific when in fact there appears to be no evidence that it works. In fact, all of the reports I could find about this particular product suggested that it didn’t work at all and I couldn’t find ANY evidence that the device was indeed “approved” by the United States EPA as they claim.

Instead what I found was a series (see here, here and here for all the search results) of rulings by the US Federal Trade Commission as far back as 2002 instructing companies in the USA who marketed products exactly the same as “Pest Magic” to stop it if they wanted to avoid their wrath. I also found a ruling by the South African Advertising Standards Authority forcing Homemark, who sell this device in SA as well as in Botswana, to modify their advertising of the product to cut out some of the pseudoscientific claptrap. Clearly they didn’t go far enough!

My suggestion is to ignore pseudoscience and not to waste your money on products that cannot prove what they say they can do. Section 15 1) (b) of the Consumer Protection Regulations says a supplier has failed to meet minimum standards of performance if they quote “scientific or technical data in support of a claim unless the data can be readily substantiated”. The next section also prevents a supplier from promising “outcomes where those outcomes have no safe scientific, medical or performance basis”.

Yet again we see products that are either banned or heavily controlled in other parts of the world being sold to our unsuspecting public. But maybe things are changing? Maybe there’s a growing level of skepticism? We can only hope.

Wednesday 4 July 2012

Consumer alert: "Virtual" credit cards?

A reader asked for our feelings on a "Virtual" credit card he encountered.

First observation: Their web site is botswana.card444.com. It didn't take too much detective work (I guessed) to establish that identical sites exist for pretty much every other country you can think of

The web site suggests that this "virtual" credit card could be very useful.

However, the truth is more complicated. This is not, in any sense, a credit card. Nor is it a debit card. They are lying when they claim either of these things.

In fact these "virtual cards" are nothing more than a very expensive prepaid payment scheme. You pay an amount of money to get no more than a card number with a specific value that you can use online. Once you've used up that value you'll need to buy another one. You can't "top up" or recharge a "card" once you've bought it.

Just like a real credit card the facility is time-limited, having "an expiry of between 12 to 24 months". After 6 months you even have to pay to keep it. They say: "Is there any monthly maintenance fee to be paid?
No, there is no monthly fee for first six months afterwards $2.5 per month."

It's also fantastically expensive to buy this "credit". For instance a $10 "preloaded card" costs $40. To buy $100 you need to spend $160. $5,000 costs $6,500.

It wasn't difficult to find a number of complaints online about the company, many saying that the "card" doesn't actually work with many online suppliers and others saying that the whole thing is a scam.

This is way too suspicious to be trusted. The costs are enormous, there's no guarantee anyone will accept it and they make a big point of saying they require no ID from you. This is deeply dodgy.

Steer clear!