DIMAPUR, Oct 25 - With many cases of fraud and cheating surfacing in Nagaland, the State police have cautioned the public to be wary of companies running prize chits and money circulation schemes and not to fall prey to any enticements offered by them.
In a press release, SP(Crime) &PRO, Nagaland Police, M Tungoe said police may manage to book the culprits but in such cases it is very difficult to recover the lost money. He cited one such recent case in which police arrested the CEO of one such company but he did not have any money to pay back what he owed. The SP said if any company approaches with such offers, the police should be contacted immediately.
The police release informed the public that there are fake companies/financial institutions/organisations 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. Police also named some of those fake companies operating in Nagaland as 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.
The police said these schemes are nothing but camouflaged money circulation schemes. In the front end, the promoters display products and services but 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.
The release explained that money circulation scheme means any scheme by whatever name called wherein the 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 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 that works 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 realise that they were taken for a ride, it will be too late, police added.