If you are thinking this is a new scam happening for the first time- no. In past also many companies like socialtradebiz.in have duped investor’s money. Lakhs of people who are very much knowledgeable believe in these investments and then are robbed in daylight. On 3 Feb 2017, the Director of Ablaze Informatics with 2 more key employees have been arrested by UP Special Task Force. This is the same company who ran socialtradebiz.in and frequently changed names like freehub.com, intmaart.com & frenzzup.com.
You know, many people who are already earning good salary had joined it to increase their side earnings by investing money for its membership. As reported by media 11 lakhs people are already member on this dubious website. The news has been a shocking as being north India-based many people in my circle have been impacted as they did not heed to information from my side or media.
Last 4 months, there had been 2 instances where one of my wealth management client and one of my relative had asked what I felt about this “click-pay business”. My answer was simple that if I do not understand the business model (how this company makes money), I do not or advice to invest.
Yes, I run a website and know a bit of IT & social marketing. I don’t think providing inorganic likes or fake subscriptions can help any genuine business in long run. People familiar with digital marketing would understand what I am saying. So if it does not help a company to promote, why will it pay for coming years or scale the marketing expenses? Hence I never thought it to be a business at all.
Look how a regional channel had already done their research and predicted that this company will run with people’s money last year itself. But no one wanted to see it.
I was astonished to see, that hours after Anubhav Mittal was arrested, many members (especially ones who had made members under them) came on to streets in support of him. One lady “called him a messiah’ as claiming that he gave employment to hundreds of women. Youtube is full of such videos.
But what she doesn’t know is this was just a simple MLM (Multilevel Marketing Concept) or network marketing. The top line will earn and bottom line will just suffer.
Since the money comes initially for some time, people think this as investment returns or earnings. This is just initial payment so that you believe the concept and convince more person and make them a member.
To ensure legality the membership is over some magazine (speakasia) or social marketing account (like here in case of socialtradebiz.in).
Look at the membership card of this company:
What are the lessons that we can learn over this fraud:
- Never Invest What you do NOT UNDERSTAND
You know Warren Buffet did not invest in software companies for very long as he did not understand initially the business model of IT companies. Many criticized him claiming that he missed an opportunity but he maintained that there is no loss as he invested where he actually was convinced he could make returns. He didn’t gamble his or shareholders money. He still doesn’t invest in Bitcoins. Same reason.
- If number do not add up.. STOP & WAIT
Always look at the business model. If a company makes 2X, then only a part from 2X will be distributed to the shareholders. If you are not convinced that how can a company make 2X, you should wait to understand or let the business model convince you.
This is the main thing how to invest or make your investment partner. Look at companies who have run away. Speakasia, Sahara, Shradha, StockGuru, TVI Express all had superficial business models. Nothing convincing at all.
- Wealth Creation is a Tough, Long & Boring Game
I was really amazed to see when many people with good education working in banking or other sectors bought laptops and internet connection for their wife to explain this wonderful model of just clicking some buttons and making money. Didn’t it occurred what our parents said: “it takes a lot of hard work to make legal money”. We write frequently that it’s the time and consistency which makes you rich. But again few lakhs have lost their money.
- Some things have RED Marks on them
You should know, MLMs or Ponzi schemes are concepts to create fraud and run. It’s a cool concept to dupe greedy people. Underline products will change from stocks to a magazine or social marketing in this recent case. But they will run for sure. The bad thing is you fall prey and make people near you also become victims. Just stay away from these.
- It’s your choice, nobody can force you
Whether you put in money in a business like socialtradebiz.in or in a SIP, it’s your choice. You have to understand and come out of this psychology of feeling bad that “my office colleague’s wife or my brother-in-law is earning extra” and I am just waiting for my SIP to show results after 10-20 years. You keep on losing small amounts in intervals or save them to make a corpus after some years- Your Choice.
I am a bit upset to see this happening. I know what it feels to lose hard earned money and above all losing HOPES.
Share your experience and forward to save more financial lives.
