Friday 27 September 2013

The Forex Fallacy

Other than burning it, flushing it down the toilet or gambling in a casino what’s the quickest ways to lose money?

First things first. Why would you want to lose money? The only “legitimate” reason I can think of for deliberately wanting to lose money is when you want to launder it. Laundering money is when you take dirty money like the proceeds of crime and “launder” it so it looks like clean money earned using normal, legal means. More often than not the simplest way to do this is just to pass it from one person to another over and over again so that law enforcement officials like the police or BURS can’t figure out what is what.

The quickest way to do this used to be to set up a cash loan business. You didn’t need premises or even a bank account. I knew people who ran such businesses from under trees in car parks or from their government offices. Almost everything was done with cash and virtually no records were kept.

But then came NBFIRA and their requirements that loan sharks operate from offices, had bank accounts with a minimum amount of money in it, stopped taking victims ATM and Omang cards and registered themselves. The result was dramatic. The majority of loan sharks stopped trading. A few are still operating undercover but the majority just went away and that’s good because at least some of them (some experts suggest most of them) were laundering money for organised crime. We have a regulator that drove crime away.

But there are other ways to lose money, just so others can make some. One of the easiest is to trade foreign exchange. I don’t just mean going to the bank and buying some US dollars, hiding it under the bed and later converting it back to Pula when the exchange rate has changed in your favour. I mean online trading where you sit at your computer switching between currencies perhaps many times per day.

It sounds so simple when someone in a flashy suit and tie presents it to you, they portray it as an “opportunity” to make a lot of money and to reach “financial freedom”. But it’s simply not true.

I have yet to meet ANYONE who has made appreciable amounts of money by trading Forex. Rather than comment myself on why this is the case I contacted an expert. I won’t tell you who he or she is but rest assured that this person knows the financial markets as well as anyone I know. This is what my expert said about trading Forex:
“Forex trading is Gambling. The Casino in this case is a forex trading website, which takes a small cut of each trade. Apart from owning one of these websites, the only sure-fire way to make money in forex is to sell a trading system or an education plan to suckers who want to make easy money.

There’s nothing illegal about it, as the system is sold as ‘education’ with lots of caveats in the small print. It might cost you anywhere from P2,000 to P50,000 to buy a trading system and learn how to use it.

However forex is the biggest and most liquid market in the world (estimated three trillion dollars a day) so if you have a successful system you could trade it on a vast scale and literally make billions. Why would anyone sell a successful system to the general public for (say) $5,000 each?

The facts are that the forex industry admits that 95% of people lose money when trading forex. As there is no underlying profit in a forex pair (as there would be from shares in a company) the market is a zero sum game. The 5% must make money from the 95%.

If successful trading systems do exist, then it is a given that they are used by Goldman Sachs and other companies to make vast amounts of money. These investment banks then are the majority of the ‘5% success’, so not even luck is going to keep the public trader in profit.”
My industry expert makes an important point. He says that forex trading is a “zero sum game”. This means that when all the trading is done there is no more money in the system than there was to begin with, it’s just moved around a bit. But that’s not actually true. There are actually THREE parties to a forex trade. The seller, the buyer and another party: the people who own the trading mechanism, the ones who recruited you, the ones that make little commissions on every trade you do. It’s actually a net loss game for the buyers and sellers.

Unless you are Goldman Sachs or just extremely lucky you are destined to lose. Mere mortals such as you and me simply can’t compete in this game against companies employing economists, strategists and (often disgraced) former politicians with insider knowledge.

Add to all of this the variety of rather shady characters involved in the forex or stock market education market and you have an industry that is based on deceptions and distortions. Do you remember Stock Market Direct, which offered “education” on how to trade stocks and shares and whose founder, the mythical “Tony Samuels”, skipped the country with millions he’d taken from gullible investors?

Just ask yourself one question before you sign up for any scheme that says it will teach you how to make money. How do the company selling the education make money? If their system is so good why are they teaching other people how to use it instead of doing it themselves? Rest assured that if I find a way of making a fortune I’m not going to tell you about it!

