Double Your Money – Scam

Recently, we all got to know how a Citi bank employee took for a ride to about 100 wealthy investor including  a Venture Capitalists and one of the group companies of the number one bike producers in our country. Do not be mistaken that the scams or frauds are at a metro location or happens in big financial companies. If you are a middle class person thinking that you cannot be a victim of a fraud, you better read the below news, which got published recently in Dainik Bhasker.

The mis-selling is happening every where. No matter which economic bracket you fall into. There are lot of “Puri” clones who are living right in our neighbors and have excess to information of our earnings and social status. These small run-away outfits have just one modes operandi to operate and run away after collecting a few crores:

1)      First these companies open a main office (which they will call a HEAD OFFICE) in the state capital. This office will be in a cheap area usually near the bus stand or the railway station so that even if a smart investor wants to check, he can drop in to see old furniture and lame staff who will say the “manager is in field or sir to bambai gaye hain”. See in the above company, the HO is in Jaipur with branch offices at Jodhpur and Balotra.

2)      They will give advertisements in the local newspaper and that too in the city addition for the recruitment of the agents. The advertisements appear some what like this “earn double of your salary or commission agent baniye aur 5%-10% tak commission paiye”. These guys are now advertising through SMS now days.

3)      When people apply they make agents providing them literature of a multilevel scheme or deposit which is “registered” under some micro finance act or the SEBI. Even if the agent ask how they will double, he is made to believe that the company is engaged in a business (may be construction, jewels or mining) which is giving them such huge returns.

4)      During recruitment the basic check is that the agent is well networked in his village or community and also he represents the same caste which the majority of the residents have. In the above case the “Meghwals” were taken as agents who reside around Jodhpur and Pokhran Area.

5)      Usually the cycle of operation is 1-2 years so to “charge” and “motivate”, the company organizes the annual function or the agents meet and agents get bicycles, sewing machines, mobikes, televisions to maruti 800. This ensures that the company gets the publicity and people maintain the faith that the company is cash rich.

6)      When the maturity time comes and investors are normally said that the maturity cheques are just on the way or payments will be made end of the year. In come case the PDCs are also given and than MAGIC…. Moment the cheque bounces the employee at the branches and the HO go hiding. People just gather around the closed offices with help of the agents, media and police in expectation, that some day they will get the money back.

This is so simple and yet we fall to these tactics. So next time when any of your so called neighbor or a caste honcho approach to invest in these schemes just do these 2 things:

1)      Call your Financial Advisor, and ask him his advice.

2)      Hand over the scan or print out of the above news article. At least with you he also is protected, as he  may not be aware that he is also in mess.

One more thing…. Till date I have not seen, heard or read, that the money which is cheated returned back to the common investor. In some cases the police has caught hold these smelly brains but, did the investor get his money back is a question. If you or someone you know has managed to get the money back, do share the process in the comments below.

This article is written by guest author Madhupam Krishna. A Post Graduate in Finance, currently he heads sales function for Rajasthan for Principal PNB Mutual Fund.

Disclaimer: This post represents the opinion of its author only, and does not in any way reflect the opinions of  the author’s employer, The Financial Literates or the other authors who write content for this Website.
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Hemant Beniwal is a CERTIFIED FINANCIAL PLANNER and his Company Ark Primary Advisors Pvt Ltd is registered as an Investment Adviser with SEBI. Hemant is also a member of the Financial Planning Association, U.S.A and registered as a life planner with Kinder Institute of Life Planning, U.S.A. He started his Financial Planning Practice & TFL Guide Blog in 2009. "The Financial Literates" is a dream & mission to make Indians Financial Literate.


  1. I wonder why people don’t understand this simple principle about investing –

    “If its too good to be true, it’s not true.”

    Nice article Hemant.

    • Hi Adheesh,

      In 10 years of my career I have seen – first thing people don’t like is simplicity.

      They don’t want to understand & learn simple concepts “are ye to simple hai kooch aur different batao.” LOL

      They want advisor should show them dreams – so let them sleep & don’t disturb their dreams 🙁

  2. Hi Hemanth,

    Thanks for sharing this.
    We need to be aware of chit fund companies who does this kind of cheating.
    Small investors like us will get into trap by listening the word money doubling in 2 0r 3 years. Hence this article opens the eyes of such small investors like us to choose the right approach for investment, instead of relying on cheaters and some chit fund companies.

  3. Hello Sir

    This scam has now re-emerged in the form of Digital Profit Course and Digital Money India scam. Thousands of people have enrolled online by paying Rs 3500 to get a book and cd which promises to make them rich within a month.

    I don’t know when SEBI will take action against all these criminals.



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