Friday, January 13, 2012

Earn Quick, Easy Money: Be Careful


“Earn Quick, Easy Money.” The headline has caught the attention of many internet users that fall for the trap of numerous mega online scams operating in the country. In the name of online home-based businesses, a significant number of fraudsters have been fleecing innocent people, Pakistan Today learnt on Thursday. Due to absence and poor implementation of cyber-crime laws, the scam operators have set up well-furnished corporate offices in the heart of big cities, including Lahore, Karachi and Islamabad, while a few of them have penetrated in to the relatively small towns or rural suburbs. Interviews with a number of alleged scam operators reveal that they pocket millions of rupees by fleecing innocent people in a couple of months only. 
A conservative estimate suggests that an online franchise operator that registers about 100 members each month bags over a million rupees per month. Their standard modus operandi provides them an opportunity to sail smoothly for four to five months without paying a single penny to their members, who deposit them subscription fee ranging from Rs 5,500 to Rs 18,000. In most cases, people complain that these fraudsters vanish away in six to eight months by fleecing Rs 5 to Rs 10 million and start a new business with a new identity in other cities. 
How it operates? 
Speaking to Pakistan Today, operator of a similar business, Imran, claimed that his company was an authorised franchisee of a Canadian firm that dealt in online advertisement. “We get advertisement posting jobs from the Canadian company and sublet the contract to local individuals against a membership of Rs 5,500 to Rs 18,000, depending on the size and rate of return on the job,” he maintained. 
Responding to a question, he said, “Though, it is an online advertisement posting business but it mainly depends on conventional advertising. We spend nearly Rs 15,000 to Rs 20,000 per month on banners, newspaper and cable advertisements to attract new members.” He disclosed that he had been in this business for over a year and had been registering around 35-40 members every month. 
However, Imran failed to substantiate his claim that his firm was affiliated to some Canadian company as he could not produce any documentation or registration certificate. His company’s website, quickearnonline.com, does not show any registration or affiliation information either. The website does not have any postal address of the company, except for two addresses of the Lahore-based franchisees. 
What is the business? 
The ad-posting business is similar to the controversial multi-level marketing (MLM) model, as most companies operating in the country have parent foreign company, master-franchisees, franchisees, sub-franchisees and ad-posters or individual members. All these franchisees offer attractive packages, usually in US dollars, along with the comfort of working from home. They market it as a home-based business, with returns ranging from Rs 9,000 to Rs 35,000 per month, after having paid a membership fee. In addition, if a franchisee or an individual introduces a new franchisee or member, they offer him the money equivalent to $10 to $100 per member, while a franchise costs around $500 to $800. 
After registering with a franchisee, the ad-poster’s job starts. The so-called franchisee gives a piece of code, usually in the hypertext mark-up language (HTML), to its new members, which they have to paste on classified websites and forums. Usually, this code posts advertisements of their own company or some unknown local products, which clearly indicates that the entire scheme has no relationship with any foreign firm. 
How is it a scam? 
A simple inquiry can find thousands of victims since it employs chain marketing strategies. Several victims of this ad-posting business told Pakistan Today that they invested their hard-earned savings for supplementing their income, but could not even get their investment back. 
They revealed that at the time of registration, these companies offered lucrative packages but after completing the massive task of posting around 50,000 to 80,000 ads on various websites, they were refused prompt payments. One of the victims said, “These companies maintain a corporate environment and have separate account sections. The Accounts’ staff usually point out mistakes in the completed jobs and try to deduct a lion’s share from the promised remuneration. And when someone agrees even on the deducted amount, they ask him for a month or two for processing. They present the excuse that all transactions are processed through the parent company, which is based in some foreign country.” 
They pointed out that several companies, including visiononline.com, homebasedmoney.com and earnonline.com, had vanished during the past few months, without paying to their members. The victims indicated that the scam operators operate on rented premises mostly and leave no clue behind them. 
What do the experts say? 
Speaking to Pakistan Today, Director of Pakistan’s pioneer IT company, BrainTel, Amjad Farooq Alvi said that although the country had laws related to cyber-crimes, their implementation was questionable. Citing the example of the internet service providers and telephone pre-paid calling cards, he said that both businesses had failed in the country because there were no regulations. Several companies disappear after selling calling cards worth millions of rupees but no action has been taken against them yet, he lamented. 
Amjad pointed out that IT had changed the strategies of all businesses, including the advertisement industry. Earlier, advertisement was done through conventional media, including the newspapers, radio and TV, however advertisement is done on the internet now. He said that this turnaround had created various opportunities that did not exist in the past, but at the same time, it required new legislation and improved implementation. 
He concluded that both the advertising and IT industries had to play their role along with the law enforcement agencies to curb this menace and save the industry’s reputation.(Pakistan Today)

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