• Declares Questnet illegal

NYARUGENGE - The National Bank of Rwanda’s (BNR) investigations into the business practices of Questnet have revealed that the company is operating a money swindling pyramid scheme and could be involved in money laundering, The New Times has learnt.

In an email sent to The New Times yesterday, the Central Bank said that Questnet is a pyramid scheme, which is collecting money from subscribers in Rwanda and sends it outside to companies called Park King Development and DBS Hong Kong using swift transfer.

The Central Bank said its early investigations show that since January this year, Questnet has transferred a total of $500,000 (Rwf284 million) outside the country through illegitimate means.

The Hong Kong-based company has however insisted it is a direct selling entity that utilises network marketing to provide innovative products and business opportunities to its customers.

According to BNR findings, the company uses multi-level marketing businesses, which sell real products like Bio-discs and small IT materials, which are imported via DHL.

"But the underlining objective is to recruit dealers and collect their enrolling fee,” said Angélique Kantengwa, Senior Director Financial Stability at BNR.

Kantengwa said that Questnet is a fraudulent company that is not licensed to operate business on Rwandan soil. 

She said that a successful pyramid scheme combines a fake, yet seemingly credible business with a simple-to-understand yet sophisticated money-making formula.

According to the Central Bank, a weekly "interest” is paid to the member of Questnet who manage to bring two new recruits.

Katengwa said a certain amount of money is transferred to Park King Development and DBS Hong Kong on weekly basis.

She added that the number of layers of the pyramid increases new recruits who find it harder and harder to sell the product because there are so many competing salesmen.

"Those near or at the top of the pyramid make a lot of money on their percentage of the enrolling fees and on commissions for the supplied products, but those at the bottom are left with inventories of products they can’t sell.”

"These schemes exploit greed and gullibility. To enhance credibility, most such scams are well equipped with fake referrals, testimonials and information.”

The Central Bank says that amounts dwindle steeply down as the pyramid slopes.

However, Rajesh Rao, the company’s Public Relations Manager told The New Times recently that direct marketing through network marketing is not about signing up as many people as possible, but getting the product to the market.

This is the second time this year the Central Bank is warning the public to be cautious about  the reappearance of pyramidal operations or get-rich-quick  schemes in which people put their cash.

On January 13, BNR issued a public warming about the illegal character of such schemes and on the risks run by promoters and people who agree to subscribe to those criminal activities.

"The National Bank of Rwanda calls upon the public to be cautious in order to avoid the risk of loosing their savings to criminals,” the BNR statement reads in part.

The bank said that the public must know that a pyramidal operation or a get rich quick is a fraudulent stratagem set up by individuals or a group of people with an aim of making money.

Ends