Sunday 27 November 2016

Is the cheapest really the cheapest?

We all love a bargain, a discount or a special deal. Anyone who doesn’t love a bargain clearly has too much money.

But what exactly is a bargain? Is the cheapest product always as cheap as you’d think?

Here’s an example. Whenever you’re buying a computer in a store, please don’t ever buy the cheapest. The cheapest is going to be that way because sacrifices have been made. It will lack power, storage, memory and a decent keyboard. By the way, that’s the most important thing with any laptop. They keyboard.

The same goes for wine, cars and cellphones. If you’re short of cash it’s better to wait a few weeks, save a little extra and buy the model one above the cheapest. You’ll be surprised how much extra you’ll get from spending just a little extra. You’ll also be surprised how much you’ll save in the long run.

Last week someone posted a celebration in the Consumer Watchdog Facebook group. They said:
“If you are looking to buy your phone from a company that does not give you a hassle over honouring the warranty, I recommend The Cellphone Warehouse. Fantastic service.”
That was nice but a later comment impressed me more. Another member of the group commented:
“But their prices though but i guess thats the cost of good service.”
That’s a remarkably important idea. Their prices might be higher than some of their competitors but it’s money well spent because of what that extra money buys. It buys better service, the assurance that a warranty is certainly going to be honored and the comfort that you’ll be treated with some respect. Those are things you don’t always get with other stores that sell things more cheaply.

Around the same time another member of the Facebook group commented about another cellphone store, one that doesn’t have quite the same reputation. Talking about the phone they’d bought cheaply and in which a factory fault soon emerged, they said they were told by the store that no refunds were possible and that “they kicked me out (physically)”. They heard later that the authorities have “a bunch of files” about the same store, who have apparently mistreated, short-changed and disrespected a number of other people. That’s often what you get when you buy the cheapest.

But is it even the cheapest? Like a number of stores this particular one doesn’t always offer the full manufacturer’s warranty that should come with any purchase, presumably because they’re selling “grey imports”. These are products that have been bought from another part of the world and brought to Botswana, a country where the manufacturer’s warranty doesn’t apply. That’s why you’ll often see products made by respectable companies such as Samsung but which are sold with only a three-month warranty when Samsung would normally offer a warranty for at least a year. That means that if you buy such a phone and it goes wrong after just four months, you’re not going to get any help from anyone, not even Samsung. You’ll need to buy a brand new phone.

That cheap phone isn’t so cheap any longer, is it?

Here’s a free tip for you. Instead of buying the cheapest possible cellphone from a potentially shady store, why not consider buying a second-hand cellphone instead? There are several Facebook groups dedicated specifically to exactly that business. Why not save yourself a lot of money and get a phone that’s maybe a year old but for a fraction of the price you’d pay from a store. And if you were tempted to get your new phone from a shady, grey import store anyway, what do you have to lose?

The same goes for cars. A number of organizations in Botswana have learned the hard way that buying cheap vehicles isn’t actually the cheapest way to supply their fleets. I know of two that decided to replenish their fleets by buying the cheapest possible vehicles. They saved some money that year but overlooked the fact that these vehicles came with just a one-year warranty, unlike the more expensive alternatives that came with warranties and maintenance plans that lasted five and sometimes seven years. Not only did those plans offer free maintenance, they also gave a clue about how long the vehicles might last. A warranty is also a statement of confidence in the solidity and reliability of a vehicle. A manufacturer that sells vehicles with a five-year warranty is presumably fairly certain that the vehicles will actually last that long. Those companies spent a lot of money but now have parking lots full of dead vehicles they can’t afford to repair.

If you do the maths with either cellphones or vehicles the lesson is quite clear. The cheapest to buy is rarely the cheapest to own. The difference is when you spend the money. The more expensive items are paid for up front, the cheaper ones you have to pay for over and over again.

Accountants describe this as “total cost of ownership” which Investopedia defines as follows:
“Total cost of ownership (TCO) is the purchase price of an asset plus the costs of operation. When choosing among alternatives in a purchasing decision, buyers should look not just at an item's short-term price, which is its purchase price, but also at its long-term price, which is its total cost of ownership. The item with the lower total cost of ownership is the better value in the long run.”
That’s what you should look at whenever you buy anything significant. What will it cost you over its entire lifespan, not just when you hand over the money.

So don’t be cheap. Being cheap is often really expensive.

The Voice - Consumer's Voice

Help me with my phone!

I bought a phone from a store at BBS last year in May and after 4 months it starts to freeze and is no longer working but I'm still paying. They gave me the other one but that isn’t working also. I need your help please.