The Voice - Consumer's Voice

Dear Consumer’s Voice #1

In my quest to find ways on how I can make a living through the internet, I came across these two online companies; Empower Network and Big Idea Mastermind. The two companies work hand in hand actually, it seems Big Idea Mastermind basically assist one make money through Empower Network. Empower Network is the main company that one needs to join and sell their products to other people so that they can also join in. That way one will be making 100% commissions from the sales made. Big Idea Mastermind as stated is just a wheel that teaches and help you sell Empower Network and make commissions.

I am tempted into joining them and I therefore would very much appreciate it if you can look into it and advice me. Are these legit, and are they ways they say one can make money through them legit? Please assist me!

I’m sorry, Empower Network is yet another Get Rich Quick scheme. I think we all know that the only people who really get rich from these schemes are the people that create them, particularly when there aren't actually any real products at the heart of the scheme. None of this stops the people in Empower Network doing their best to recruit more and more victims. Their sales pitch suggests that using their scheme, which you have to pay to join of course, will allow you to make a fortune from blogging. Quite how isn’t made clear.

With any scheme that promises to give you the secret to making vast amounts of money you have to ask yourself this: Why are they sharing this with me instead of just making lots of money themselves? Is it because the only way to make money is by recruiting other people?

They have a link on their web site entitled "Products" but all they do is talk in very general terms about "a blog system that sucks up cash for me 24 hours a day in ANY program I'm involved with". It doesn't get any more specific than that. Yet another clue that this is no more than another pyramid scheme?

One other clue is that the physical addresses Empower Network offer in the USA and the UK are both no more than accommodation addresses used by a range of other companies needing a base to make themselves look legitimate.

Please don't waste your time and money in these schemes.

Dear Consumer’s Voice #2

I would like your assistance on one issue I have with a dry clean. I took my navy Paul Smith jacket to them for cleaning on the 21-08-13 and to my surprise when they presented it back to me it was in a very bad state. I refused to take it and made them aware of the defects on the jacket which they accepted. The issue was then forwarded to the dry clean owner who promised to get it fixed since then all I hear is one story after the other. My jacket was worth P750 and that's what I want from the store owner.

I met with the business owner last week Friday and he apologized for all the inconvenience they caused and agreed he will meet his staff and get back to me with proper feedback by end of business same day and up until now I still haven't heard from him. I had given him the receipt for the jacket value and I told him I need compensation so I could get a new jacket.

I’ve tried contacting the dry cleaners on your behalf but they don’t seem to want to talk. I suggest that you tell him that my advice is to go to the Small Claims Court and seek an order for compensation from them. The process is that you write them a letter listing your grievances and giving them 14 days to pay up. After 14 days (if they haven't paid) you go to the court and present your case. Your case sounds perfectly simple to me, particularly as they previously admitted that they damaged your jacket.

Let me know how they react!

NBFIRA warn consumers about Go Direct Stock Market Investments

A (very welcome) notice in Mmegi today concerning Go Direct Stock Market Investments reads as follows:

The Non-Bank Financial Institutions Regulatory Authority ("NBFIRA") has become aware of a company by the name of GO DIRECT STOCK MARKET INVESTMENT (BOTSWANA) (PTY) LTD ("GDSMI"), which a number of people in Botswana are using for investment services.

NBFIRA conducted an investigation on GDSMI and hereby states the following:

* GDSMI has not been registered, licensed, approved and or endorsed by NBFIRA to operate; and

* The Regulatory Authority warns the public that GDSMI is not licensed by NBFIRA to take any funds on behalf of the clients.

The public is advised to undertake its own due diligence before investing with any Non-Bank Financial Institution ("NBFI"), and contact NBFIRA on 3102595 or 3686100 to ascertain the legitimacy of any NBFI prior to making any investment decisions.

Sincerely yours,

Mt Oaitse Ramasedi
I like NBFIRA.

Friday 20 September 2013

It's up to you

Consumers need to take personal responsibility for their actions. We really should. But not all of us do so.

We got a panicked email from a consumer explaining her dreadful, appalling problem. She’d visited a well-known supermarket and in her shopping was a box of 12 eggs. The problem occurred just as she left the store. She passed the security guard on the way out and a few steps further she dropped her box of eggs, smashing them. There was egg everywhere.

