Of schemes and scams

Have you received an e-mail (or snail mail) from a certain Gabriel Khumalo, supposedly a Nigerian federal government employee or a Nigerian heir to a vast fortune (that includes gold, diamonds and precious stones), inviting you to be a partner in a business venture?

The letter lures you into being a foreign partner, saying that a hefty sum (usually in dollars) would be transferred to your account. Strict confidentiality is requested.

A promise of big shares in the venture is dangled before you, assuring you that the business is 100 percent risk-free. To give it a semblance of legitimacy, the perpetrator gives his telephone and fax numbers. But once you agree to the "(monkey) business venture," the perpetrator makes excuses as to why the fund cannot be remitted at once. Consequently, that person would demand that a certain amount be deposited to his account as payment for various taxes and fees supposedly to facilitate the processing and remittance of the sizable fund. The main objective of this fraud comes to fore: to transfer an amount from the victim’s account to the account of the perpetrator.

Sometimes, the victim is even invited to Nigeria (in West Africa) where he’s promised a red-carpet reception. The sad truth is that the victim is either kidnapped for ransom or killed after the money is turned over to the perpetrator.

According to lawyer Ma. Teresa Arao-Mahiwo of the Bureau of Trade Regulation and Consumer Protection (BTRCP), this kind of fraud "panders to a person’s get-rich-quick mentality and greed, making a person blind to all else but the monetary returns."

So what does the Nigerian government have to say about this? Time and again, it has denied the existence of the money (or vast wealth) and has taken steps to counteract the fraud by issuing warnings from its Central Bank that all documents pertaining to the payments of claims or transfers of money are fictitious.

On our end, the BTRCP admonishes all to take precautions by asking the government agency concerned (Department of Trade and Industry, National Bureau of Investigation Anti-Fraud Division, and the Bangko Sentral ng Pilipinas) about the legality of such a letter (or e-mail). Or simply treat such letters as junk – throw them into the wastebasket where they belong.

You haven’t heard it all. Are you familiar with the pyramid? No, we don’t mean that ancient massive structure found especially in Egypt. We’re referring to the pyramid sales scheme or pyramiding, which is said to be the dishonest counterpart of multi-level marketing. It primarily seeks to make a quick profit by recruiting people to invest, and these persons in turn recruit similar investors or distributors. The recruiters are paid commissions and bonuses. What about the merchandise (or service) sold? Well, this is usually ignored – the goods to be sold have no real market value or are overpriced.

But consider this: A person recruits six distributors, each of whom recruits six others. Carry this process through several steps and you have more than a million people in the distribution program (or the distributors would soon be recruiting one another).

For you to profit from a pyramid scheme, there would have to be a never-ending supply of potential (and willing) participants. But the supply runs out, the pyramid collapses and the participants lose their investment.

On the other hand, a person recruited to become a distributor in a legitimate multi-level marketing company is given a starter kit that usually contains brochures, a price list and sometimes, product samples. To earn a commission, a distributor must reach his/her personal sales quota within a certain time frame. The thrust of multi-level marketing companies is to come up with personal volume sales so that the distributor receives commissions and establish a business base. The commission the distributor earns from recruiting a new distributor is not the main source of profit.

So as not to fall prey to this kind of scam (or scheme), take these tips from the BTRCP:

• Avoid any plan that offers commissions for recruiting additional distributors.

• Beware of plans that ask new distributors to spend money on high-priced inventory. They may be illegal pyramids in disguise.

• Be cautious of plans that claim you’ll make money through continued growth of your "downline" (the commissions on sales made by new distributors you recruit instead of through personal sales).

• Beware of plans that promise enormous earnings or claim to sell miracle products.

• Beware of "decoy" references that the promoter pays to describe fictional success in earning money through the plan.

• Don’t pay or sign any contract in an "opportunity meeting" or any other high-pressure situation. Take your time to think before making a decision. Seek professional advice.

• Check with the agency concerned (DTI, Securities and Exchange Commission) about any plan you are considering, especially if the claims about your potential earnings or the product are too good to be true (because they’re probably not true).

* * * Yes, Honey!

We got this snail mail asking about the health benefits of honey and cinnamon.

We’re not trying to sweet-talk you into anything, but here’s something about honey and cinnamon from health buff Romy Sia who also owns Healthy Options natural products store:

Honey is 35 percent protein and contains half of all the amino acids. It is a highly concentrated source of many essential nutrients like large amounts of carbohydrates (sugars), some minerals, B-complex vitamins, and vitamins C, D and B.

Honey is a natural antiseptic and good for burns and wounds. Honey is used for sweetening foods and beverages. Thus, people with diabetes or hypoglycemia should be wary when taking honey and its by-products. They wreak as much havoc on blood sugar levels as refined sugars do.

Other sweet reminders: Buy only unfiltered, unheated, unprocessed honey. And never, never give honey to an infant under one year old. In its natural form, honey can contain spores of bacteria that cause botulism. These spores can colonize the infant’s digestive tract and produce the deadly botulin toxin.

And then there’s cinnamon, so popular in this spice age. Cinnamon has the following ingredients: cinnamic aldehyde, essential oils, eugenol, metholeugenol, mucilage, sucrose, starch, and tannin. It spices up our life – it helps relieve diarrhea and nausea, counteracts congestion and aids in the peripheral circulation of the blood. It also enhances digestion, especially the metabolism of fats, and warms the body. It’s good for diabetes and weight loss. It also fights fungal infection and uterine hemorrhaging. A word of warning though: Cinnamon must not be used in large amounts during pregnancy.