Firstly, I celebrate you for continuing to pay your instalments. Many people in this sort of situation stop making the payments and trust me, that’s the worst possible thing you can do. If you stop paying the store is entitled to repossess your goods but don’t think that means you stop owing them money. After they auction the goods for a fraction of their original price you’ll find yourself still owing almost the same amount as well as penalties, interest and legal fees. Whatever you do, never stop paying your hire purchase payments, no matter how tempting it might be.

Meanwhile I’m not sure you shared the full story. I contacted the store management and they gave me some additional details you forgot to mention. Firstly, the store had replaced the original phone that went wrong with a brand new phone. It was that phone that later also went wrong. However, that second phone went wrong more than a year after you bought the first one, after the warranty had expired. Remember that the warranty on something like a phone lasts a year from the date you bought the phone, not from the date you were given a replacement. It means that if a store offers you a brand new replacement phone 364 days after you bought the original, the warranty only lasts for another day.

Also you didn’t mention that you’d taken the second phone to a “bush repairer” who tried to get it working again. Even if the phone had still been under warranty this would have invalidated the warranty.

Sorry that I don’t have better news for you but the store isn’t obliged to do anything for you this time.

Where’s my refund?

Recently I lodged in a certain lodge in Maun and paid for six days in advance as accommodation fees. I only happened to stay for four days and I have to go through a lot of torturing because the lodge is taking long to refund me. Its been a month and five days now as I am being tossed from one pillar to the next. To add salt to the injury, the monies belong to the government (imprest) and I was supposed to have retired it at least 14 days after the trip ended. As is procedure, the government will now resort to refunding herself using my own money and this will not put me in good light as I appear to have used the monies for other things.

The hotel manager had told me that I write a letter requesting for my refund which she kept for two weeks only to inform me that the letter could have been written by my bosses. I asked her why it took her long to inform me about that and only said she is sorry about what happened. Now I have a feeling that the lodge is not willing to refund the monies back.

You’re being thoroughly let down by this hotel manager and I think it has to stop. I think you need to contact the manager and give her a deadline. Make it a short one. I suggest you give her three days to refund you directly to your bank account in full. Point out to her that if she doesn’t do this you will take legal action against her without hesitation. In fact, you’ll need to allow her 14 days to make the payment but don’t tell her that. After that 14 day period you can go to the Small Claims Court for an order against the lodge.

You should also demand that she writes your employer a letter explaining that it’s not been your fault that you haven’t been able to retire your imprest as promptly as you should have done.

I think you should also write a formal letter of complaint to the lodge management and copy that to your employer, Consumer Watchdog and the Botswana Tourism Organisation. If the lodge suspects they might lose all that valuable government business they might reconsider their approach. You might even encourage them to improve the service they offer in future.

Wednesday 23 November 2016

Bitcoin and the Bitclub Network - one is a scam

Bitcoin logo.svg
Bitcoin. That's been the big issue for us this week. So many people have been in touch asking if it's a scam, should they get involved, is it risky?

The simple answers are No, Maybe and Yes, in that order.

So what is Bitcoin?

That's simple to answer but perhaps hard to understand. Bitcoin is a currency, but not like any currency you've known before. It's a digital currency, other times called a virtual currency or a cryptocurrency. There are no coins or notes with Bitcoin, no bits of metal or paper. Nothing you can put in your wallet or purse. Bitcoins exist purely in cyberspace. It's online money.

And that confuses people. What confuses them more is the technology behind Bitcoin. Terms like "blockchain", "distributed ledger" and "Bitcoin mining" are hard to understand unless you're an expert. There's also the simple confusion that your money is "out there" somewhere and not in your pocket. That's odd.

The Blockchain and Bitcoin mining

A Bitcoin mining farm in Iceland. Source: Wikipedia
In fact the "out there" element is very new and innovative. The blockchain, which is a database of Bitcoin transactions that records and confirms every transaction ever performed between people using Bitcoin, is hosted all over the world, not in one place. The so-called Data Miners who run the computers on which the Blockchain is hosted can themselves earn Bitcoins by holding and verifying the transactions. That's something revolutionary.

However, it's important to know that the computing power required to do this is beyond individuals and can only really be achieved by "mining farms" with enormous processing power and energy consumption.


It's also confidential. It's currently extremely hard for banking and intelligence agencies to track the payments that are made using Bitcoin. They can't see that you're using it on the Dark web to buy drugs, guns or child pornography just like they can't see that you're buying your kid's Christmas presents or a plane ticket with it.

Despite all this, I'm fairly certain that Bitcoin or something like it might be the future. Many of us already use international online payment systems such as Paypal and Apple Pay and local money transfer services like eWallet, MyZaka and Orange Money but they're all based on a currency that we know. Bitcoin is a step further. Not only is it an online payment mechanism but it's its own currency.

