Tuesday 16 December 2014

Who can I trust?

Last week I wrote that while the Internet is fantastic, you can’t trust it.

I fully recognize that there’s a fundamental flaw in that statement. The Internet isn’t a thing that can be trusted or not trusted. Saying the Internet isn’t trustworthy is a bit like saying that the postal or telephone systems can’t be trusted. What matters is what is done with them. You wouldn’t blame BotswanaPost if someone sent you an insulting email or sent you a brochure for a service you didn’t want. Nor would you blame BTC if someone cold-called you in the evening trying to sell you a hotel discount scheme. It’s the people who publish material on the internet who can either be trusted or not.

The trouble is that the Internet is a breeding ground for crooks, charlatans, scammers and liars. The danger is that almost anyone, including amateurs like you and I can set up a web site selling our products, ideas or scams remarkably quickly and with virtually no cost.

You often see an example of this when you’re trying to research something on the web. Scams such as the Eurextrade Ponzi scheme and pyramid schemes like TVI Express all did their very best to make sure that if you Googled them the first few pages would only contain positive reports, forcing those of us who tried to criticize them to much further down the list. You can’t trust Google to give you the right results to a search.

However there are certain places on the Internet that I think you can trust. Places that offer reasonable, often skeptical advice on a range of issues.

The US Food and Drug Administration’s web site (fda.gov) can be a very good source of information, particularly on health products. Although it’s obviously centered on the US market some of their advisory notices are universal. For instance there is a page on the FDA site devoted to “False or Misleading Claims for Treating Autism” which is an area that has been populated by a number of dangerous charlatans in the last couple of decades. A variety of biased and unscrupulous people have spread a series of lies about autism, including the potentially fatal lie that vaccines can cause autism. This led to a catastrophic reduction in vaccination rates in some countries which even led to deaths. Children died of diseases that had almost been eradicated following mass vaccination campaigns and the vaccine deniers have their blood on their hands.

While this debate has raised people’s awareness of autism it has also led to an upsurge in bogus treatments for autism, several of which are mentioned on the FDA site. There’s also loads of advice about weight loss programs, dietary supplements, bogus cancer treatments and even the ridiculous SCIO or QXCI devices that people plug themselves into for miracle cures (yes, even in Botswana). It’s worth a visit.

I’ve only recently discovered the existence of the North American Securities Administrators Association (nasaa.org). This organization describes itself as “the oldest international organization devoted to investor protection” and consists of “67 state, provincial, and territorial securities administrators” throughout North America.

I heard of them when they issued a warning entitled “High-Yield Investment Programs - Don’t Get Roped In”. Eurextrade was an example of these HYIPs. It’s worth quoting from their warning.
“HYIPs are Ponzi schemes sold by unlicensed individuals. In the past, con artists relied on word of mouth to lure investors into these investments. Now they rely on the Internet and social media buzz to quickly popularize their schemes before the fraud is discovered.

The most notable characteristics of HYIPs are the promise of very high returns at little or no risk to the investor and the paying of referral fees to current investors for bringing in new investors. In this way, HYIPs blend elements of both Ponzi and traditional pyramid schemes into one scheme that can spread faster than ever before.”
That’s a perfect description of the Eurextrade scheme and also some of the others that followed it. The simple truth is that ALL such schemes, without exception, fail within a few years because the business model they use is flawed.

It’s not just the USA that has agencies prepared to educate and inform their constituents. The UK’s Financial Conduct Authority (fca.org.uk) and its predecessors have a long history of warning the public about shady investment schemes and scams. Australia’s Competition and Consumer Commission (accc.gov.au) has a web site full of advice and tips on how Aussies and the rest of us can protect themselves.

South Africa’s National Consumer Commission (nccsa.org.za) and National Credit Tribunal (thenct.org.za) are doing well online. The Tribunal’s site in particular has a long list of cases they’ve heard that make fascinating reading if you like legal rulings that have an impact on consumer rights.

Here in Botswana we’re not doing nearly as well. NBFIRA’s web site (nbfira.org.bw) has some advice in it but I think we deserve more. We want real life cases and rulings. The same goes for the Bank of Botswana site (bankofbotswana.bw) where I think we need a lot more advice and guidance.

There are also a few individuals who I think you can trust for advice. Kasey Chang’s MLM Skeptic site (amlmskeptic.blogspot.com), the BehindMLM site (behindmlm.com) and Patrick Pretty’s site (patrickpretty.com) are all excellent sources of information on multi-level marketing and pyramid schemes. Always check them before you even think about joining such a scheme.

And don’t forget that you can absolutely trust the Consumer Watchdog sites. Our blog, Facebook group and Twitter feed can be completely trusted, but then I would say that, wouldn’t I? Try it for yourself and see.

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