Saturday, 29 April 2017

Doing something right?

I once saw an interview with the head of an international human rights organisation and he said that he knew he was doing something right when on the same day a fascist dictator called him a communist and a communist dictator called him a fascist.

Sometimes we get that feeling as well. We just know we’re doing something right.

The first piece of good news was about Xango, a juice marketed using a multi level marketing scheme. We reported and broadcast about Xango in February and March, warning people to avoid it. If you believed what its salespeople were saying, Xango really is miraculous. Its proponents say it can “combat” cancer, diabetes, leukemia, Alzheimers and dementia and can even “improve HIV” although I don’t think they’ve thought that last claim through properly. It can “improve HIV”? I’m not sure that’s what they really mean. However, whatever they think it can do, it obviously can’t do any of these things. If it could, someone would have been awarded the Nobel Prize for Medicine by now and probably the Nobel Prize for Peace as well. They would deserve both. And for P350 for each bottle I’d expect something wonderful to happen with every sip.

Products like Xango are dangerous and the people selling them should be ashamed of the things they’re doing but the good news is that they’ll soon stop. In March the Xango head office sent out an urgent message down through their pyramid instructing them “to remove all health claims about Xango ASAP”. Clearly they realised that such claims were dangerous. Or maybe just likely to threaten their profits.

Just last week things went even further. A press release from the Ministry of Health and Wellness pointed out that Xango juice was being “sold across the country without the approval of the Ministry of Health as a medicinal product”. It went on to say that the public “should be aware that the product is just fruit juice blend and does not have proven medicinal properties and therefore cannot be marketed and sold as such.” They ended by asking people to report anyone making these preposterous claims about Xango juice to the Drugs Regulatory Unit, the Food Control Unit and the Police.

The silly thing is that if they’d just sold it as a fruit juice that’s full of vitamins and nutrients and that tastes really good nobody would have had a problem, certainly not me. It was those dangerous claims that outlawed the product.

So a pat on the back goes to the Ministry of Health and Wellness for taking action to protect us all.

Another sign we’re doing something right was the opposite experience. We got attacked.

Earlier this month we commented on an award scheme called the “International Quality Summit Award”, run by a company in Spain called “Business Initiative Directions”. Various people had received surprise emails from BID, announcing that they’d won an award and inviting them to collect it at a gala dinner in New York. It was never entirely clear how they’d won, what criteria had been used to decide the winners and what qualified the company to award anything.

In Mmegi a few weeks ago I mentioned this and also reported the extraordinary cost of receiving the award.

The attachments in the award email explained how award winners would get to attend the two-day event in New York. They would start by paying the company “participation costs of 4,200 euros” to attend. That’s about P45,000 and for that they’ll get “Two invitations for the IQS Gala Dinner Ceremony”, a trophy, a certificate, a manual of graphics they can use to market their award, a press release, some photos of the winners getting the award, “two gold-plated lapel pins”, an opportunity to speak at the ceremony and two nights in the Marriot Marquis Hotel where the ceremony will take place.

The small print then explained that the hotel accommodation “will be provided in one double occupancy room”. So, in summary, for P45,000 the winners get dinner for two people, two nights in a hotel room that they must share with a colleague, a trophy, two lapel pins, some photos and a whole lot of paper. And then there’s the travel costs. In total, I reckoned the total cost of receiving the award would be about P75,000.

But maybe that’s what it costs BID to run the event? I don’t think so. I checked the hotel and the costs of the room would be about P6,000 and even when you add on the hire of the conference rooms and all the trinkets winners receive, I suspect that BID make a profit of at least P30,000 for every award they give away to the companies fool enough to part with that sort of cash for the privilege of attending.

So that’s the background. Then came their response. On their Facebook group they posted a long, rather incoherent message about us.
“The so called Consumer Watchdog Botswana is part of BES a company that provides consultancy and marketing oriented services for companies. They are NOT an NGO and what they really are is the enforcer of sorts for BES. A communication bully that denounces companies and organizations and forces them to buy BES services to be release from their constant online attacks.”
They go on to suggest that what we do is to use “the fake NGO Consumer Watchdog Botswana to denounce a company, claiming that they have low quality, that their are a scam or any other absurd claim. Then they use BES to offer services in marketing and training ‘to improve’ the company.”

