COMMENT
By RAYMOND ROY TIRUCHELVAM
WHAT is a scam? From the numerous definitions, business-wise, it is seen as a fraudulent business scheme, meant to victimise or deprive people by deceit. Even if the proposition does not seem as such at first, more importantly there is an attempt to intentionally mislead a person(s) into believing a product or story in order to attain a goal of a financial or other nature.
Now that we have a definition, let’s look at some instances we have here today in the real world and see how to deal with the so-called scams.
The most common nowadays, for which the definition fits perfectly, are Internet scams. They come in various forms, from the Nigerian version, to the counterfeit and direct solicitations.
One direct way to verify their authenticity is to check the Internet Protocol (IP) address, which can be done via an eight to 10-step checks for Yahoo and Hotmails. Once you find out the IP location, you can proceed to enquire from the person, and in most, if not all instances, the answer will not jive with the fact.
This article is not going to delve on Internet and soft scams, rather we will look at real companies, real products being “pushed” today in Malaysia, that “may” fall into a broad category of misleading consumers. If you are aware of the subject matter, then surely one word comes to mind almost immediately – MLM, or multi-level marketing, outfits.
I am, nevertheless, not saying that MLM companies are misleading people, but two facts are obvious.
First, most MLM products are exaggerated in their values, and most of the people who become distributors do not make significant income. So how do we, as consumers, make a decision if we want to become a distributor or a buyer of the products, without being “scammed”.
The question that I usually end up asking myself is why aren’t these “super” MLM products, which contain extraordinary features, available on supermarket shelves for everyone to buy, if they are so good? Thus far, no one has provided a satisfactory answer.
There are some websites that list down companies in Malaysia which are purported to sell products or offer services that fall under the definition of scam as above. I have personally checked some of these companies, and some are true as to my knowledge at least, but surprisingly they are continuing to operate under legitimate business registrations. I even see one company where the director was recently awarded a title.
While I do not want to pin-point any parties, if some of the allegations seem reasonable, why aren’t the authorities doing anything about it? Perhaps, no one has complained, or perhaps the products are genuine, I will not know.
The instances of the products are described and some are more hilarious than anything, for example, the mineral water business (which we all know how big it is today, basically sells what we already have around us), where this “special” water supposedly has more oxygen than the normal mineral water. For goodness sake, water is made up of H2O, two parts hydrogen and one part oxygen, and that’s that.
The products all carry similar innuendos. For example, the first to be introduced in the market (which I would probably agree, as repeated scams are less effective), offers extraordinary high rates of return (gold investment) and improve performance from anywhere between 50%, 75% and 100% and more (engine efficiency, health efficiency, sex life, age).
Unfortunately, while there are laws to protect the consumers from outright scams, there is little protection when the definition of a scam is blurred. For example, a product may be marketed as being able to increase fuel efficiency (which is difficult to prove) but fails to mention that it comes with an expensive engine cleaning which far outweighs the benefits. How does one rate this as misleading?
There was once a betting forecast syndicate that used to provide US football games prediction. The business model used was simple but effective. For every game, they took a side, and sent flyers to target customers who were either bettors or game followers. Assuming that in every game one team wins, then on the average there should be a 50% probability of accuracy in the prediction. So the model required a repeat flyer of a fresh prediction for the next game to be sent to those who had made predictions initially, but always sent to ONLY those who had made correct predictions earlier.
Therefore, after a few “successful” predictions, people would now be willing to pay for the predictions. If they started the ball rolling from an initial 10,000 “potential customers”, after the third round, they would have 2,500 “willing” customers. This is only for football, how about other games?
The above instance is a case where customers are “willing to pay to make a prediction”, with the business model concept concealed. So is this construed as a scam? Point to ponder.
Raymond Roy Tiruchelvam feels that the saying, kill one and be called a murderer, kill a thousand and be called a conqueror, is over-rated.
