I’m trying to explain the idea which is in my mind. It might sound crazy but I just want clarity on it.
Suppose I partner with some brands like Reliance Digital, Myntra, and other similar online/offline stores. I promise to bring them customers and ask them to provide special discount to all the customers which I bring to them. And I’m sure they are happy to give a discount because I’m saving their customer acquisition cost by giving them a direct customer from my platform. On the other hand, I’m giving an opportunity to my users that they can make SIP on my platform for 6-9-12 months and in the end they get 10% discounted coupon card which they can use on my partnered stored and at the end of the maturity period they can get their principal amount back.
Now the money of users will be in my bank account till maturity. Now just like insurance companies can I use that money to Invest and trade in the market? ( Ofcourse It’ll be my responsibility to make the user’s money safe. )
I know It sounds kinda unethical but I’m just looking for some information only.
The first para was all ok - You getting into partnership with major stores and getting a discount from them and thereafter you convince your clients to park money with you and on maturity get 10% discount. All this till now was ok.
Second para - This is what fraudsters do. I hope you understand this clearly. There is nothing more to explain on this. It is not unethical it is pure 100% fraud. Do read about how FTX collapsed and what that guy did. Something similar. You give reference to Insurance company. Any company worth its salt needs capital and this is what the promoters inject. Where is this amount in your business model to check that you take risk upto the capital amount.
This is what unethical promoters do at Corporate level take the money from customers and use it for their own personal purpose and when they cannot repay, they just run away, As long as things work, they will floursh. Havent you heard of various chit funds etc closing down.
There are dime a dozen guys out there trying to do this. I am sure if you could plan upto this level, you are aware that using public money for something else is FRAUD.
I would have appreciated if you would have written the second para as the money so collected will be placed in FD until maturity of the SIP and the customer will get 10 % discount and I make money from the float or interest amount.
Even if the second para was amended, who in their right mind will give a SIP for consumption. I have heard of this business model being used by few jewellers in south India. Their modus operandi was every customer to make a monthly contribution and eventually they get a discount and buy their fav jewellery. Not sure how many lost their money in this SCAM.
Thanks a lot for the clarification. I’m well aware that using customer’s money for personal benefits is nothing more than a scam. There’s an app called HUBBLE MONEY, where they exactly do the same as I explained in the first pera. But the money is been kept in the bank, not in FD. So I was just trying to extend the idea further. I don’t have any bad intentions.
This is funny. I remember the time my sis and mom had bad time with this and since then never went side of physical gold much and decided paper assets are way better.
So the modus operandi is like this. I think it’s called gold chit or some scheme name. I don’t remember properly. But montly we make payments, based on price of gold for that month, gold grams are added to the account. When price is high less grams are added, when its low more grams are added. So it’s basically like SIP except we accumulate gold grams instead of NAV units.
So one fine day my mom and sis had enough grams to buy a chain. After selecting the chain they wanted to buy, the jeweller deducted weight of the chain with the gold grams accumalated in account. Now for the remaining grams(it was 4K back then), they said we need to buy minimum more 10k worth gold item to claim it means we need to spend 6k more. That’s the scam. Encashing was even a bigger scam. So that 4K, my mom & sis tried to encash, but those jewellers said only half of the amount can be credited back in cash and minus 4% from it. So where the gold accumulation units were worth were 4k , 2k minus 4% and some charges(scam charges)
they returned 1750 in cash. They said it’s in terms and conditions in fine print , rules. I think this still exists today.
this scheme called gold bhishi scheme or सुवर्ण भिशी योजना . Many innocent people lost their hard earned money in these schemes. most of jewellers ran away after collecting huge amount.
Due to regulations, they changed name to advance pay scheme or similar names.