So it's real. It's legitimate. It's not a scam.

The risks

But it's still highly risky.

Bitcoin is still remarkably new and even financial experts have no idea of what it's future will be. Some are already saying its days may be numbered.

What's more, and despite what some proponents are saying, its value can easily go down as well as up. If you bought Bitcoins in November 2013 you would have lost 78% of your "investment" by January 2015. Even today you would still be down by 24%.

Source: CoinDesk
I admit I've chosen the highest and lowest values but my point is that it's volatile. Yes, all currencies are volatile but Bitcoin is clearly even more volatile than most others.

Then there are security concerns. As we understand it now, the technology underpinning Bitcoin is highly secure but anyone who says that a particular security protocol is foolproof hasn't read their history books. All security technologies will be cracked or hacked sooner or later and if a flaw is ever discovered in Bitcoin's security mechanisms it would be valueless instantly. Say bye-bye to your money.

The fact that it's completely unregulated is another concern. If a conventional currency like the Pula, US dollar or Euro showed signs of failing, central banks would do something to support it. We've seen that happen before in various countries. But with Bitcoin, there's nobody out there to help you.

Another issue is that when you spend Bitcoins there are fewer payment protection mechanisms available to you. There are no rights to refunds and no chargeback mechanisms. In December 2013 the European Banking Authority warned consumers that:
"No specific regulatory protections exist that would cover you for losses if a platform that exchanges or holds your virtual currencies fails or goes out of business."
Should I buy Bitcoins?

I'm not saying that Bitcoin is a bad thing. On the contrary I'm very interested in it and think it's a sign of the future. But it's risky and before anyone buys Bitcoins they need to remember that they should only ever invest speculatively with spare money, money they can afford to lose. Do not buy Bitcoins with the money you need to pay your home loan, rent, food bills or school fees.

The scams

Then there are the scams.

Because so few of us know much about Bitcoin, but a lot of us have heard of it, we can easily be suckered by scammers trying to exploit is. Ponzi and pyramid schemes like MMM Global, Billcoin, Onecoin and Pipcoin have all pretended either to use Bitcoin or to be something like it. It's all been lies, designed to cheat you.

There are also schemes that are based on Bitcoin but are using scammer's tricks to get your money.

The Bitclub Network is a good example. They describe themselves as "The most innovative and lucrative way to earn Bitcoin" and they suggest that Bitcoin mining (see the explanation above) is a way to make money.

They go on to say that "With BitClub Network you earn daily profits from our shared mining pools. We also have a referral program so you can get paid for anyone you refer."

Various people have issued warnings that Bitclub Network is either a pyramid scheme or a Ponzi scheme. One promoter of the scheme described the business model like this:

What does that look like to you?

The conclusion

Bitcoin and the technology it uses are fascinating. However it's no more than a currency, it's not an investment scheme. If anyone tells you otherwise and encourages you to start buying Bitcoins or to join a scheme like Bitclub Network, saying you can make lots of money, ask yourself this simple question. How do they benefit from me joining?

The chances are that they're trying to make money from you, not promote the future of money.

Saturday 19 November 2016

More denial

I’ve warned people several times recently, both in the print press but also on the radio and on social media about a pyramid scheme calling itself Helping Hands International. They describe themselves as “an empowerment-based- membership program, a global opportunity born out of the passion for total human capacity development and for helping the less privileged”. They claim that joining their scheme will allow you to “achieve all your dreams” and receive “financial freedom”, “passive income, business grants, brand new cars, laptops/iPad, house of your own, all expenses paid trip abroad”, the list goes on and on, culminating in “residual income for life”.

Despite my best efforts, I can’t find any clue as to how any of these things can be achieved. Do they have any products to sell? Multi-Level Marketing companies like Amway sell household products and Herbalife sell “health” products (although it’s cheaper and healthier just to buy yourself some oranges) but with Helping Hands International there’s nothing. They sell nothing but illusions of wealth and prosperity. In fact, in a discussion on Facebook, one of their representatives offered a number of questions and answers that tell the whole story.

One of the questions was
“When I sign up, do I need to sell any goods like other MLM companies?”
The answer was very telling:
“No. We don’t sell any goods.”
Helping Hands International is a pyramid scheme. It has no products and the business model is entirely based on recruiting people beneath you and them recruiting people beneath them with the promise of money magically flowing up the pyramid in your direction. That’s a pyramid scheme.

Another of the questions that the representative posed was this: “Is there any reputable organization in support of” Helping Hands International? Their answer was remarkable. They claim that they’ve “been recognized by the United Nations for the incredible charity works they have been doing across the globe” and that they are sponsored by Apple, HP and Hyundai.

