The Ponzi Scheme finally went bust, making it clear that consumers are gullible to be trapped in scams
In times of Selfies, likes and tweets; it was natural for the online world to pick on gullible savers and investors to run a Ponzi scheme. After Sahara, Pearls Group, Saradha and Rose Valley made headlines after the scamsters running it were captured, Social Trade, was set up with the sole purpose of luring people on Facebook and Twitter for likes and earn money in doing so.
It was uncovered that the Social Trade scheme operated through a maze of dubious URLs that were sent to phones of subscribers, which in turn they were asked to click. Basically investors in socialtrade.biz paid anything between Rs 5,750 to Rs 57,500 to become a member and earn Rs 5 per click. Once a member, all that an investor had to do was to start liking pages and click links that were sent to them daily. Some of the members were also looking for traffic to their website, and felt doing so would scale up their business.
Although some members have claimed to have benefited from the investment opportunity that Social Trade presented; there are several others who have complained that their monies are locked with the company. The business was a pyramid scheme, which is how Ponzi schemes operate, luring people that they could earn handsomely while sitting at their homes and even offices. The subscription commenced from Rs 5,750, Rs 11,500, Rs 28,750 and Rs 57,500. Once enrolled, investors were given a user ID and password and told they would get random URLs on their phone and would be paid Rs 5 per like.
Like always, initial investors made money and were then promised that their earnings could go up if they got more members in the first 21 days of operations. This 'booster' process gave the necessary fillip to the Ponzi scheme build a pyramid of investors. Till the time the scam was unearthed; it had about 6.5 lakh subscribers and the value of the scam was pegged at Rs 3,700 crore.
Like every other pyramid scheme, as the number of members soared, so did the risks and delays in payments. And, as members started to receive late payments or no payments, some senses a scam and went to the police. The increase in reports and complaints resulted in the case being taken over by the UP Special Task Force (STF), which got cracking and arrested the culprits.
The promoter of Social Trade was a 26-year old Anubhav Mittal, who made his public appearances to showcase how successful the business was and to lure more members to the business. Sadly, by the time a Ponzi scheme is busted, it is too late for several investors who have lost their hard earned money. Many get trapped as they money they have invested in such schemes is actually their entire life’s savings, which leaves them with little recourse as the monies in question are not easy to get by after the scam is exposed and all bank accounts of the scam operators blocked or suspended.
However attractive it may be, one should never subscribe to an investment option that is not regulated by any financial regulator – RBI, SEBI, IRDAI or PFRDA. Unregulated entities are high risk and one should be extremely wary of putting their monies into such schemes.