Financial Times

GoldQuest customers get money back
Some customers of GoldQuest's controversial network marketing scheme, who have not received gold coins and those whose cards have been used by third parties without their knowledge, have begun getting their money back after complaining to the credit card issuer.

"Customers have about 120 days to dispute their transactions, and we have refunded the money where customers have disputed the transactions," an official of a leading card issuing bank said.

Some credit card holders, who are under investigation by authorities, have claimed their cards were used without their knowledge by third parties. GoldQuest customers who have not received their products as well as those who have found that their cards have been used without their knowledge by third parties have started to ask for and get their refunds.

Bank officials say the rules that apply to face-to-face transactions do not apply to e-commerce transactions and such transactions can be disputed 3-4 months after they are made.

Where goods have not been delivered to the customer, card holders have been generally advised by the bank to contact GoldQuest, but if they do not respond favorably, refunds have been made.

"This is the normal practice in e-commerce transactions," the official said. Customers began having second thoughts about their investments after The Sunday Times FT and Lanka Business Report television in a joint investigation revealed the dangers of investing in such easy money making schemes.

Meanwhile, Athula Lankadeva, the senior Customs officer who was investigating GoldQuest gold coin imports, fled the country for Australia after receiving death threats. (See story in main section)

The Central Bank's Department of Exchange Control is considering penalties to be imposed on those who have misused credit cards to buy products from GoldQuest. Nearly a thousand show cause letters have been dispatched by the Central Bank to participants in GoldQuest's controversial gold medal sale programme, who have misused their credit cards to send money out of the country. The regulator has received 600 replies.

"Over 90 percent of the respondents are appealing for an extension to reply and the balance have accepted the offence," L.Y. Dharmasena, Additional Controller of Exchange said.

The government last week strongly condemned pyramid schemes, promising quick Cabinet approval to draft anti-pyramiding legislation. The Cabinet discussed amendments to the Banking Act last Wednesday.

Finance Minister Sarath Amunugama told The Sunday Times FT the amendments will be presented to parliament soon. "It will be brought in as an urgent Bill," he said.

He earlier told a news conference that the government was warning the public not to invest in pyramid schemes."$30 million has flown out as a result, and we want to say very seriously that the public should not get involved in these fantasy schemes," Amunugama said.

"Basically it plays on the gullibility and greed of people who want to make money without the entrepreneurial spirit. Without working hard for it, they want to find big money, and they find that they have gone bankrupt."

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