The Office of Consumer Protection (OCP) concluded that an online business called ‘OnPassive’ is a pyramid scheme and illegal in the country.
The office investigated the business operation after Bhutan National Bank (BNB) informed the Royal Monetary Authority (RMA) of its operation in the Bhutanese market last year.
It was found that 13 Bhutanese were promoters of the business and 53 Bhutanese invested USD 105 in the business as registration fee.
According to the OCP, BNB reported that there are many Bhutanese recruited into the scheme and people deposited the money using a credit card.
Officials said an individual has made the highest number of transactions amounting to USD 1,734 during the year 2020 to 2021.
A report OCP compiled last year stated that business promoters learnt about the business through social media.
A promoter told OCP he knew about the business through Facebook in 2020 and registered as a member after learning about the compensation plan of the company.
He recruited close friends and facilitated depositing the registration fees for other members through his personal credit card.
While some promoters told officials they joined after learning about it online and that the company is yet to be launched, others told they received invitations to join the business from American, or Bhutanese there and managed to recruit under them as ‘downline’ members.
OCP officials said that cash deposit towards Gofounders started in 2020 and as of July 2021, 53 people’s registration fee amounted to a cash outflow of Nu 412,636.
Ruling that the business poses danger on the economic interest of consumers and depletion of convertible currency reserves if such unauthorised outward remittance continues, OCP issued a letter to discontinue its business with immediate effect and recommend RMA to take appropriate actions as per the prevailing rules and regulations.
OCP has also notified the department of trade about the business operation without a business license and issued public notification notifying that OnPassive is engaged in unfair trade practices and advising people to refrain from engaging in such business practices.
It stated that OnPassive contravenes provisions of Consumer Protection Act 2012 and Consumer Protection Rules and Regulations (CPRR) 2015.
Officials said that most members are recruited to get investors, when the company does not have official documents of compensation plan and income disclosure.
“The company has failed to give any tentative date of launch to its members yet,” an official said. “Members are enticed to join OnPassive with promises of earning high returns of bonuses, incentives and to achieve founders’ status.”
Officials also said members are recruited without providing prior and detailed information about the business plan, approval and legality of the mode of business operation of OnPassive in Bhutan.
OnPassive is the brainchild of an individual called Ash Mufareh with co-founders key executives called James Geddis, Mark Dever and Peter Surur.
It was established in 2018 and claims to have a global presence in over 216 countries and would deliver smart business solutions (SBS) with the help of artificial intelligence and machine learning.
It is claimed that Onpassive has its headquarter in Orlando, USA, and has two offices in Indian cities of Bangalore and Hyderabad where all software tools are being developed.
The company has the plan to launch over 50-60 digital products providing internet solutions such as domain names, website builder, liquid hosting, VPNs, video marketing, email marketing, webinar platforms, HRM solutions, URL shorteners, traffic, chat, SEO, social media and much more under the same umbrella.
It claims that all products are customer-friendly, simple and easy to use. All the digital products will be bundled into a single monthly package which provides full value for the money paid.
Meanwhile, OCP also investigated another business called ‘Crowdone’ and is investigating another online business called digital business.