Sometime in January this year, Pema, 46, learnt about an online scheme from her friend. The scheme, called Oriens dealt in health supplements and was told that she could learn more about it by joining a group on WeChat.
The mother of four cannot read but an official from Oriens briefed her that they had the government’s approval for the scheme. She was asked to deposit Nu 6,000 into a bank account for which some health supplements would be provided. Pema is then askåd to add more members to the group. She earns Nu 405 for each new member she adds. The group of four is promised a group bonus of Nu 572.
Pema has managed to add two members and has not received any incentives to date.
She is among the thousands of social media users who are today involved in the latest pyramid schemes offered in the country. Called MagneSSa and Oriens, both schemes deal in health supplements and cosmetics with promises of attractive increments and health benefits.
The scheme asks participants to pay Nu 6,000 for Oriens and more than Nu 30,000 for MagneSSa up front with a promise of earning more based on the members they recruit. The members receive health supplements and cosmetics but are liable for increment only if they recruit more than three members.
Members of these schemes, which include farmers, actively promote the business to earn financial incentives such as cars by rising in the pyramid.
An Oriens official claimed to have around 5,000 to 6,000 active members in the country and those who perform well get higher incentives. There are also incentives where members get opportunity to travel abroad with some members claiming to have already travelled.
Following concerns on Bhutanese being lured to participate in pyramid schemes, the office of the consumer protection, trade department, issued a notification cautioning the public to refrain from involvement or promotion of pyramid schemes in the country. It warns those participating in such scheme to be dealt as per the law of the country.
The notification states that pyramid schemes are deemed unfair trade practices because it compels the old member to entice new members to derive certain economic benefit. Section 38 (xiii) of the consumer protection rules and regulation 2015, strictly prohibits service providers, suppliers and manufacturers from establishing, operating and promoting a pyramid promotional scheme whereby a consumer receives compensation that is derived primarily from the introduction of other consumers into the scheme rather than from the sale or consumption of products.
Section 6 of Consumer Protection Act of Bhutan, 2012 prohibits businesses from making misleading representations in relation to the goods and services. It is illegal for a business to engage in conduct that misleads or deceives or is likely to mislead or deceive consumers about goods and services.
Section 16 of Consumer Protection Act, 2012 states that no person shall advertise supply of goods and services at a specified price, which that person does not intend to supply or provide. The notification stated that these pyramid schemes are dealing in the sale of various health supplements, which pose risk to the health of people who consume these products without prescription
Drug Regulatory Authority
On March 13, the Drug Regulatory Authority (DRA) issued a notification, stating that the authority has received complaints, from reliable sources, that the listing certificate issued by the authority for MagneSSa health supplements has been misused for promotion of all other products of the same company.
After receiving a written application for withdrawal of the three products that were earlier listed, the DRA cancelled the listing from February 27 this year. Its notification stated that no health supplements of MagneSSa are listed or registered with the authority.
The notification stated that DRA will take regulatory actions against any individuals or licensees if found engaging in promotion and sale of any such products claiming health benefits without approval from the authority.
DRA has listed 23 products of Oriens.
Drug controller Kinga Jamphel said the listed products were allowed for personal consumption as supplements and not as prescribed medication. He said the hospital should inform DRA of issues related to the listed health supplements because listed products are under observation and can be recalled from the market if any complaints were filed against the product.
Department of Trade (DoT)
An official from the department said that retail license of Oriens was provided with technical clearance from DRA. No license was issued to MagneSSa.
Director of DoT, Sonam Tenzin said the home ministry has instructed them not to promote such businesses and to take administrative actions accordingly.
Kuensel learnt that the regional director of trade, Phuentsholing, Pem Bidha fined Bhutan Oriens for not complying with the rules, for promoting products beyond the listed supplements.
She said proper monitoring was carried out and meetings and events of Oriens were cancelled. The renewal of retail license into a wholesale license was approved but the issuance was kept on hold. “Proper revision of the scheme needs to be conducted,” said the director.