… BtCIRT issues advisory to alert public  

Phub Dem  

A host of social media influencers have joined authorities in an aggressive advocacy campaign against shady digital investment schemes and related scams that lure people with promises of profit.

Facebook and other social media platforms are filled with ‘get-rich-quick’, ‘high rewards’, ‘financial freedom’, and ’long term investment’ schemes to lure unsuspecting victims. Reportedly there is an eager audience as many people are out of work.

While there are many types of digital investment schemes, the one doing rounds in social media right now is a digital business.

Two years ago, Choden (name changed) joined a digital business pyramid scheme, not knowing it was a scam. She decided to join the bandwagon after her relatives and friends living abroad were already part of the business

She joined when the country was under lockdown, which left many jobless. She said she had to register through a website with her friend’s domain (hername.com).

According to her, most of the participants in her circle are mostly senior civil servants, corporate employees, highly qualified and educated lots. Convinced, she registered and was given access to a free webinar that shows how the business works and emphasises zero investment.

She paid USD 149 to sign up. After which, she was introduced to the business course and products. After that, one is supposed to get an ID for which one has to buy some products. “Your grade depends on the number of products you buy. It cost me around Nu 200,000. The products include water filters, vitamins and herbal tea.”

However, she did not proceed further after sensing something was wrong and doubting it could be a pyramid scam. “They call themselves a digital business owner. The scheme targets the educated and ones with good networks.”

Choden said that she had to recruit as many members as possible, and she would get a commission after her members bought the products.

According to Dr Tshering Cigay, one of those driving the advocacy against these schemes,  such a scheme looks like a pyramid or an MLL (multi-level marketing) scheme from the accounts he heard from participants. He said that only a few people at the top who can recruit many people below them could make money. “That has been mathematically proven. Hence, it is concerning. I thought it is important to raise awareness about the same so that people can make a more informed decision.”

However, owners of digital businesses took to social media to clarify that it was not a scam and it was no different than a direct distributor, adding that the members adopted ‘learn and earn’ business modalities.

The member said that asking USD 149 was a part of the screening, and there the team knew if the person had the potential and afforded it. “We share the business modality and there is an investment worth USD 3,000 to USD 10,000 to buy high-end products that are legal and already in Bhutan.”

The member said that those unwilling to proceed further were refunded and let go.

In such a scheme, it was learnt that investors make money by selling products and recruiting others so that the recruiters can earn commissions or bonuses based on their recruits’ sales.

But according to experts, after investors have recruited as many friends and relatives as they can find, communities become saturated, making it difficult for new sellers to find customers. “Countless investors end up sinking into debt as they have to spend more money attending training seminars, conferences, marketing and selling products.”

As of today, Bhutan Computer Incident Response Team (BtCIRT) received ten reports to verify various online investment and business schemes.

Five individuals reported to BtCIRT about a telegram group on a ‘sure binary investment’ scheme. Each reported on ‘get rich quick’ (cryptocurrency-based) systems, links promoting how to make money easily, digital business or marketing schemes, QNET online business, and Binomo trading.

A BtCIRT official said that, two of them were victims and both invested in a binary investment scheme, while others wanted to verify the authenticity and legality of such businesses in the country. “We asked them to consult the relevant financial or business regulators. We will also be compiling and forwarding the case to the authorities.”

It was found that the binary investment victims transferred Nu 10,000 and Nu 5000, respectively, to the same Bhutanese account holder. “The victims were advised to report the case to RBP and the concerned bank.”

However, the team said that the number might not represent the victims since most go unreported. BtCIRT advised not to invest in unlicensed investment schemes.

Advisory from BtCIRT

In the light of growing discussion regarding pyramid schemes and related digital investment scams, BtCIRT in collaboration with the economic affairs ministry and the Royal Monetary Authority (RMA) issued an advisory.

BtCIRT uses the information and reports they receive from victims and people to create awareness and advise people on the prevalent scams to make informed decisions and create more awareness. The team also directs victims to the regulators and law enforcement agencies.

The team said there were no mechanisms to track scams, and they relied on people to report, but most cases go unreported. “We urge people to report to the team.”

The team said that BtCIRT aims to assist netizens with awareness around scams so that they do not fall victim to scams and advise them if they have already been victimised. “We have also informed related banks, police, RMA and economic affairs ministry about the reported scams and an advisory was released in consultation with them.”

As per the advisory, BtCIRT was informed about the online investment scheme, and it was found out that many Bhutanese are taking part, and a few have even fallen victim to it without getting the promised returns.

Besides, it states that a few Bhutanese accounts are used to collect the investments. The account holders are encouraged to verify the legality of such business operations with relevant authorities and understand the legal consequences if found to be a scam. “We would like to urge everyone to be cautious of following such informal channels and making investments or transferring money to unverified accounts or businesses.”

BtCIRT also asks the investors to verify the legality of the investment firm, verify the official website, appraise the location and details of the investment firm (in-country or overseas) and business terms and conditions. “Cross-check with the MoEA and the RMA if such investment is legal in Bhutan and verify the licence.”

BtCIRT cautioned the people while dealing with individuals or companies from outside countries as it was difficult to verify and track down individuals or companies.