She told us that “I went back to the store I asked the security guy how they can help me but he said there is nothing they can do.”

She was outraged. She escalated things a bit, demanding to see a supervisor who also told her that there was nothing that could be done to help her.

I confess that I initially misunderstood her complaint. To begin with I thought she was being a good neighbour and wanted someone to help her clear up the mess all over the pavement but that wasn’t actually her problem. What she wanted was her eggs, the eggs that SHE had dropped on the floor, to be replaced. For free.

As well as emailing this to us she posted this on our Facebook group and everyone’s reaction was basically the same. “You dropped them, didn’t you?”

Why would the store have a responsibility to fix this?

I remember listening to a phone-in on a South African radio show years ago. The furious caller had just visited his bank, withdrawn some cash, left the bank, walked round the corner, down the street, round another corner and had then been mugged and all his money had been stolen. He was outraged that when he went back to the bank and demanded that they replace his money at their expense they declined. It wasn’t their fault they’d said. He genuinely couldn’t understand the bank had no responsibility, morally or otherwise, to cough up new cash for him.

Just a few weeks ago a reader contacted us asking why a store had charged him the cost of the jar of mayonnaise his 3-year old son had knocked off the shelf. Why should he have to pay, he asked, he didn’t deliberately break the jar, it was an accident?

It also took a little effort for me and the Facebook community to persuade him that yes it WAS his responsibility. It certainly wasn’t the store’s fault, they hadn’t done anything wrong. I asked him this question. If you’re in a bar and you accidentally knock over someone else’s drink, what are you meant to do? Everyone who’s ever been to a bar, and even those who haven’t, know that the unwritten rule, based on common sense and common morality, is that you buy the guy a replacement, even if he’d nearly finished the one you spilled.

Admittedly those are all cases when the customer (I think) completely lost any sense of personal responsibility. Other cases are more complicated, but they still involve consumers not taking as much personal responsibility for their own protection as they should.

Yet again we heard from a reader who had received a call out of the blue from Hotel Express International offering their Hotel Express Card, that they say is the “card that allows you to pay half price at hotels”. We’ve heard repeatedly about this company and the others that offer these miraculous cards that supposedly offer amazing discounts on hotel stays. Discounted hotel stays are fine of course, but the silly thing is that you don’t need to pay to join these card schemes to get discounts. I know of two South African hotel chains that offer discounts for free. You don’t need to join, you don’t need to pay vast membership fees to get the discounts.

However the problem that repeatedly occurs is abuse. We’ve heard so many times about this and other similar companies who call people and, to “check your eligibility”, they ask for your debit or credit card number. Sometimes they say that they need your card details to see if you’re eligible for “Gold membership” or some such hogwash. If asked, they assure you that they won’t actually charge you, it’s just for that mythical eligibility test.

You know what happens next. Within minutes of giving out your card number and hanging up the phone, your cellphone beeps and you see that they’ve charged you the full amount. In the most recent case it was almost P4,000 that disappeared. Then you have to struggle to get a refund.

But this is nothing new. Several companies operate like this and this situation occurs so often that I suspect it’s an unofficial policy with some of these companies to allow this to happen.

So who’s fault is it when this happens? I don’t think it’s as clear as the egg and mayonnaise situations but these customers weren’t mugged. They voluntarily gave out their bank card details. Nobody forced them, no threats or weapons were used. Yes, they were deceived but some deceptions are easier to see through than others. Giving you card details to a total stranger is bordering on being reckless.

It’s not just hotel discount schemes that do it, XForex, the scheme offering amazing profits by trading foreign exchange have recently done exactly the same thing.

I know there are bodies out there to protect us from abuse but deep down don’t we all know that the only person who can really protect us is the person we see in the mirror?

The Voice - Consumer's Voice

Dear Consumer’s Voice #1

I would like you to help me, here is my story. I went to a store I bought eggs and some other stuff and I paid I went out and immediately after I left the shop the eggs fell. I went back to the store I asked the security guy how they can help me but he said there is nothing they can do. I asked for the supervisor or someone who I should ask for help but he told me to go and talk to the supervisor. I did that they told me there can’t help me because it happened outside the store. I asked them so that’s it they said yes, So please help me here and tell me there are joking. My 55 pula cant just go like that!

