The Bhutanese Leading the way.
The Competition and Consumer Affairs Authority (CCAA) has come across yet another pyramid scheme which has drawn a suspected 1,000 Bhutanese. Surprisingly, the scheme’s upfront deposit fee has been recorded as the highest one so far, as initial members are asked to deposit a sum of Nu 650,000.
CCAA shared that this is now the 15th identified pyramid scheme which Bhutanese have fallen victim to.
CCAA has found that this scheme bears similarities to the QNET scheme, which was declared a pyramid scheme and was banned in 2022. As investigation continues, they suspect that the scheme maybe operating under different names.
The investigation team found that this scheme bears all the hallmarks of a pyramid scheme.
Promoters of this scheme lure new participants by promising attractive commissions and gifts starting with online classes. However, detailed information about the scheme is withheld until participants register with an initial deposit starting from Nu 650,000.
Participants of the scheme had revealed to CCAA that the mode of operation were numerous.
Starting with networking where the prospective participants are introduced to mentors by existing members. The mentors engage with participants for over two weeks where their personal goals and aspirations are explored. Throughout this period, participants are asked to outline their financial plans to achieve these dreams and what their current position or job is.
A series of online meetings (via WhatsApp/Zoom) is conducted to provide orientation on earning commissions and income through the program.
Followingly, an assessment process is carried where the mentors evaluate the participant’s goals, financial plans, and interest levels to determine if they are suitable to proceed further.
Then the recruitment process starts where they classify potential recruits into three zones as Hot Zone which includes family members, siblings, or close relatives. Warm Zone which includes friends and acquaintances, and Cold Zone includes unknown or unfamiliar individuals.
This categorization is made so that participants can lure more downline members, particularly offering that those falling under the hot zone will be eligible for certain discounts on the initial cost.
The process than get riskier as participants are asked to made financial commitment where they are required to deposit Nu 650,000 to Nu 850,000 as a starter fee into the introducer’s local bank account.
Subsequently, from this amount, USD 60 is deducted as an entry fee which is directly transferred into the company’s account. The balance is allocated to program benefits offered by the company such as travel packages, jewelries, health products, etc.
Within a week, new members receive commission equivalent to USD 200 and mentors and existing upline members earn 10 percent each from the starter fees as commission.
Then the members are asked to sign a declaration paper. After that, training and resources are allocated.
For the first 21 days, new members are made to attend online classes covering topics such as communication skills, operating online schemes and portals.
Members are given access to a “virtual office” or portal, where they are provided access to physical products and travel packages. Commissions are offered for every purchase made through the portal.
CCAA revealed that a victim of the scheme came forward and shared that the participants are given a chance to travel to Malaysia for further training. However, upon reaching there, they were just given videos to watch.
The victim had even revealed to CCAA that in the so called 21 days training, which the scheme offers, they were taught to lie and strategies to tackle difficult questions upon being asked.
The victims had even shared to CCAA that since they have already made the deposit, they have no other choice to get their investment back other then recruiting downline members.
As for recruitment and earnings structure, the scheme compels that each member must recruit at least 5 downline members within 5 years.
Upon recruiting 10 downline members, the income is said to enter an auto-run mode.
Then, members are granted the opportunity to travel abroad to attend a business conference or buy gifts, such as gold chains, watches, or gadgets from the remaining money.
CCAA highlighted that once trapped, the members deliberately withhold key information about the scheme from potential participants until they register as members.
They found that the terms and conditions outlined in the declaration paper mandates the members to follow commission payout and other policies including the operation is similar to QNET scheme.
Further similarities drawn were as in both pyramid schemes, the participants had to compulsorily attend online coaching sessions, upfront deposits required prior to revealing full details, members had to sign agreements and members had to recruit downline members to earn commissions.
The only difference was the initial deposit amount. As for the QNET scheme, the initial entry fee was Nu 0.150 million (mn) and for Global E-Commerce it is Nu 0.65 mn.
Further, CCAA shared that the Global E-Commerce is a pyramid scheme as the primary focus of the scheme is on recruitment of members rather than product or service sales.
CCAA shared that if the promoters rebranded the QNET scheme as the Global E-Commerce scheme, that would mean that they will be disregarding the notification and decision issued by the IRC and CCAA. This will be constituted as an obstruction of lawful authority under Section 119 of the Consumer Protection Act (CPA) 2012.
The section states that if any person fails to comply with the decision of the committee or the order of the Board, the person shall be guilty of obstructing lawful authority.
CCAA shared that in their effort to alert the public, they have circulated a notification in their social media platforms on 16 October 2024.
The notification clearly mentions that promoters are to stop recruiting new members immediately and avoid participation in the scheme.
If approached, individuals are requested to report the promoter to CCAA with any relevant information.
Pyramid schemes are not legitimate businesses and are designed to defraud individuals. While they may promise commissions depending on recruiting new members, these operations inevitably collapse when recruitment opportunities diminish.
The operation of pyramid schemes is prohibited under the Consumer Protection Rules and Regulations, 2015.
CCAA is still investigating to identify who the topliners are and who introduced the scheme in Bhutan.
This table shows how the 650,000 is dispersed.
My fellow Bhutanese need to recognize that the pursuit of money often leads to disappointment. There’s no such thing as free money—it’s important to grow beyond this mindset