Financial Times

GoldQuest customer told no point in filing police complaint
Police have advised a GoldQuest customer, unable to recover her initial investment, against filing a complaint due to the absence of a law in the country to counter network and pyramid marketing schemes.

A. Chandrika Nelumkanthi de Silva of Ganemulla, Kadawatha told The Sunday Times FT that she pawned her gold jewellery to raise money to join the scheme, upon being convinced by her neighbour, a government doctor.

"He was very convincing and advised me that there is no need to worry saying that I have to invest only Rs. 36,000," she said, adding that when she collected this amount, he had informed her that the investment has risen to Rs. 46,000.

Later, she had told him that she cannot raise that much, but he had promised to contribute the balance if she collects Rs. 40, 000. When she agreed, he had gone ahead with the transaction using his credit card (which is classified as a third party transaction and is illegal) on April 26 this year.

The doctor-promoter had asked De Silva's elder daughter to subscribe to the scheme as well, and when they told him they do not have enough money, he had suggested taking a loan. "The very next day he filled an application and brought it to our house and asked my daughter to sign," de Silva said, adding that she had told her daughter to wait till she herself got a return, as promised.

She had not got any returns for three months and had asked the promoter for the money on August 2. "He told me that he will speak to the up liners about it and try to reimburse, but since nothing happened, I asked him again on August 10," de Silva said.

He had flown into a rage and told her that he will never give her the money and she can go to courts, if she so desires. She went to the Kadawatha police station to make a complaint but police advised her against filing the complaint saying there is no law to deal with pyramid schemes. De Silva says she was not properly advised on the scheme by the promoters and is now desperate to recover the money for an urgent need. "I have not completed building my house and my husband does not have a job," she said. The Central Bank has said it was bringing in laws to deal with pyramid and referral marketing schemes. (DE)

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