I’m sorry, I don’t think you’re being entirely reasonable. My understanding is that you were outside the store when you dropped the eggs? And it was actually you that dropped them?

Even if you’d been inside the store when you dropped them I’m not sure how you can expect the store to take responsibility for your mishap. I understand that this is frustrating but it wasn’t their fault. They didn’t do anything wrong, so why should they bear the cost?

A member of our Facebook group recently asked about a similar situation. He’d been shopping with his 3-year old child and as they walked down one of the supermarket aisles the boy accidentally knocked a jar of mayonnaise and smashed it. The reader asked whether it was reasonable for the store to insist that he paid for the broken item. Everyone’s reaction was the same. Yes, they were within their rights to do so because it wasn’t their fault. If he hadn’t visited the store they’d still have a jar of mayonnaise and they wouldn’t have needed to clean up an enormous mess.

Unfortunately one of life’s lessons is that bad things just happen sometimes and there isn’t always someone to blame.

Dear Consumer’s Voice #2

I bought a bed at a store in the Main Mall last October then early this
 year it started making sounds. I reported the matter to them beginning of 
April and they said they will tell those who are responsible for such. I
 waited and waited then after 2 weeks I went back to them because they said
 they will call but they didn’t. They sent me back home saying they are still
 waiting for another bed from South Africa to exchange. Weeks passed by
 without any word from them, I checked them again and I was attended by a
 different person telling me that the matter is not yet reported at the
 Head Office and he will report as soon as possible and he will call me to
let me know what they have decided but he didn’t call. I went there on
 Monday, he told me that to go and he will call me later after talking to
those at the head office but he didn’t call. After 2 days I went there and he
told me the same story go back I will call you and that was it until
now. Please help me. I am really sick and tired of the game they are playing

I’m very sorry for the trouble you’ve been through. Clearly the store let you down badly and urgently needed to fix your problem.

I got in touch with the Managing Director of the company and he promised to investigate. He later sent me the email he’d sent to the relevant manager insisting that the problem get fixed urgently. He told me that they genuinely were having problems getting a replacement from their supplier. However this shouldn’t have inconvenienced you, it was their problem to solve.

I later heard that they invited you to the store and you chose an alternative bed? The MD later confided in me that he didn’t understand why the store manager hadn’t fixed it in the first place. I don’t know either but I’m glad that the situation is now fixed. Enjoy your bed!

Saturday 14 September 2013

Surrounded by thieves

Anyone who reads Mmegi will know that there seems to be an upsurge in crime recently. Even the Government has expressed concern. Armed robberies of stores, street-crime and home invasions, they all seem to be getting worse. It’s about time that we take greater efforts to protect ourselves and our communities. It’s also about time that we demand greater protection from those with the power to protect us.

But they’re not the only type of thieves that are threatening us. There are more highly-evolved species of thieves out there.

We recently received an email from a frightened reader. She said this:
“I am worried sick about my husband’s bank account because of these people X-FOREX, they are calling me everyday. I started communicating with them last week Tuesday and they asked me to give them the last 3 digit at the back of my ATM card and I told them that I don’t use Visa card, then he asked me if my husband doesn’t have a visa card. I told him yes he does and he said its okay because we use the same surname. I gave him the last three digits and the other long numbers in my husband's card. Immediately after 5 minutes he called and told me that there is no money and asked when he can check the money.

I was so shocked how he managed to access the account and tell me there is no money. Now he is been trying to call me since yesterday even today, but I have not taken his calls. Please help me because maybe they will try the account until they get something. I haven't told my husband yet. I am afraid.”
I was on the phone to her immediately suggesting that the moment we stopped talking she should call her bank and explain the situation. They would need to put a hold on the card to stop money being taken. She then would need to have a frank conversation with her husband.

