The latest protest staged by clients of Unity Life International (ULI), which has been operating assurance schemes without authorization, reminds [break] one of the old adage: You can´t fool all the people all the time. Finally, ULI´s clients in Ilam and Biratnagar have started realizing that they were fooled by a fraudulent offer and have started demanding their money back.
The clients, who were denied full refund of their money by ULI, have knocked on the doors of the local administration. Unfortunately, the local administration has not taken convincing steps to protect consumer interests.
By offering insurance and banking schemes without obtaining legal permission to do so, Unity had made a mockery of insurance and banking laws. Worse, Nepal Rastra Bank (NRB) and the Insurance Board (IB), the regulatory bodies responsible for overseeing and regulating banking and insurance, have done nothing to uphold the law.
Not that the regulators were unaware of Unity´s illegal operations; two years ago, NRB and IB along with the Securities Board Nepal and the Company Registrar’s Office had issued a public notice warning people not to buy schemes offered by unauthorized companies. But they failed to even mention Unity’s name in the statement, let alone take action against such firms. Left free to deceive people, the company has gone on to rake in over Rs 6 billion from 650,000 clients, through fraudulent offers and bogus claims.
Marketing strategies based on the pyramid model have proved the world over to be unsustainable. For this reason many countries have banned them. Nepal, too, had imposed restrictions on such marketing practices in the wake of the Gold Quest scam, in which tens of thousands of Nepalis were cheated in 2003. Unfortunately, the Home Ministry, which issued the ban notice against Gold Quest, has continued to maintain silence over Unity even as billions of rupees belonging to a huge number of people stands at risk.
The company has collected money not only from Nepalis at home, but it has also sold its packages to poor Nepali workers in Malaysia, the Gulf countries and Hong Kong, among others. The company claims that it will pay off its overseas liabilities from Nepal, something that would fall foul of the Foreign Exchange Act. In the process, the company has also flouted international anti-money laundering norms.
The case of Unity has once again proved how easily Nepalis tends to fall for rosy promises and overly generous offers. The company has fooled people from urban areas and the hinterlands alike. The authorities, entrusted with protecting consumer rights, should immediately intervene against Unity, and also invest resources and energy in raising people´s awareness.
If the government and its agencies fail to act now, the magnitude of the Unity problem will only grow. Once Unity crashes, which is only a matter of time, its clients will come knocking on the door of the government and ask why it failed to stop such fraudulent company, why it was allowed to cheat them? We are sure the government will have no plausible answer at that point.