The social media in the Sultanate of Oman has been abuzz with the money-chain scam by a company in which several people lost their hard-earned money, which is estimated to be in thousands of rials.
Sources indicated that a few people have lost money after making initial profits from such investments in the company.
The opinion is divided with some stating that there are people willing to take risks with such companies even though there is a possibility they can be deceptive.
Speaking to the Observer, a citizen said, “Through my personal experience I can say that, initially, the money starts to come as soon as one joins the scheme. Subsequently, the problems started to appear as the participants had to pay a certain amount to some fake accounts in exchange for the money to flow again. The agenda seems clear as the attempt to collect as much money and escape with it.”
Mohammed, who just managed to save himself from being a victim of such a scheme, said, “These programmes depend on forming a chain with the help of community, neighbours, family members, and even friends. The desire to make quick money attracts people to such programmes. Initially, as a person wins, he lures others to participate one after another.”
Several people who spoke to the Observer said that the urge to make quick profits exposes people to fraudsters, which include fake companies and individuals.
Last year, the Ministry of Commerce, Industry and Investment Promotion (MoCIIP) prohibited selling, advertising, or promoting goods, products and services through network marketing and pyramid schemes. The ministry said it will impose a minimum fine of RO 5,000 against violators.
The decision was expected to significantly help in limiting commercial fraud, MoCIIP said.
“The decision will help in protecting competition between institutions and companies, and protecting individuals from engaging in such practices,” MoCIIP said.
According to MoCIIP, network or hierarchical marketing activity begins with an individual or by a company at the top of the pyramid, who persuades people to buy a product or subscribe to the group by paying a certain amount of money, with the promise of giving him services or a symbolic profit if he/she can convince others to join his/her list, where the biggest beneficiary is the one who is at the top of the hierarchical group.
“It must be noted that there is a lot of confusion among the public regarding hierarchical or network marketing, as most of these concepts are different components of the concept of direct selling,” MoCIIP said.
“Despite the popularity of direct selling, there are many types of distributors with different motives. The multi-level marketing is considered a part of network marketing and has a multi-level commission reward structure based on the volume of sales of products at competitive prices.”
@vinot_nair