I’ve been asked by many people about XForex, who ask if it’s connected to Eurextrade, the Ponzi scheme that collapsed in February. XForex is different, it offers the illusory opportunity to make money by trading foreign exchange but they neglect to mention that ordinary people rarely do so. The market is so volatile, the changes usually so slight and the companies like XForex so suspicious that we’re not going to make anything from it. Ask yourself this. If big commercial banks don’t make fortunes this way with the trillions they have to invest, how can ordinary people do so? The only people making money from Forex trading are the people recruiting more and more victims into Forex trading schemes.

Like Eurextrade, who recruited victims in fast food joints and by recruiting friends, colleagues and relatives, you can judge XForex by their recruitment techniques. XForex do it on Facebook by making ridiculous claims. One advert showed a picture of a room full of hundreds of scattered banknotes, announcing that “Mr.Baruti From Botswana Has Made $5024 From EUR/USD Trading Last Month!” It went on to say that “It Is So Easy To Make A Second Income! Take Your First Step In To a Wealthier Future!”

You can also judge the scheme by the story from the reader about XForex agents demanding to know people’s card numbers and security codes. XForex is what highly trained financial experts call hogwash. Their agents that abuse their victims like this are called thieves.

You’ve all heard of identity theft but did you know that companies can have their identity stolen as well as individuals?

We heard recently about two different companies “Campion Financial Service” and “Express Finance” that have approached people offering them loans at a mere 2.5% interest per year. What’s more both have offered to lend millions of Rand to the email recipients. All they need to do is send over their ID and the loan will be theirs.

Let’s face some hard facts. Real lenders don’t send out emails offering to lend money to total strangers. Real lenders have proper email addresses, not just free ones. Real lenders have landlines, not just cellphones. Real lenders don’t lend millions to people at a mere 2.5% interest per year.

The curious thing is that both of these companies actually exist. They’re both registered companies with authority (in South Africa) to lend money. But the emails aren’t from these companies, they’re from scammers pretending to be them. I called both of the real companies and they confirmed this. Some victims had traced the real companies and had learned the hard way that they had been scammed. I also called the scammers and it’s bizarre how they sounded distinctly West African rather than South African. Luckily we were able to prevent others falling victim to what is clearly an advance fee scam. Just before you get you multi-million Rand loan there’s a snag, some legal problem and they’ll need you to cough up some cash, that’s the “advance fee” they’re after. That’s what the scam is all about. If you are suckered and pay them they’ll then continue to squeeze more and more payments out of you until you either run out of money or realise you’ve been scammed.

The critical thing to understand is that not all thieves visit in the night. Not all thieves break in with a crowbar. Not all thieves try to steal your cellphone, wallet or your laptop. The more adventurous ones, the real experts, do their very best to steal everything you have from far away, using the internet and 3G connections.

Thieves, like all animals, gradually evolve due to environmental influences. Just as we evolved from earlier apes, scammers and thieves are evolving as well. I just hope we can evolve at least as fast as they can.

The Voice - Consumer's Voice

Dear Consumer’s Voice #1

Please assist me, I bought a product (Vaseline lotion 400ml) at a store on 3 September 2013 afternoon at value P37.95, only to find out this morning that they have an advert dated September 1-7, 2013 with the price of the same product at P24.95 and the promotion is valid from 19 August to 8th September 2013.

How may you guys help me.

Let’s count the number of ways in which this store has breached the Consumer Protection Regulations.

Section 13 (1) (e) of the Consumer Protection Regulations says that a "supplier who offers a commodity or service to a consumer fails to meet minimum standards and specifications if [...] the advertisement or representation of a commodity or service is made with the intent not to dispose of the commodity or service as advertised or represented."

Section 15 (1) (d) says that "A supplier of a commodity or of a service shall fail to meet minimum standards of performance if [...] the commodity or service is advertised with intent not to supply reasonably expected public demand, unless the advertisement discloses a limitation of quantity in immediate conjunction with the advertised commodity or service".

Section 17 (1) (a) says that "The following deceptive methods, acts or practices shall constitute acts of unfair business practice [...] making false or misleading statements of fact concerning the reasons for, existence of, or amounts of price reductions".