This a lie. A flagrant lie. It’s simply untrue. The UN and companies like Apple, HP and Hyundai don’t “sponsor” scams like Helping Hands International. They haven’t, they don’t and they never will.

I mentioned this on the radio as well as in Mmegi and on Facebook, doing my best to warn people before they committed themselves. Hopefully some people heard and will have contained their urge to throw away their money. But not everyone was convinced. Very quickly I started to get messages on Facebook from people who had already joined or were themselves actively trying to recruit others. One of them was very angry with me. He did his best to convince me that the scheme was legitimate, saying that if only I joined I’d see the benefits. So I asked him about his personal experience. Was he really making money? Yes, he said, he certainly was. How much had he made? Just how much was this fortune he said he was making from the scheme?


Yes, just eighty Pula. That’s all he’d made so far. And how much had he “invested” to earn this fortune?


We then had a lengthy online argument, with him convinced that he was now up by P80 and me suggesting that in fact he was down by P420. Obviously I’m going to say that I’m right and he’s wrong but I do think the evidence is on my side. Helping Hands International is a scheme with no products to buy or sell and several of the people involved have confirmed that new money comes just from other people joining the scheme in multiple layers beneath them. That’s the definition of a pyramid scheme. Sooner or later, like all other pyramid schemes, they’ll exhaust the supply of gullible victims and the new money will dry up. That’s when a whole lot of people will suddenly realise that they’ve given away their money and that the scammers who run pyramid schemes don’t offer refunds.

I had an almost identical conversation with someone during the Eurextrade Ponzi scheme. Someone who had “invested” in Eurextrade, hoping to earn the promised 2.9% interest per day that they offered. He was furious that I’d warned people not to join, saying that they would never earn such profits and they’d almost certainly lose everything they handed over. He told me the same story. He’d earned P3,000 from the scheme and was convinced he was going to make a lot more. I asked how much he’s paid them to get this money. P10,000, he said. Again we had a long discussion about whether he now had P13,000 or had just lost P7,000. As it turned out, I was right.

People like these are angry because anyone who tries to persuade people not to join a scheme like these is threatening their potential income. Deep down, they know that they can only make money when new people join their scheme and anyone who tries to stop this will threaten that. They’ll continue telling people that there’s some miraculous, magical thing happening behind the scenes to make more money but they know in their hearts that it’s a scam. They just can’t face the truth. If they did they’d have to admit that they’d done something obviously silly that is likely to cost them a lot of money.

The tragedy is that when people are experience that level of denial, there’s very little you can do to persuade them of the truth. That’s why so many otherwise rational, reasonable and intelligent people fell for Ponzi schemes like Eurextrade, Monitec Society and now Billcoin. It’s why others fell for pyramid schemes like TVI Express, World Ventures and now Helping Hands International.

It’s why we need to get to people before they join and before they enter the denial phase. It’s why we need to educate people enough so they don’t fall for them in the first place.

The Voice - Consumer's Voice

Is Hansford University legitimate?

I would like to know from your agency if you could help me to confirm that Hansford University is a fake or not. Thanks a lot.

I first looked at Hansford “University” in 2013 when another reader asked whether they were a legitimate university. It was very clear, very quickly that they weren’t. Not even slightly legit.

I visited their web site and had an online chat with one of the “advisors” who called himself Jason Brown. I said I was interested in getting a Bachelors degree in Nursing, or as they spell it, "NUSRSING". I told him that I needed to get the degree as quickly as possible in order to get a promotion and I asked how quickly I could get such a qualification. I told him that my only experience in a hospital had been five years as a cleaner.

“You can get in 2 weeks”, he said.

All I needed to do to get a degree in Nursing from this bogus university was to pay them $199. Do they have any idea how dangerous that is? That they’ll sell a fake degree in Nursing to a total stranger who may then get a job based on that qualification? Someone whose only experience was as a cleaner? Someone with no actual skills in nursing at all? Someone who might then end up in a hospital ward responsible for people’s health? Someone to whom we would entrust the welfare, health and life of our loved ones?

Hansford “University” is a criminally reckless, bogus and fake establishment that is selling illegal certificates that have precisely no value. Please don’t be tempted ever to buy one because you will then be as criminal as they are. Remember that if you get a job or a promotion based on a fake qualification you can not only be fired, but you can be prosecuted as well. Are the disgrace, embarrassment, unemployment and a prison sentence really worth the risk?

When will I get my refund?

