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Nation Current Affairs 09 Jan 2019 Money-circulating fi ...

Money-circulating firms threat to national security

DECCAN CHRONICLE.
Published Jan 9, 2019, 6:09 am IST
Updated Jan 9, 2019, 6:09 am IST
Adding a product to the pyramid scheme is the latest trend in the evolution of such money-circulation schemes,” the official said.
The prize chit, benefit or savings schemes primarily benefit the promoters while serving no social purpose, a report by the James S. Raj Study Group had told the Reserve Bank of India in 1975 on deceptive money circulation schemes in the country. (Representational Image)
 The prize chit, benefit or savings schemes primarily benefit the promoters while serving no social purpose, a report by the James S. Raj Study Group had told the Reserve Bank of India in 1975 on deceptive money circulation schemes in the country. (Representational Image)

Hyderabad: QNet is the latest avatar, launched in 2012, of former money-circulation companies Goldquest International Private Ltd (formed in 2001) and Questnet Enterprises India Private Ltd (formed in 2004) promoted by the QI group. 

QNet is a brand under Vihaan Direct Selling (India) Private Ltd. Its promoters have been forming new companies as and when the law enforcement agencies start taking legal action against their money-circulation frauds based on complaints across the country. Also, to deceive new entrants to their network, they come up with a new brand every time they legally and socially exhaust themselves.

 

Those duped by Qnet and its former avatars have even formed an association in Mumbai and are legally fighting to bring its promoters to book, besides creating awareness among the vulnerable sections of society, particularly the youth. The prize chit, benefit or savings schemes primarily benefit the promoters while serving no social purpose, a report by the James S. Raj Study Group had told the Reserve Bank of India in 1975 on deceptive money circulation schemes in the country.

“The promoters have been indulging in deception tactics to circumvent the law enforcement agencies and the judiciary,” Cyberabad commissioner V.C Sajjanar said. “In fact, deception is the key as newly-would-be recruits have to be convinced about the buying opportunity rather than of him/her buying/selling the product. Here, the business opportunity is sold, generating huge commissions and the seller gains only by enrolling more members to the chain.”

The key difference between direct selling and pyramid schemes is that in direct sales, the person making the sale gets maximum commission and his uplines get lesser than him. But in pyramid schemes, the primary seller at first does not get any commission, but as the pyramid beneath him grows, he gets massive commissions, far in excess of primary seller/recruiter. This motivates persons to recruit rather than to sell directly to earn huge money.

“Adding a product to the pyramid scheme is the latest trend in the evolution of such money-circulation schemes,” the official said. “They target the most vulnerable sections of society and the products are mostly unbranded and sourced from unscrupulous agencies. They are valueless and are typically overpriced in the name of magical remedies or craftsmanship or uniqueness etc. This huge exaggerated margin enables promoters to pay commission to some extent.”

Such companies also pose a serious threat to national security, as overseas promoters control huge personal data of persons, including government servants, and siphon off huge money from the country.

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Location: India, Telangana, Hyderabad




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