So at least three breaches of the Regulations. I suggest that you take the product back to the store and explain to them the error of their ways. If they don’t give you either a full refund or the difference in price then let me know!

Dear Consumer’s Voice #2

How legal or ethical is this? I applied for a store card, where you can just purchase goods and pay for them later. I met all criteria but my application was declined, the reason being I don’t have a credit history in any retail store. In short, I always buy "small things", furniture included, for cash. They do not consider how I serviced my car loans, mortgages and personal loans as they only use history from retail shops not financial institutions. It has been more than 10 years since I became financially independent. They are not willing to be the first ones to start my "credit" history. Can I get any help anywhere??

This isn’t the first time we’ve heard this. People with no history of bad payments are denied credit because they don’t have any history at all. It’s one of the ironies of store credit that someone with a poor history is more likely to get credit than someone with none. Obviously stores prefer people with a good credit history but those like you who have been prudent and sensible are disadvantaged because of that.

However I think that you should rejoice to be disadvantaged and instead of applying this card you should continue to be prudent. Continue to avoid credit agreements and always avoid store cards. They might seem convenient but they’re a very expensive way of obtaining things.

By doing so you’ll also avoid the variety of deceptions that are so often associated with store credit. You’ll avoid the failure to show you the contract before you sign it, you’ll avoid the perils of repossession if things go wrong and you’ll avoid paying more than double the cash price of the item. Above all you’ll avoid the risk of financial ruin.

Maybe you should thank the store for helping you avoid all of this? It might be the best thing they could have done for you!

Tuesday 10 September 2013

More on "Divinenoni"

A couple of years ago a product called "Divinenoni" was being heavily marketed on Facebook. We were told that it was "Now available in Botswana" and that it could help us to feel young and stay healthy.

What was worrying is that it's proponents made a series of remarkable claims including that it was able to cure cancer and that it should be used INSTEAD of orthodox medicine. Dangerous stuff.

Unfortunately this bogus stuff is still around despite there being no real evidence that it does anything except cost you money.

A reader emailed us about it today:
Good morning, i would like to understand this Noni medicine as most of my colleagues are having it. It is said to be detoxifying so i googled it all to find a message from CONSUMER WATCHDOG, i hope to have not understood it. I think your message was that the sellers are over exaggarate what actually the medicine is doing. Is it worth purchase this product even when not sick maybe to detoxify your body or maybe to deal with issues of constipation???

I will be thankful for your advice.
This was my reply.
My feelings about the Divine Noni product are simple. Their claims are so extreme that you have to question the product and business in general. As you can see on the piece I wrote about it they have claimed in the past that it can cure cancer and that it should even be taken instead of real medicine. That's incredibly dangerous. Given that there is NO evidence for any of the claims they make I think you can safely assume that the products is of little or no value. What effects users might relate are almost certainly either confirmation bias, the placebo effect or just wishful thinking.

Also there's the issue of "detoxification" as a whole. The detox industry is, I'm afraid, based on a lie. The lie is that products can remove toxins from your body. Your body is perfectly well equipped to remove toxins itself, so long as you eat healthily and drink lots of water. The detox industry exists for one purpose only: to sell products, mis-educate consumers into buying worthless products and to make lots and lots of money. See the entry on the Skeptic's Dictionary about detox therapies for more background.

Please don't waste your time and money on products that don't actually do anything and about which miraculous claims are made. Instead spend the money on fresh fruit! it even tastes better I'm told.

Sunday 8 September 2013

The Abortion Clinic - Action, better late than never?

We reported on The Abortion Clinic, the South African pedlars of probably fake abortion pills as far back as April this year.

This crook claims to be selling Misoprostol, a heavy-duty "morning after" pill. Misoprostol is not something you fool around with. According to RxList Misoprostol (also known as Cytotec) is heavy-duty material and in a large warning says:
He offers to deal with "un wanted pregnancies,womb cleaning in a private enviornment". It didn't take much work to establish that he's not a real doctor at all. He's a traditional quack.

According to reports in the Sunday Standard today it seems like the forces of Law and Order have finally caught up and are taking an interest.

Sorry if this sounds pompous and gloating it's not meant to, but we told the authorities about this in April. You heard it here first.