On the 15 October 2016 I went to a hotel in Mogoditshane to book a venue for my daughter' s birthday. I paid P2,500 for the venue, and because my daughter liked the venue, I asked them not to change when somebody comes with more money. They promised that it is first come first serve basis. On the 3 Nov they called me and said they have changed the venue since they are renovating, and I asked if they didn't know when they took my money, and they said they thought they would have finished. On 6th November I took my daughter to go and see the new venue, she did not like it. I also learnt that they moved us so that they can host another client whose party cost more I believe. I demanded my money back and they promised to credit my account that day.

To my disappointment the hotel hasn't refunded me yet. I asked them what if it was me cancelling and they said there could be charges. I am now wondering if I should not sue them for inconvenience.

The other thing is I want to shame then on Facebook, is it ok to do so??

Firstly, let’s talk about Facebook. I’m not really a believer in “shaming” people or organizations. However there’s every reason to report the situation so that other people can learn from it. So long as what you say is 100% truthful, you have every right to do so. That’s what the Consumer Watchdog Facebook group is there for.

This hotel has obviously mistreated you badly and you clearly have a right to a complete refund as well as an apology. They broke their contract with you when they changed the venue so drastically that your daughter no longer liked it. They also broke their agreement with you when they moved you to another room.

Then there’s the Consumer Protection Regulations. The room you saw and agreed to hire was not the one they ended up offering you. The hotel therefore broke Section 13 (1) (a) of the Regulations when they offered you a room that “does not match any sample or description given to the consumer”. Then, by “failing to promptly restore to the consumer entitled to it a deposit” they’ve broken Section 15 (1) (e).

We’ll get in touch with the hotel for you and see if we can’t encourage them to speed up a little bit. That’s not too much to ask, is it?

Saturday 12 November 2016

The science of service

I love science. It was science that rid the world of smallpox. Science helped us dramatically reduce avoidable deaths and disability from dreaded diseases such as polio, measles and TB. It was science that brought us anti-retroviral drugs and helped us reduce mother-to-child transmission of HIV. It’s science that will soon rid the world of malaria.

It was also science that gave us the internet and the communications revolution. It gave us all greater access to information, knowledge and education. It allowed us to communicate with our friends and family no matter how far away they might be. It was the same progress that gave us the Kardashians, selfies and village sex tapes.

Ok, so it hasn’t all been good but that’s the nature of progress. Some of the things it brings are good, others not so good. Almost always, despite what the pessimists say, the good outweighs the negative.

One of the best aspects of science is the knowledge it bring us, knowledge that we can then use to make our lives or our businesses more successful.

We spoke to a company recently who have a wide range of products, all of a technological nature and the number of facts and figures they offer is astounding. Every option has a name, a price, amounts and timescales and if you count them all there must be at least a hundred different facts and figures that customers need to recollect and understand if they’re going to make a rational decision. But of course they can’t, nobody can remember that amount of detail, and that’s why their customers are often so confused and take the wrong decision. Then they get upset and angry when they realize they made a bad choice.

In 1956 an article by the psychologist George Miller was published in Psychological Review entitled “The Magical Number Seven, Plus or Minus Two: Some Limits on Our Capacity for Processing Information”. Put very simply the article suggested that based on Miller’s research, the evidence suggests that the human mind can hold roughly seven things in its working memory. Some of us can hold as many as nine, others perhaps just five but on average it’s seven. So how can this company expect their customers to process a hundred?

They can’t if they’re being realistic. What this means for the company is that their approach to selling their products must change. Instead of just listing all their products they need to understand their customer in much more detail. They need to assess their customers and their personal needs before they even start to mention the products they can offer. Only when they know what the customer needs should they start doing some “solution selling”, making sure that they don’t mention more than seven facts they need the customer to know. It means that instead of telling the customer about ten products they shouldn’t mention more than two. For each product they can mention its name, the price and the what it offers. There’s six things for them to remember. If they mention one more they’re running a risk.

Another more recent bit of research (272kB pdf download) conducted by Michael Lynn, showed how waiters can increase the tips they receive. While this sounds like it only benefits the waiters it also is a huge benefit to the restaurant that employs them. Customers pay good tips when they’re happy with the service they receive and they are much more likely to return to those places. A restaurant with well-tipped waiters is a restaurant that’s making money.

Some of the things Lynn suggested are simple and they increased the levels of tip just slightly, by 10% to 20%. They included writing the word “Thanks” on the bill or squatting down beside the customer as they spoke to them. Drawing a happy face on the bill increased the tip by 18% but only if the waiter was female. If a male waiter did it the tip actually went down by 14%.

Other ideas were even simpler. All a waiter had to do was introduce themselves and the tip would go up by 53%. If a waiter touched the customer on the shoulder for one and a half seconds the tip would increase by 42%, in particular when the customer is a woman.

