Police advise people to be wary of chit funds

Admin   |   17 October, 2015   |   813   |   3980

DIMAPUR - Of late, many cases of fraud and cheating have been surfacing in Nagaland. There are fake companies/financial institutions/organizations operating from within and outside of Nagaland running many prize chits and money circulation schemes.

Hundreds of people from Nagaland have already been duped of several lakhs of rupees. Mention may be made of some of those fake companies operating in Nagaland includes Queensberry Foundation, Everlight Realty Infrastructure Limited/Everlight Realcon Infrastructure Limited( ERIL), Progressive Youth Welfare Society, Progressive Youth Thrift and Credit Cooperative Society Ltd etc.

Money Circulation Schemes are being promoted in the name of Direct marketing (DM), multi-level marketing schemes (MLM), network marketing (NWM), referral marketing, introduction marketing, chain marketing etc.

A press statement from SP (Crime) &PRO, PHQ, Nagaland, M Tungoe has stated that these schemes are nothing but camouflaged money circulation schemes. In the front end, the promoters display products and services, at the back end, it is nothing but money circulation schemes banned under the provisions of prize chits and Money Circulation Schemes (Banning) Act 1978.He stated that money circulation scheme means any scheme in which a person has to enroll into the scheme through an already enrolled member by subscribing to the scheme by paying initial kit/membership amount and purchasing goods and services, whereby this introducer will get benefits (easy money) and the company which promotes the scheme earns quick money.

The newly enrolled member again has to enroll further members to get his amount back and also the benefits. Such a system of chain to work endlessly to provide profit to everyone concerned would ultimately breakdown at some stage, resulting in financial benefit to some who joined the scheme at initial stages and financial loss to those who joined at a later stage. By the time the people realize that they were taken for a ride, it would be too late. Money circulation schemes are banned under the provisions of prize chits and Money Circulation Schemes (Banning) Act 1978.

The SP (Crime) cautioned the public to be wary of companies running such schemes and not to fall prey to any enticements offered by them. Police may manage to book the culprits but in such cases it is very difficult to recover the lost money. For instance, recently Police arrested the CEO of one such company but he does not have any money to pay back what he owes. He further stated that if any company approaches with such offers, the Police should be contacted immediately.