Better late than never?

Saturday 7 September 2013

Ask questions

I was taught that in business there are no stupid questions. There are plenty of stupid answers but rarely a stupid question.

I was taught this because I was in a job where my primarily responsibility was to understand certain parts of our clients’ businesses. Only when I had a proper understanding could I possibly be expected to suggest things to them, identify weaknesses and come up with ideas to make things better.

But that occasionally required some stupid questions. Why, I once had to ask, do you have an unwritten rule that you only recruit people who went to this groups of schools but never from that group of schools? The answer was that the first group were known to be Protestant schools, the latter were Roman Catholic. This particular wing of this international company didn’t like Catholics. Guess which country that was?

One much closer to home involved the number of meetings we were having during a project. Why, I asked repeatedly, am I being invited to so many meetings? Most of the time I have nothing to contribute. I eventually discovered that it wasn’t my popularity, it was that I was the only member of the team that wasn’t actually employed by this organisation. I was an outsider. This organisation’s rules stated that if I was present at the meeting they were entitled to order refreshments. No me, no biscuits. My resulting unpopularity, when I started to refuse the meeting requests, was luckily short-lived.

More often than not the answers aren’t that specific. I’ve lost count of the number of times I’ve asked managers of a company why they do something only to be told either “We’ve always done it that way” or, more often, “I’ve no idea”.

The problem all organisations face is that decisions were often taken in the past without any record of why they were taken. Usually the person who decided has long since left and their legacy was one of ignorance.

More importantly consumers should be asking questions of suppliers. Questions like “Can I see a copy of the contract before I’m asked to sign it?”, “Can I take it home to show my Mum before I sign it?” and “Why have you printed it in such small characters and do you have a magnifying glass I can borrow?”

The problem is that consumers don’t always know the questions they should be asking. Most of us aren’t experts in complex areas like banking, insurance, credit and technology so it’s very easy for salespeople to confuse us with technical language. Or sometimes just language that is deliberately pompous. I saw recently a letter from an insurance company that demanded that the victim of an accident in a supermarket “let us have your quantum of damages for consideration”. Seriously. I’m sure you know as well as I do what “quantum” means but does everyone?

Luckily the law provides us with some protection. The Consumer Protection Regulations forbid suppliers from “taking advantage of a consumer's inability reasonably to protect his interests by
reason of disability, illiteracy or inability to understand the language of an agreement presented by the other party to the transaction who knows or reasonably should know of the consumer's inability”. In other words, don’t use unnecessarily complicated language.

Another part of the Regulations forbids suppliers from “causing a probability of confusion or of misunderstanding as to the legal rights, obligations, or remedies of a party to a transaction”. Think store credit agreements. How many of them actually explain what happens if you have problems with your repayments? How many of them explain what will happen if your goods are repossessed? How many of them explain what will happen if the goods are faulty or never actually delivered? None of them of course.

So it’s up to us to ask questions before we sign anything.

Just as importantly we should be asking more and more questions of the regulators. I know there are some that do a good job despite the challenges they face, regulators like NBFIRA, the Bureau of Standards and BOTA, but many others are sleeping on the job. They have awesome powers to control their areas but seem to lack the willingness to get their hands dirty.

We should be asking the others, the ones with the power to stop pyramid schemes, Ponzi schemes, foreign exchange schemes and all those suspicious “We’ll teach you how to trade on the stock market” schemes, what they’re doing to protect us because at the moment it looks like they’re doing nothing at all.

Here’s another question we should be asking.

What do you think about your bank?

We're about to start a MAJOR survey on banking in Botswana. The time has come to ask bank customers what they think about their bank, what they like, what they dislike, what they can improve. To do this we need volunteers to share their feelings with us, as many of you as possible. The more data we get, the more convincing the results will be. The more convincing the results are, the more the banks will be forced to take notice.

If you can spare 15 minutes we'd like to interview you over the phone, any time of day or night, in your office, at home, in the bath, wherever you feel most comfortable. Email us your name, which banks you bank with and the phone number we can use to call you on. Please also say what time of day is best for you. If you can "volunteer" your friends or relatives (please ask them first) that's even better.

