Imagine a bird-farming investment scheme that promises returns of over 100 per cent in two years – just the theme should make one suspicious. Yet, over 20,000 people in Tamil Nadu did exactly the opposite and lost Rs 500 crore. In Hindi, it would be called ‘Murga Banaya’ — literally so, in this case.
The offer from the firms: Invest Rs 1.5 lakh for three pairs of Emu chicks. The firm provided facilities to rear the birds and money for maintenance. Together, returns of Rs 3.34 lakh – over 100 per cent in just two years.
Six years later, all the four firms have gone bust. The promoters have absconded. The economic offences wing of the Tamil Nadu police department has registered more than 3,000 complaints against the four Emu firms. The chief minister has asked the police to take quick action against those involved in the scam.
| STEPS TO FOLLOW If you get caught in a scam: |
|
But, investors, who have lost money, have only themselves to blame. Financial scams have happened for years. Whether it is a ponzi scheme, pyramid scheme or multi-level marketing scheme, investors are lured into them with promises of unrealistic returns and easy money.
In fact, some of the initial investors even make money. They spread the ‘good word’ about the scheme to friends and relatives. And then, all go down.
Jehangir Gai, a consumer activist says that there are many such scams that people fall for. “These scams promise exceptional returns in a short period of time without much effort on the part of the investor,” he says.
The scams usually begin with huge publicity, and even rope in celebrities to earn people’s goodwill. “They deliver the promised returns the first few times. This ensures that the investor does not suspect anything wrong for some time,” adds Gai. Slowly but surely, these scamsters start to default on their ‘promises’ and eventually abscond with the money. Investors are left with no choice, but, to resort to legal battles to get their money back.
Also Read
Take the example of the Apple a Day – a scam which is still unfolding in Kerala which has already snared lakhs of victims from the state and abroad. The total estimated loss – Rs 1,000 crore.
The company offered villas and apartments in the heart of the Kochi at attractive rates and it banked upon the goodwill it created through a couple of completed projects to attract buyers. Investors became apprehensive after it missed many deadlines for its 11 new projects and lodged formal complaints.
Mathew Philip, an NRI from Dubai, is one of those who had put in money into one of the projects of Apple a Day. He is now fighting to get his money back.
He had made up his mind to buy an apartment by Apple a Day as it had associations with many well known musicians (he comes from a family of musically inclined people) and had even publicised its finished projects. He paid an initial amount of Rs 8.5 lakh to the company for the apartment.
The firm’s director and managing director went underground after withdrawing money from all their accounts after the company allegedly went bust. So far, around 250 FIRs have been registered against the company and more investors are coming forward with complaints. The duped customers have also formed a buyers’ association. They even have a Facebook page called ‘Apple a day property fraud.’
P Mohandas, member secretary, Kerala State Legal Services Authority (KELSA), the mediator between the Apple a Day Properties and investors, says the organisation has asked the promoters of Apple a Day to somehow raise money to pay off the investors.
In a statement by KELSA, the directors of the company have agreed to complete three projects. They have also agreed to take the help of another builder to help them complete the work of three other projects. Those who want to cancel their investments can do so. Their investments will be repaid along with interest. But few scams get such redressal.
So, it is not like you are left helpless, if you get caught in such scams. You can approach the consumer court or the police station to file a complaint. Filing a public interest litigation is another option. But make sure you file a complaint. Mohandas says in the Apple a Day case, not everyone who had put in money into the properties has filed complaints.
That is the issue, say consumer activists. “Not many people take it up legally to get their money back. For one, legal issues in the country take a long time. And another is that it is rather tedious, especially if you are not in the same city,” says Gai.
Even if you are not in the same jurisdiction as the company that has cheated you, make trips to the hearings. If you are not able to go at all, then you can appoint someone on your behalf to fight your case. It is after all a matter of your money.