The Uttar Pradesh police busted an illegitimate online marketing website headed by Anubhav Mittal which was built on the idea of Cash for Likes scheme. It is considered to be one of the finest Ponzi schemes ever executed in India.
MODUS OPERANDI
The basic model of the scam is quite simple to comprehend. A person is listed as a member if he pays a certain amount of money to the company.
After paying the subscription money to the company, the members were asked to like pages through the links that were sent to them. The company claimed it earned Rs.6 for every like and gave Rs.5 of it to the members.
In reality, all the links sent were fake and a server was set up where these links would terminate.
The name of the company was changed regularly to hoodwink police. Starting from socialtrade.biz to freehub.com to frenzzup.com, the founders were able to deflect media attention considerably well.
PONZI SCHEME
As per the Wikipedia, a Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources.
This is what the Social Trade Scam was based on. There were no contracts between Social Trade and any other company. Money was taken from ABC and given to XYZ. There was just circulation of investor’s money taking place between them.
It was a strategy on the verge of bursting. Ultimately, there would be no new investors. So, while old investors will earn the promised high returns, the newbies will incur losses.
IS IT A SCAM?
There are still some quarters who are in support of the Social Trade Scheme and have found it to be legitimate and fruitful.
Around 4,000 social trade investors landed up at Jantar Mantar with placards in support of Anubhav Mittal.
There have been instances where people had actually benefitted from advertising in social trade platform. This is indicative of the fact that the founder had initiated a smart digital marketing hub that brought a consumer and advertiser together. Similar to a barter system, the former would receive cash incentives and the latter would get social media attention.
But this support has been termed as a sham by the concerned Police officials which they sense it as a way to deflect the attention from the core issue of the scam.
The Central-Probe agency confirmed that the company cheated around 6.5 lakhs investors to an estimated sum of 3,700 crores which is even more than the much talked about Saradha scam in West Bengal.
BE AWARE
Making money through the internet seems enticing but then one must make sure that one is doing it through legitimate means or else, the dark side of the net is ever ready to gulp the user into its the web.
Image Credits- Google Images
You would also like to read : Fodder For Scam
http://edtimes.in/2013/09/fodder-scam/