What's more, everyone who volunteers and who is interviewed will enter a competition and stands to win a prize. We can't afford anything too extravagant but there'll be Consumer Watchdog pens, t-shirts, even some restaurant vouchers.

If you can spare the time email us your details to and we’ll be in touch. This is your chance to be part of a step towards improving the service they give us in return for all the money they take from us.

The Voice - Consumer's Voice

Dear Consumer’s Voice #1

I just saw your column in The Voice and I was shocked.

I am worried sick about my husband’s bank account because of these people X-FOREX, they are calling me everyday. I started communicating with them last week Tuesday and they asked me to give them the last 3 digit at the back of my ATM card and I told them that I don’t use Visa card, then he asked me if my husband doesn’t have a visa card. I told him yes he does and he said its okay because we use the same surname. I gave him the last three digits and the other long numbers in my husband's card. Immediately after 5 minutes he called and told me that there is no money and asked when he can check the money.

I was so shocked how he managed to access the account and tell me there is no money. Now he is been trying to call me since yesterday even today, but I have not taken his calls. Please help me because maybe they will try the account until they get something. I haven't told my husband yet. I am afraid.

I called this reader as soon as I received this message and my advice was simple. She must call her bank IMMEDIATELY and warn them that husband’s card had been compromised. She then has to have a frank conversation with her husband and tell him what she’s done.

I mentioned XForex a couple of weeks ago. They claim to be able to help people make fortunes by trading foreign exchange but that facts are simple. It’s simply not possible.

Their behavior in this case is further evidence that they can’t be trusted. Please stay far, far away from XForex and anyone who says you can make loads of quick money either with Forex or the stock market.

Dear Consumer’s Voice #2

We heard about another fake loan company this week. This time a company calling itself “Campion Financial Service (Pty) Ltd” wrote to a reader offering a fantastic loan opportunity. They claimed that they had “offered Loans in excess of R50,000,000.00 in our 9years of existence”. They said that our reader could borrow anything from R10,000 to R5 million over periods varying from 6 months to 10 years “at incredible interest rate of 2.5% per annum”.

Incredible indeed. It’s incredible for a number of reasons. Firstly real lenders don’t send out emails blindly offering to lend money to total strangers. Real lenders don’t do everything by email and have proper email addresses, not ones that are based in Thailand. Real lenders have landlines, not just cellphones. Real lenders don’t lend millions to people at a mere 2.5% interest per year.

It’s obviously an advance fee scam but this particular scammer is as clever as the one we featured last week in The Voice. There really is a company called Campion Financial Services in South Africa, a genuine lender that’s a real company, with a real office and phone lines and is even registered with the necessary regulatory bodies. But this letter is nothing to do with the real company. I know because I called the real company and asked.

Just for fun I called the scammer on his cellphone. Like all scammers I’ve spoken to it took him a while to realise that didn’t believe a word he was saying. He seemed genuinely confused when I suggested that he was a liar and a cheat. When I pointed out that I’d spoken to the real Campion Financial Services he just hung up.

So the lesson is simple. Don’t ever trust anyone who approaches you out of the blue offering money. But I think you knew that already, didn’t you?

Sunday 1 September 2013

Store credit - what are they hiding?

We all know that store credit is a dangerous business, dangerous for consumers and not the stores that offer it. One of the key dangers is the secrecy surrounding the agreements that customers sign with the stores.

We found a few months ago that not a single store was prepared to allow potential customers to read their credit agreement before they were required to sign it. Clearly they don't want people to know what the agreement say.

So this is what we need.

Will you send us a copy of any credit agreement you've signed in the last couple of years? It'll be entirely confidential and just for our information.

Either email a copy to or fax it to +267 3911763.

Why Zeek Rewards Was Such a Successful Scam, by Kasey Chang

"Why Zeek Rewards Was Such a Successful Scam"

An excellent piece on the psychology of scam victimhood by Kasey Chang, the MLM Skeptic.

It's specific to the Zeek Rewards Ponzi scheme that was shut down by the US Securities and Exchange Commission last year but the ideas are universal.

Read it and learn.