Compensating victims of fraudulent MLM companies

Many of us might not have heard about the Multilevel Marketing (MLM) company, Metaverse Foreign Exchange (MTFE) Group Inc. It used to claim itself to be a trading service provider for online investment in foreign exchange, commodities, stocks, cryptocurrency and other products. But in reality, it was nothing but a Ponzi scheme, promising potential investors high returns on their investments in a short span of time. Interestingly, the company did not have any office in Bangladesh; neither did it have any staff. However, tens of thousands of people in the country trusted it and invested their hard-earned money in the the online investment firm. It was seemingly an easy process. What the investors needed was just download an app, deposit money in its virtual wallets, log in there for an hour every day and earn a 30 per cent monthly return.

The online investment firm also followed MLM (multilevel marketing) plans. If any investor could make others join the scheme, they would get even more lucrative points and rewards. Until last week, the profit and capital gains were shown accurately and it showed loss only one day a week. Investors were under the impression that losses were natural as it was a business. On August 17, a notification appeared on the MTFE app saying that it was facing loss. And so it could not deliver promised returns. So, , all the money invested is lost. The victims of the scam are now unable to reach any of the people involved with the company. Many have lost their entire lifesavings.

The MTFE incident is a reminder of fraudulence by other MLM companies like Destiny and Jubok. Years ago, thousands of people got involved with these companies that defrauded millions of taka from investors all across the country. Some of the key actors of these MLM companies are in prison now. But the victims have not yet received a penny back. So, question can easily be raised whether the victims of MTFE scam are going to get their money back. If law enforcers and investigators take effective initiatives, it is not impossible to trace the culprits and bring them to justice. There are a number of Messenger and WhatsApp groups through which the perpetrators used to lure common people to invest in the scheme. If these criminals could be identified, the victims would have the chance to get some of their lost money back.

Ponzi schemes have been criticised for decades. But those are still operating today. The question is, why do people continue to fall for such schemes? The simple answer is everyone wants easy money. People tend to look for shortcuts, but it is not always greed that pulls them to these schemes. The said MLM company, MTFE, was disguised as a genuine organisation and many considered that it provided an attractive investment opportunity. This type of scheme takes advantage of the financial system to embezzle millions from unaware investors. In the beginning, investors are promised high returns and the investment appears to be profitable. Consequently, new investors are attracted to the scheme. The early investors are paid off with the money from the new investors and the cycle continues. If we could make our people aware of such fraudulence and make them financially-literate, it would be possible to tackle this type of fraudulence.

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