They end by saying that we “are not evil per se, but it is shameful that they have to blackmail companies into it.”

Obviously none of this is true but do you get the impression they’re angry? I’m not surprised. Not only did we call into question the merits and values of their awards schemes but I imagine they’re unhappy about something you find on Google. If you search for “Business Initiative Directions” the first hit is their web site and the second is a warning about them from us in 2010.

You know you’re doing something right when the bad guys get angry and attempt to get their revenge.

Friday, 28 April 2017

The Voice - Consumer's Voice

Is Zurich Prime trustworthy?

Hello Mr Harriman, please advise me about forex trade with Zurich Prime in the UK. Is it a good investment?

I saw them on the internet and logged on and actually registered but I haven’t put any money in the account and immediately I got a call from someone called Ross in the UK who was encouraging me to invest and enjoy the rewards. Now I want to know if its not a scam, please help me, thank you.

I’m glad you got in touch before you sent any money to these people.

Firstly, trading forex is a very high risk activity. It’s a very good way to lose a lot of money very quickly indeed. What companies like Zurich Prime often neglect to tell their potential customers is that it works both ways. Yes, if you can correctly predict changes in the exchange rates between currencies you might make some money but they conveniently forget to tell you that it also means you can lose your entire “investment” almost immediately if the exchange rates go the other way.

Despite what they told you, even though Zurich Prime gives an address in London, they don’t seem to be based in the UK. In fact, they seem to be based in Romania and have a very bad reputation. It was quite easy to find comments from a variety of people who had lost a lot of money with them. One said “when you deposit your money you will never get it back. All they want is for you to keep depositing money without you being able to withdraw it.” Another said “Zurich prime is an absolute fraud, I would never trust them with anything i am not even sure that they know how to trade. they just made me lose my money on purpose on the market because I wanted to withdraw it.”

Another problem is that Zurich Prime appear not to be licenced or registered in any way with any official regulator of financial services anywhere in the world. That means that you have no protection if something goes wrong. There will be no one to turn to.

In 2015 the Financial Conduct Authority in the UK issued a warning about the company, stating that they had “been providing financial services or products in the UK without our authorisation”.

Another warning sign is how quickly and enthusiastically someone called you and was encouraging you to invest with them. I respect enthusiasm but whenever a salesperson seems desperate you know something’s wrong.

I think you can guess what I’m going to say, can’t you? Please don’t waste your time and money with Zurich Prime, they seem far too high a risk.

Should she get more?

I need an explanation and am hopeful that you will help me. My mum worked for a large company as a cook from 1990 until 2003 when they were retrenched. She was in a pension fund but she ended up transferring her money (P29 000) to another company in 2004. Her policy document indicated that it will mature in February 2017 and it was written that her money will be P115,000. It said that she will choose whether she wants that 115k cash or 1/3 of that which is P38,333 and then she gets P802 per month pension. So they paid her just P83,000. BURS confirmed that tax was not supposed to be deducted. So please explain to me. Is it possible that she goes back to the company and claim her P32,000 back? Thanks in advance.

I think there’s been some misunderstanding about how this policy worked. The policy documents you sent me made it very clear that the figure of P115,000 that your mother was given was just an “illustration”. It explains that “the illustrative values shown above are not guaranteed” and that “they provide an indication of the value of the Policy”.

The growth in the value of a policy like this can’t always be correctly predicted. The economy can go up but it can also go down. As you probably know the world’s economies have been performing poorly over the last few years and I suspect that explains why your mother didn’t get the growth she hoped for.

The lesson is always to treat the “illustrations” made by financial advisors with considerable skepticism. People selling financial products are often tempted to exaggerate the likely profits or earnings customers make. That’s understandable, they’re hardly likely to undersell their products but they do have a responsibility to be realistic when they suggest how much money you might make.

Saturday, 22 April 2017

Which do you want to be?

The same old questions keep coming in.

I’m not complaining about them, in fact none of the Consumer Watchdog team are impatient about them because the questions we’re asked are all so important.