That last one concerns me a bit. I don’t mind casual affection but there’s a very thin line between a polite contact and creepiness. I’m not sure I want restaurants telling their wait staff that it’s a good idea to go out there and start touching their customers. That way leads to waiters being taken away by the cops.

However, the single most effective thing a waiter can do to increase their tip is very simple indeed. Smile. The research showed that waiters who smiled at the customers increased their tips by 140%. So the secret to getting good tips is actually quite simple. Smile at your customers, crouch down so you’re at the same eye level as them, write thanks or a smiley face on the bill (if you’re a woman) and then smile some more and your tips will increase dramatically.

But it’s not just wait staff who can learn from this. Even if you’re in an industry where tipping doesn’t happen, such as in a bank, an insurance company or a government office, you can make your customers happier by doing all of these things. Why wouldn’t you want to do that? Remember that happiness is infectious.

Science is a wonderful thing but its astounding achievements in curing disease, extending our lives and making us happier aren’t the only ways it can help us. It can help us make more money by showing us how we can make happier, higher spending and more loyal customers.

The Voice - Consumer's Voice

Have I really won a P1 billion tender?

Please check for me if this is genuine. I'm dealing with people I have never met in South Sudan and they want to give me HUGE amount of money for a Government of South Sudan contract. The contract is to supply them with 500 Toyota vehicles.

I first saw their advert of open tender on internet and I applied later after three weeks they responded by sending some of the documents I have sent you on email. Please help as I want to know if this contract is real. So far I have not send any money to them as we agreed that they should register the company for me in South Sudan and I will pay them later when we sign contract in South Sudan.

There’s no doubt about it. This is a scam. The clues are all there if you look for them. Firstly, there’s the quality of the language they use. The official language of South Sudan is English so don’t you think officials there would either know how to spell “Associations” in official documents or that their computer’s spell checker would do that for them? Do you really think that the Director of Procurement in the South Sudanese President’s Office would write things like “There are no much procedure and condition attached”?

Then there are some practical issues. Why would the South Sudanese government want to buy Toyotas from Botswana instead of directly from Toyota in Japan? Or even from one of the existing Toyota dealers in neighboring countries like Uganda? Who would want to transport 500 vehicles an extra 4,500km from landlocked Botswana to South Sudan rather than 1,000km from the nearest port in Kenya?

Finally, and I don’t mean to be rude, but why on earth would they choose to give a deal they say is worth $88 million, almost P1 billion, to you? What qualifies you to take on a deal that enormous?

This is all part of an advance fee scam. Very soon, probably just before you think they’re going to send you the 70% up-front payment they promised, they’ll demand that you pay them some money in advance. They’ll probably say it’s a legal fee, a tax or the cost of establishing your company. Whatever it is, that’s what the whole deal is about, that “advance fee” they want you to pay them. Of course if you pay it they’ll know you’re a sucker and there will be a series of further payments they’ll demand from you. That will continue until you either realize you’ve being scammed or you run out of money.

Please just delete the emails and don’t waste any more of your time and effort.

What’s the difference?

Can you explain the difference between a pyramid scheme and a ponzi scheme?

That’s a very good question. Firstly, because they are often confused and secondly because there are so many of them out there trying to steal our money.

A Ponzi scheme is a scam where people are invited to join and often promised massive profits but the little amounts they actually receive are simply taken from the joining fees of the people who join later. If I pay to join on Monday and you pay to join on Tuesday, I’ll be given a small fraction of your joining fee. You’ll then receive a small amount from the person who joins on Wednesday and so on. Eurextrade was a Ponzi scheme that hit Botswana a few years ago. Another called Billcoin is doing its best to recruit people right now. They promise amazing profits but the only money recruits actually receive (if anything) are tiny fractions of what they pay to join.

A pyramid scheme is slightly different and relies on recruiting layers of people beneath you. You’ll be encouraged to recruit people who will in turn try to recruit people beneath them. You might be encouraged to recruit five people and they’ll each try to recruit five of their own. After just two generations there’ll be 25 people, 125 in the third, then 625and if it was to reach ten “generations” there would be over 12 million recruits in your pyramid. If every one of those recruits paid to join and you get paid for each of them, you’ll be rich. That’s clearly nonsense but that’s how these schemes entice people. They talk about “passive income”, implying that once you start the recruitment process you can just sit back and watch the money coming in. Most importantly, despite the claims of pyramid schemes like World Ventures, there’s either no actual products or there’s just worthless products at the heart of the business.

Then there are Multi-Level Marketing schemes. Imagine a pyramid scheme with some products and you’ll have MLMs like Amway and Herbalife. However, even though they have products their own figures show that the vast majority of MLM recruits make very small amounts, make nothing or even make a net loss. My advice? Avoid them all.

