24 The Economic Times Wealth, May 9-15, 2011

Investing

ONLINE SURVEYS

Can you earn from

surveys? Online survey firms are luring members with promises of easy
money. Here’s what you should know before you get hooked.

BABAR ZAIDI

I
t seems so incredibly simple that you
wonder why people sweat it out to
make a living. Just a few clicks of the
mouse every week can earn you a
handsome income. Online survey
schemes are the new El Dorados for anyone
looking for easy money. You need to take
just two online surveys comprising 10-12
questions to pocket up to `900 a week. The
more surveys you can handle, the more
money you can earn.
If online survey companies are to be
believed, millions of Indians are making
bushels of money through this innovative
multi-level marketing model. “We have
almost 1.3 million panelists (members)
working for us,” says Vivek Gautam, chief
marketing officer of Speakasiaonline.com,
a Singapore-based market research compa-
ny that started operations in India about a
year ago. That is almost 1% of the total
Internet population in India. At least four
other online survey companies are active in
India right now, drawing all kinds of
fortune hunters (see table).
Meet Sudhir Sharma, an employee of a
public-sector insurance company in Delhi,
who has been in the online survey business
for the past 2-3 months. “It’s a great RAJ
opportunity to make money in your free
time,” he says. Police officers, corporate
managers, housewives, unemployed youth,
school teachers, even IT professionals, are
clicking away to glory every week.

Making losses The lure of easy lucre makes people ignore the obvious red flags in a pyramid scheme. Here are
some recent examples where the Indian investors have been cheated of their money.