We’re asked, for instance, repeatedly about hire purchase and how readers can get out of the mess hire purchase leaves them in (they can’t). They also ask us about contracts they’ve signed, wondering if they can escape them (they can’t). They ask us about whether they can have their insurance policy premiums refunded after they cancel a policy against which they never claimed (they can’t).

Most recently, there have been two very commonly asked questions, ones that people ask us over and over again.

The first is whether they should “invest” in forex.

Let’s start at the beginning. Forex is an abbreviation for “Foreign Exchange”, the process of exchanging one currency for another. Anyone who’s travelled internationally will know the process. However, you’ll often see Forex being advertised as a way of making lots of money very quickly. The idea being sold is very simple. Sign up on an online trading platform, send them money and you can start trading between various currencies, trying to buy some cheap and sell them when they improve in value.

It sounds simple but the truth is very different.

Despite what the salespeople will tell you, Forex trading has the potential to ruin your finances. A reader contacted us asking about one particular web site that offers to multiply (“leverage” is the technical term) your investment by up to 200 times, effectively giving you millions of Pula to trade with. What they neglect to tell their potential customers is that it works both ways. Yes, if you can correctly predict the fluctuations in the exchange rates between currencies you might make some money but they conveniently forget to tell you that it also means you can lose your entire “investment” almost immediately if the exchange rates go the other way. Within minutes of searching online you’ll find many stories of people who had lost millions in moments trading Forex.

Another issue that the forex salespeople neglect to mention is that forex trading is competitive. As a forex trader you’re trying to outwit and be smarter that other forex traders. For everyone who bets on the Dollar, Pula or Yen and wins, someone else loses. But who exactly are you fighting against? In fact, you’re probably not competing against other normal people like you and me, you’re actually competing against experts with PhDs in mathematical sciences employed by banks and investment companies and increasingly against highly developed algorithms running on massively powerful supercomputers.

Do you really think you’re likely to win when you’re fighting against people and machines like these?

People better qualified to comment than me, such as the North American Securities Administrators Association, have commented that “forex trading by retail investors is at best extremely risky, and at worst, outright fraud.”

The US Commodity Futures Trading Commission issued a warning to consumers that said: “If you are tempted to invest, make sure you understand these products and above all, only invest what you can afford to lose.”

Doesn’t this make you VERY cautious? It certainly should.

Another newer question that we’re asked very often indeed is whether people should “invest” in Bitcoin. The answer must begin with a description of what Bitcoin actually is.

Bitcoin is a currency, but not like any currency you've known before. It's a digital currency, sometimes called a virtual currency or a cryptocurrency. There are no coins or notes with Bitcoin, no bits of metal or paper, nothing you can put in your wallet or purse. Bitcoins exist purely in cyberspace. Think of it as online money but nothing like MyZaka, Orange Money or eWallet, they’re just ways of moving Pula from one place to another. Bitcoin is a currency itself.

And that confuses people. What confuses them more is the technology behind Bitcoin. Terms like "blockchain", "distributed ledger" and "Bitcoin mining" are hard to understand unless you're an expert. There's also the simple confusion that your money is "out there" somewhere and not in your pocket. That's something new and confusing.

But Bitcoin is real. It’s very high risk, very volatile and the value of Bitcoins has been known to drop dramatically as well as increase dramatically but it’s a real thing.

The problem is that as well as Bitcoin there are plenty of schemes pretending to be like Bitcoin. Schemes like OneCoin, Pipcoin and also the various pyramid and Ponzi schemes like MMM Global and the Bitclub Network. None of these things are real in the way Bitcoin is real. They’re all just exploiting our ignorance of these new technologies.

We had some news recently about how dangerous these fakes can be. In Kazakhstan the Ministry of Finance’s Economic Investigation Service arrested a number of OneCoin “investors”, describing it as “a criminal scheme”, suggesting that as much as US$7 million might have been taken from victims.

Onecoin also recently had many of its accounts in Germany frozen by the German Federal Financial Supervisory Authority once they realised that it was “one of the most dangerous money games of recent years” and that it was probably a “collaboration between the Bulgarian and Russian mafia”. It’s estimated that as many as 25,000 victims might have lost as much as $424 million, over P4.4 billion.