Thursday 10 November 2016

Consumer Alert: Helping Hands International



9th November 2016

Consumer Alert: Helping Hands International

Consumer Watchdog would like to alert consumers about Helping Hands International, a pyramid scheme actively trying to recruit victims in Botswana.

The proponents of Helping Hands International describe the scheme as a “non governmental organization” attempting to “empower the less privileged people and orphanage homes”. They also claim that joining the scheme will offer “passive income”, new cars, laptops, a “house of your own”, free trips abroad, loans of up to P500,000, scholarships and “residual income for life”.

However, their marketing material states very clearly that recruits are not required to buy or sell any products, saying that there is “no buying of stock” and “no selling”. All that is required is for new recruits to enlist multiple layers of people beneath them.

Helping Hands International is clearly a pyramid scheme. A pyramid scheme is defined as a mechanism in which any earnings come entirely or primarily from the recruitment of other people and not from the sale of products. This describes Helping Hands International perfectly.

They also claim that the scheme is “supported” by companies such as Hyundai, Apple, HP and Lenovo but there is no evidence of this whatsoever.

Like all pyramid and Ponzi schemes Helping Hands International will eventually collapse, leaving its victims disappointed, embarrassed and poorer.

Consumer Watchdog urges everyone not to waste their time, energy and money in this illegal pyramid scheme.

If consumers are in any doubt they should contact Consumer Watchdog for free advice. We can be reached by phone on 3904582, by email at or by joining our Facebook group, Consumer Watchdog Botswana.

Saturday 5 November 2016

They're in denial

How many people involved in scams know that they’re scams?

Did the people recruited into Eurextrade know that it was a Ponzi scheme that would eventually collapse, leaving the victims penniless? Or were they all convinced that it was something genuine?

During the Eurextrade fiasco I came back to the office from a radio appearance when I’d mentioned Eurextrade and had warned people about the dangers it posed. Before I even sat down the phone rang and a call was put through to me from someone who had already “invested” in the scheme. He was very angry with me because of what I’d said. It wasn’t true, he said. He’d made a profit from the money he’d given them. How much, I asked? P3,000.

So I asked him how much he had deposited in order to make that amount. P10,000, he told me.

For the next fifteen minutes we argued about whether he was P3,000 in profit, as he claimed, or whether he had just lost P7,000, as I suggested.

I think I was right. He certainly didn’t call again to correct me after the scheme collapsed, taking almost everyone’s money with it.

The same happened with Stock Market Direct, the stock market training program run by the sharp-suited and smooth-tongued Tony Samuels. Lots of people thought they were getting a great deal by paying vast amounts to SMD every month for training and trading tips, even though the tips actually came from a (legitimate) South African company who sold them for a quarter of the price SMD offered them for. I heard from many people who felt they were on to a good thing and were going to make lots of money.

But that wasn’t true either. Tony Samuels was last seen heading for the border with several million Pula from his victims. Incidentally, even though many people met him, there’s no evidence that Tony Samuels actually existed. Yes, someone with a nice suit existed, but nobody knows his real name and it doesn’t seem to have been Tony or Antonio Samuels.

But how many of the people involved knew what was really going on with Stock Market Direct, Eurextrade and all the other scams like TVI Express and Success University? Certainly the organizers were the guilty ones and they knew they were running a scam. But what about the people they’d recruited?

Some clearly had no idea. They’d been seduced by the offers of riches and a better lifestyle. A lot of them genuinely believed what they’d been told was true. Gullible, naïve, perhaps even foolish but innocent nevertheless.

But then there’s are groups between the guilty and innocent. There’s a number of people who aren’t sure it’s a scam but they think that they’re special cases. A small number are convinced that if they join early enough they might be part of that very small proportion who make a little profit. Another group feel that they possess some superior knowledge about how these schemes work, often because they fell victim to an earlier scheme and now think they’re wiser and more learned as a result of that experience.

And then there’s the group that are in denial. This group have persuaded themselves that even though reason, logic and common sense say it’s a scam, they can’t face up to that fact and convince themselves that there’s still hope.

Last week I heard about perhaps the greatest case of denial I’ve encountered in a long time. Someone called our office to ask for advice about a younger relative. The younger guy’s mother had recently died and he had inherited not only her house but money as well. That was the source of the older relative’s concern. Apparently the younger guy had transferred the bulk of the inheritance overseas, claiming he’d been told about a remarkably lucrative investment opportunity. He’d shown some documents that had immediately worried the older guy. They didn’t look legitimate and he’d told the victim this. Nonsense, he was told, all I have to do is transfer some more money and they’ll give me vast returns.