UNIPAY2U VISAREV GLOBAL INDEX WING STOCKGURU INDIA

In January this year, the police in Bangladesh Another so-called bullion This Imphal-based real estate investment Claiming to be a financial consultancy firm, it
cracked down on the Dhaka-based promoters trading company, agency was floated in July 2010. It promised floated a scheme in which an investment of
of Unipay2u. This was a multi-level marketing Visarev, promised returns of up to 25% per month on invest- `10,000 (plus registration
scheme, which promised 20-23% monthly monthly income of 21- ER ments in an amusement park fee of `1,000) would
interest on investments in gold 25% in investments as EMB coming up on the outskirts
C 0 give returns of 20%
stored in vaults in foreign well as referral bonus for DE 201 of the capital of Manipur. per month. Investors
countries. It also prom- every new member roped But the 40,000-odd were given post-
ised referral income for in. The company assured that investors were left in the dated cheques at the H
RC
getting new members. it could more than double the invested lurch when the compa-
AR
Y time of registration. MA2011
Malaysia-based Uni- T amount in 5-6 months. Initially, the firm paid ny reneged on its prom-
BRU 11 All went well for a few
pay2u started opera- US cash to investors and later promised to ise and stopped paying. FE 20
AUG 10 months, but in February
tions in India in January 20 transfer the money directly to their bank In February this year, its this year, the cheques start-
2009 and folded up within accounts. Trouble started brewing in late promoters absconded. The ed bouncing. The promoter of Stockguru
15 months after defrauding 2010 when it failed to pay the promised company had claimed its head India, Lokeshwar Dev Jain, a resident of Delhi,
thousands of Indians of more amount. In February, angry investors filed a office was based in Singapore, but investiga- first came up with the excuse that the
than `200 crore. Its head honchos have been police complaint against the promoters of the tions revealed that no such office existed. The accounts of the company had been
arrested for fraud, but there is no clue Malaysia-based company. These investors marketing units in Delhi and Bangalore were temporarily frozen because of an income tax
whether Indian investors will be able to get have now formed a group to take joint action also makeshift offices. raid. Later, he simply absconded.
their money back. against the promoters.
Investing
Active online survey companies
Website Ramsurvey.com
Joining fee `3,500
Projected income `500 per week
(`250 x 2 surveys)
Contract term 11 months
Referral bonus `250 per member
Where the money The Mirzapur-based
goes: The joining fee company was set up
is used to buy a
in February 2010.
subscription for the
training material and Claims to work for
other costs, including Canon, Godrej,
referral payment. Casio, Panasonic
and Globus.
Where’s the catch? You need to pay a join-
ing fee to become a panelist. The money
goes into buying a subscription for the train-
ing manual and towards other costs. The
person who referred you also gets a cut.
However, the income projections by the sur-
vey companies suggest that the joining fee
can be recouped within 8-10 weeks.
If you join a survey company, the going
gets better if you get others to jump on to
the bandwagon. For every new person you
bring in, there’s a referral bonus waiting for
you. You also earn rewards for every survey
taken by the members you rope into the
scheme.
It is this feature of online survey
companies that makes them
appear similar to Ponzi schemes. Gold and silver
stocks to
These are plans in which the buy now
member earns by enrolling more Page 12
people in the scheme. As more
people come in, the older members
get paid from the joining fee of the new
members. This continues till no new
members can be made and the scheme
runs aground. While such schemes have
been in operation for a long time, the
Internet has helped them expand their
catchment areas. In recent time, lakhs of
investors have lost money in this manner
(see box).
Though their business is modelled on the
TVI EXPRESS
Investors in the company
were made franchisees D supposedly had magnets with curative prop-
for its travel business. O SE
By paying `15,500, they CL LY
could send thousands of JU 10
people on tours and 20
travel around the world and
earn handsome commissions.
Based in Indonesia, the company had a
complex compensation package, which
included weekly payouts, free holiday vouch-
ers at global resorts and membership in
exclusive clubs. The cracks started to appear
in April 2010, when the holiday vouchers
given by the company were found to be invalid
and the cheques too started bouncing. The
Indian operations wound up last year, but
some of its operations are continuing in
southern India.
Marketviewonline.com
`5,500
`750 per week
(`375 x 2 surveys)
12 months
5% of fee
Based in Surat and
set up in 2006, it is
one of the oldest
online survey
companies. It is
promoted by the
Pratibha Group.
principles of multi-level marketing, none of
the survey companies is a member of the
Indian Direct Selling Association (IDSA), a
self-regulatory body of network marketing
companies. All big direct selling companies,
including Amway, Oriflame, Tupperware
and Avon, are its members. IDSA secretary-
general Chavi Hemanth says the
organisation studies a company’s business
model thoroughly before admitting it as a
member. “If there is any ethical problem or
legal infringement, the company cannot be
a member of the IDSA,” she says.
A company will not make the cut if its
business plan violates the Prize Chits
and Money Circulation Schemes
(Banning) Act, 1978. The Act bans
any scheme that promises to pay
money for the enrolment of mem-
bers into the scheme.
Search on the Internet and you
will find hundreds of complaints
filed by irate members who have lost
money in survey companies. But for every
complaint, there are three posts by other
members singing their praises and
narrating how much they have gained from
these moneyspinners.
Posing as a wannabe investor, we called
up one of the members of a survey
company. He’s an IT professional, earns a
handsome income from his job and was
JAPAN LIFE
The company sold wonder mattresses, which
erties embedded inside. A mattress was
priced at `75,000 and promised
to cure the user of all sorts
of ailments. Buyers were
encouraged to get more D even greater
customers and were
O SE
promised hefty commis- CL MBER
sions of up to 20-25% of E
PT 02
the value of the mattress SE 20
sold to the referred cus-
tomer. The scheme was a
rage in eastern India before the
efficacy of magnetic therapy began to be
questioned. Some members are still trying to
sell their mattresses at prices 40-50% below
the buying price, but there are no takers now.
The Economic Times Wealth, May 9-15, 2011 25
Greenprithvi.com Speakasiaonline.com Flcadvertisement.com
`3,500 `11,000 `6,500
`500 per week $20 (`900) per week `1,000 per week
(`250 x 2 surveys) ($10 x 2 surveys) (`500 x 2 surveys)
52 weeks 52 weeks 11 months
`500 per pair $20 per member `500 per member
The company is Promoted by the The Moradabad-
promoted by the Singapore-based based company is
Visakhapatnam- Haren Ventures, it the latest entrant
based Green Prithvi started in May 2010. in this business. It
Farming, which has Claims to have ICICI was set up in
been in operation Bank, Bharti and December 2010.
since 1996. Nestle as clients.
surprisingly candid about the entire Incidentally, the Speakasiaonline.com
business. “Invest only if you can take the website has generated a lot of interest in the
risk because there is a possibility that you country in the past two months. According
might not earn any money,” he said. He also to cyber analytics site alexa.com, it is the
gave a very useful tip. “Go for companies 70th most visited site in the country today.
that have just started out. Only then will you Most of the people eliciting interest in the
be able to recoup your investment and earn company’s website are youngsters aged
well. If the company is 2-3 years old, it may between 18 and 24 years.
be nearing saturation level,” he said. In oth- So, should you become a member of any
er words, if you join a Ponzi scheme when it online survey scheme to earn money on the
is in its last leg, you stand to lose money. side? Ideally, no. But if you do want to give it
Why are these companies paying so much a try, opt for the one you know the most
for so little work? “These surveys are about, the one that is most forthcoming
conducted on behalf of our corporate with details of its business, and the one that
clients and very large market research agen- is the least costly to get into. Use the online
cies,” says Gautam. “The survey results are advantage to keep in touch with other
used in preparing commissioned industrial members and make sure that you know
research reports which are priced at lakhs about the company’s whereabouts.
of dollars.” He says some large Indian Is there an investor grievance redressal
corporates, including ICICI Bank, Bharti mechanism? No. Such schemes do not come
Airtel, Bata and Nestle, have got surveys under the purview of the Securities and
done by Speak Asia Online. Exchange Board of India (Sebi) or the RBI.
Some market research companies, The Finance Ministry too doesn’t want to
however, deny being Speak Asia’s clients. get involved. An e-mail request to the officer
Balendu Shrivastava, group business in charge of vigilance against scams and
director of IMRB International, says almost fraudulent scheme went unanswered.
all surveys by the agency are done by
surveyors appointed by IMRB. “In a few
cases we seek out specialisation of our Please send your feedback to
empanelled partners,” he says, but adds etwealth@indiatimes.com
that they have not used Speak Asia as a
partner.
QUANTUM FUNDS ONLINE
This is an online scam, where investors are
promised huge returns of up to 20% per
month on their
investments of $500
and in multiples of
$500. There are
WEBSITE
rewards if they intro- STILL ON
duce more people.
The website of quan-
tumfundsonline.com
(no link with Quantum Mutual Fund) claims
that it has the backing of the legendary
George Soros and other big names in global
financing. Though there are enough com-
plaints against the site, people continue to fall
for the bait. If one registers on the site and
expresses a wish to join, an agent gets in
touch for payment.