And guess what? None of them will get a single thebe back. Organised crime syndicates and the Bulgarian and Russian mafia aren’t going to do the decent thing. Criminals don’t offer refunds.

The lesson is simple. Anyone selling any scheme who claims you can get rich quickly without being a certified, qualified and a recognized financial expert is almost certainly lying. Worse still, they’re not just lying, they’re actively trying to steal your money. Your choice is simple. Would you rather be the cautious member of your family and circle of friends who thinks before handing over their life savings or the one who gives away their money to the first hoodlum who walks past?

Your choice.

The Voice - Consumer's Voice

Must I pay?

I took my car to the dealer on 3rd of April 2017. My car made some noise/sound when driving. I got a call from them that afternoon, and they informed me that they have been able to establish where the noise was coming from, and as such they have to order some parts from South Africa so that they can fix the car, to which I agreed.

On Friday 7th, I received a call them informing me that the car had been fixed and was ready for collection. They gave me an invoice which I signed, and that was covered by the service/motor plan. When I left with the car, I realised that my car still had the same noise but the dealer had already closed.

On Monday I took my car back and I was referred to one of the service managers. We test drived the car together, and he promised that he will make sure that the car is fixed. This afternoon, I got a call from them informing me that they have identified the source of the noise, and that some stones had gone into some part of the wheel, and they are the source of the noise. He further informed me that they have to open it up, and remove them, and I will have to pay since that is not covered by the motor plan.

Now my concern is that I cannot be made to pay for the same thing twice. I signed an invoice of around P3500, which was taken care of by the motor plan, and now I have to pay cash again for something that they failed to fix on Friday 10th. They ordered parts and attended to something that was not the problem, and now that they have identified the real problem they want me to pay. Kindly advice if I have to pay again or not. I am a bit confused right now.

I’m also a bit confused. You didn’t pay for the original work they did, did you? That was covered by the motor plan and didn’t actually cost you anything at all. Or am I missing something?

If they’d correctly discovered the problem the first time they would have asked you to pay for it because it wasn’t covered by the motor plan, wouldn’t they? Either way you would have been responsible for the repair work they did. All you’ve suffered is the inconvenience of losing your car for several days when they fixed a non-existent problem.

Yes, in answer to your question, I do think you need to pay for the work they plan to do.

I want my debt repaid!

I don't know if this falls under your scope of work or action. I have engaged a debt collector to collect debt from someone. The amount is around P3000 and I paid P500 for the service.

The whole amount was paid to the debt collector but he have since failed to pass the money to me. I engaged him by October 2016 and they had promised to have closed the case by December 2016. He is no longer taking my calls or even replying to my sms.

Thus I don't know if you can offer me any assistance in such a matter.

It’s ironic, don’t you think, that you might need to hire a debt collector to chase a debt collector?

Part of the problem with debt collectors is that the industry is entirely unregulated. Unlike many other industries that have a body like NBFIRA overseeing them, debt collectors are entirely uncontrolled. They’re not like deputy sheriffs where there are strict rules about their conduct. Anyone can call themselves a debt collector and start collecting money on other people’s behalf.

It’s one of the few areas where I think there’s needs to be some intervention from Government. We hear so many times exactly the same story as you’ve told. Debt collectors take money from their clients such as you and then appear to do precisely nothing to earn it. I understand that they might be doing work behind the scenes but they need to give you some sort of report about that. You’re entitled to regular updates on the progress they’ve made and some indication of when you’ll get the money you’re owed back.

First we need to find the guy. Send me his contact details and I’ll do my best private eye impression. If we can find him we’ll threaten him with debt collectors, the Smalls Claims Court, The Voice and anything else we can think of that might frighten him into doing the decent thing.

Saturday, 15 April 2017

Standards (we need them)

The original meaning of the word “standard” referred to a flag, the sort of flag an army would fly in a battle so their troops, not always the most organized of people, would know where to go after they overcame their bloodlust and confusion. It was the place they tried to be. It was an objective.

And that’s what standards are today. We have targets, principles and benchmarks that our managers or boards set for us. They’re places we’re meant to go. A standard might be to answer the phone within three rings, to respond to enquiries from prospective customers within twenty-four hours or to resolve a complaint within seven days.