So how much had he handed over so far? A few thousand Pula? Maybe more? Maybe tens of thousands? No. So far he had handed over eight hundred thousand Pula and he was about to hand over another three hundred thousand as well. The relative was even concerned that he might try and sell the house as well to raise further capital.

Tragically, the younger guy seems to be in complete denial. Of source it IS possible that he has invested the money wisely, but if that’s the case why is he keeping all the paperwork under lock and key and why won’t he discuss it any longer? What uncomfortable truth is he afraid to face?

In many ways the people in denial are harder to persuade that the gullible and naïve. The deniers have invested so much emotional energy and commitment into justifying their decision to themselves that they face what psychologists call cognitive dissonance, the intense mental discomfort involved in hold two contradictory positions. They simply can’t face the trauma of acknowledging that a smart person like them has made such an unwise decision. So they deny it completely. Like the guy who had lost P7,000, he had convinced himself that he was in profit by P3,000. Like the people who are currently “investing” in Billcoin, a Ponzi scheme that promises 80%, many of whom must realize that 80% per month is utterly impossible. They know it really, deep down, but they’re not prepared to admit that they might have made a mistake.

Which they most certainly have. The real tragedy is that they’ll refuse to acknowledge their mistake until it’s way too late and probably after they’ve thrown even more money, time and emotion into a large hole in the ground.

The Voice - Consumer's Voice

Mustn’t they help me?

I bought some stuff at a store at Rail Park Mall but after paying I moved to the door to take a very important phone call but from there I forgot to go back to the till. This was a Friday and the following Monday I went back to the store to find out if they can give me my items or they were aware of my situation. But they just told me to come back the following day when the person who was helping me is around. The next day the same thing happened and I gave up. My sincere question is why can’t they help me since they are part of the team and they should be accountable for everything that goes on inside the shop. This is terrible customer service.

I think you need to give the store a little slack. It’s not their fault that you left your purchases at the till because you were distracted by your very important call, is it?

I suggest that you talk to the store management again and politely ask if they can check their security camera footage to confirm your story about what happened. Most large supermarkets now have security camera systems that record almost everything that happens in the store and this is usually sufficiently high-quality even to see the money that changes hands. They should certainly be able to see your goods left behind at the till.

I think it’s also worth considering your question about whether the staff should “be accountable for everything that goes on inside the shop” as you suggest. Yes, I agree that the staff of a store and the management in particular should be held accountable for any mistakes they make but should they really be held accountable for fixing your mistakes as well?

Can I get my money back?

I bought a bedroom suite in 2007 on hire purchase, which I finished paying in 4 years. Just last year I was phoned by one of the workers and she told me I have over paid by P486 and I should come and claim the amount but this can only be done by of me using the money as a deposit for something in the shop or buying something worth that. I told them I don’t have anything to buy at the time coz I was still engaged in building myself a house and I asked if they can’t deposit the money into my account but they said its not in their policy. Just this year in May I went to the shop only to be told I can no longer claim the money because I took long to come and its like my money has expired. I was later referred to the manager who told me he can’t help me coz the shop have been bought by another company and I asked him where can I get help. He told me the only help that I can get is to call their boss in Gaborone. I asked if I should do that at my own expense he said yes.

I contacted the Manager and he told me I will be helped in a matter of 3 weeks but since then up to today I haven’t had any response. When I phone him he says he will get back to me but he never does. How can u help me???

Can this store get anything right or are they completely useless?

Firstly, the story that they can’t repay you the amount they overcharged you and that you can only use that amount as a deposit towards another purchase? It’s your money and they should just pay it directly into your bank. It’s only P486 so it’s hardly going to cause them hardship. It’s just nonsense.

It’s their policy to do this? Then their policy is nonsense. Policies are great things but they are there to HELP, not to get in the way of treating customers fairly. They’re not meant to be nonsense like this policy. However, I suspect this isn’t even their policy, someone just made that up on the spot because they couldn’t think of another reason to deny you your money. More nonsense.

And then they said that your claim had “expired”? Actually, don’t tell anyone I told you this but this might be true. Debts like this can expire from a legal perspective. After a few years your claim can be “prescribed”, meaning it has expired but that only refers to whether a court will hear the case and I doubt this store wants to get all legal with you over a few hundred bucks.

And if that’s not enough nonsense, they then told you that because the store had been taken over by another company the debt had disappeared? More complete nonsense. And finally they ignore you and don’t give your money? The final nonsense in a catolog of nonsense.

We’ll get in touch with the store and see if they want to continue behaving in such a nonsensical way or if they’d prefer to be sensible.