Pehchan CON?

Newspapers and television channels are rife with reports about several fraudsters raising money to the tune of crores of rupees from gullible investors, who have done the vanishing trick all to suddenly, leaving them in the lurch. Angry citizens appear on national channels, narrating their harrowing experiences – of how they had put in almost all their hard-earned, life-time savings – just to see it vanish overnight! The scamsters must be brought to book, and they must get back their investment, they demand.

How often have we come across reports of such “sudden disappearances”? How often have we read about the culprits being brought to book? More importantly, how many instances have we come across, wherein these hapless investors have been returned their invested amounts, let alone the promised interest?

Delving deeper into such episodes, one would not be surprised to find that thousands of investors had been lured to these schemes by the high returns – “double your money in 1 year”; “double in 6 months”; “earn interest @10% per month”! Investors must bear in mind that all such investment options, which are too good to be true are just that – too good to be true!

It is commonly observed that retired citizens, who depend on interest income are always under pressure to meet their expenses by taking risks of investing in avenues, where higher returns are promised. However, what gets overlooked, in the process, is that the background of the companies and business people behind the schemes are not even scrutinised or investigated! One is not suggesting that earning members do not fall into these traps. In fact, come to think of it, who does not want higher returns on their investments? Everyone loves such astronomical rates of returns!

What one fails to ask oneself is, “How do these schemes manage to offer such high rate of returns? How could the offering firm afford to shell out such high rates of return on investors and still make a profit for themselves? Which ethical business can give such high rates of returns?” A typical response to this question would be: “Why should I worry about that- isn’t it their problem? It is for them to worry about how to pay me or how they earn to pay me, isn’t it?”

Right? Wrong!

When I was offered such schemes in my younger days, I had tried risking a small sum, which I wouldn’t mind kissing goodbye – just to test the waters, if I may say so.
Sure enough, I lost more than I got by way of interest. Typically, these schemes pay promptly, initially. Their promptness for 3-4 months is enough to tempt one to invest more in that scheme. The agents are offered a hefty cut for bringing in the business – enough to rope in several “potential investors”, who, incidentally, happen to be your own kith and kin or close friends, as such schemes invariably depend on word-of-mouth publicity and it is we, who end up providing them with their next customer!

Often, the amount invested keeps way above the amount drawn, once lured into this high-yielding investment avenue. The lure to earn high returns borders on greed – or should we say transgresses it? Fortunately, (or unfortunately), I burnt my fingers before I could burn a big gaping hole in my bank balance, early in my life. Looking back at that episode, I asked myself, “How could they have ever given me such high returns – unless they were into some illicit businesses or had intended to garner huge sums only to disappear with the booty? Why did I not check the background of the owners of the company? Why didn’t i even check what business they were into and how their products fared in the marketplace?”

Soon, one learnt that these schemes come up once too often and there is no dearth of people who want to make a fast buck through high-yielding investments. It is not difficult to conclude that most of these schemes are designed to wind up leaving investors in the lurch! Even if there may be some with compelling business reasons to offer such high rates of interest to pull out of difficult deals/ phases of business, it is found that pulling out of their debt trap may be their last hope and in case of their failure, they would sink with all their investors – I mean us!

In case any of the readers may have different experiences and have made their riches from such schemes and may differ with my views, I would congratulate them – not for their business acumen or investment genius, but for their extra-ordinary blessings that make them rare (I am sure there are some). There are always exceptions to prove the rule - so one cannot rule out some successful investment avenues though i would avoid them too!

What is amazing is that even today, such schemes flourish and gullible investors place their faith and hard-earned monies into their schemes! Readers are advised to keep away from all kinds of such ‘high-return’ schemes. These schemes are our local Ponzi schemes, wherein money received from new investors are paid to older investors – their tenure is rather short - the moment fresh flows stop coming in, the promoters perform the vanishing act! Don’t invest small sums either – your small sums add up to a large booty for them – they could be involved in terrorism, drug trade, any illicit business that does not merit a lawful loan from a bank.

Pehchan CON!
It is easy to spot the conning offer coming your way – it is that unbelievable return on investment that, one dreams and hopes, was indeed true! You don’t have to experience the loss for yourself – learn from the mistakes of others in the past! You don’t need to know who defaulted or circulate their names and photographs to all your email contacts, once defrauded. You only have to keep in mind that if a high rate of return offer is coming your way, it could well be a CON! If one has a small sum to lose or spare, it is better to donate it for a good cause instead, I guess.

Blogger's Post-script:
Just thought i would let you know that there is an increasing number of emails coming in to tell me that my email is the luckiest in the world to have won GBP 1000000 or perhaps more... If i add up the amounts my humble email address has won till date would even belittle and embarass the Sultan of Brunei!!! I am sure with RBI posting messages not to get enticed by such emails and part with your contact details, one is already aware of this phenomenon everyone is experiencing these days!