In other words a standard is something that most companies miss.

You’ve only got to see the posts in our Facebook group to see this. We get so many posts complaining about companies that simply fail to meet basic standards of courtesy, responsiveness and basic business sense.

But there’s another type of standard that I think is more important. The standards you see emerging from the Botswana Bureau of Standards. You’ll have seen notices in Mmegi and now online from the Bureau inviting people to comment on draft standards on hundreds, perhaps even thousands of different things, from adhesives to eggs and from kitchen cupboards to cement pipes. It’s hard to find any area of life where BOBS hasn’t approved a standard regarding the quality of goods than are used in Botswana.

But here’s a critical thing. Many of these standards are voluntary. They’re not compulsory. Just because there’s a standard for something it doesn’t automatically mean that it’s illegal not to reach that standard. The best example I know is the general standard for quality management, ISO 9000. This set of standards covers how organisations maintain the highest standards of customer care, internal quality control and management. And it’s a voluntary standards and that’s the way I like it. I don’t want a set of rules saying that customers must be respected, treated with courtesy and always satisfied. The reason I don’t want such rules to be compulsory is that I want there to be variation. I want companies to be able to choose how well they deal with customers so we, the consumers, get to choose who succeeds in business and who fails. I want that power to be in our hands, not someone else’s. Perhaps the best weapon we have in the battle for good service is the power we have to demolish suppliers who offer bad service. We, the consumers, the market, get to decide.

I also believe in choice. I want to be able to choose a builder who uses slightly better, BOBS-certified products rather than the perhaps slightly cheaper builder who uses inferior, not-up-to-standard products. It’ll cost me a little more and I might need to save for a little longer to afford it but the result will be a better, longer-lasting, cheaper-to-maintain house.

But there are certain standards that are compulsory. Not many compared to the voluntary standards, but they’re the important ones. They’re the ones that really matter, that have a direct impact on public safety. They include a range of household electrical equipment such as sockets, plugs and adaptors, electrical irons and water heaters, all things that if they malfunction, can burn down your house. If your house does catch fire maybe you’ll be comforted by the compulsory standards for fire extinguishing equipment that help ensure they work properly when you need them.

On the road you should also feel some comfort knowing that the tyres you bought for your vehicle must have met their standards we well, at least on the day you bought them. What you’ve done to them subsequently is more a job for the police to observe.

At the shops you’ll also be protected by the compulsory standards that govern dairy products such as milk and yoghurt and also peanut butter, canned fish, cereals and pulses.

Perhaps most importantly of all there are standards for drinking water, either from the tap or in bottles. Anyone who supplies you with such water must make they maintain those basic standards.
But there’s more. Did you know there are compulsory standards that cover the wax crayons that our kids use to ensure they’re not full of toxic chemicals? Did you know that there are also several compulsory standards relating to the safety of children’s toys? I suspect that a lot of the toys you see in certain stores would fail those standards miserably.

And then there’s the big one. The standard that has probably caused more controversy than any other in the history of standards in Botswana. Plastic bags.

There’s been controversy about plastic bags for years, what with the reported introduction of a “plastic bag levy” some years ago, something that turned out to be a fiction, despite what the media reported. There never was a levy, no money was collected, no environmental protection efforts were funded by it. It didn’t exist. All that existed was a compulsory standard for plastic carrier bags that required them be of a certain quality. What happened was that stores were forced by this compulsory standard to use better quality bags and the cost of this was passed straight on to you and me, the customers. The answers given by our politicians about this recently simply confirmed this. There is no plan to ban plastic bags, just the continued enforcement of an existing standard.

Meanwhile, I believe very strongly that there should be a plastic bag levy. In fact, I think there should be a levy charged on everything that damages our environment. We need to catch up with the rest of the world that is making us, the people who consume and waste so much, the people that are causing the damage to our environments, to pay to help fix the problem.

While I might be a consumer rights advocate, I’m also a consumer responsibility advocate and the sooner we’re forced to take some responsibility the better. It’s not just industry that needs to meet some standards, it’s you and me as well.

Friday, 14 April 2017

The Voice - Consumer's Voice

Where’s my TV?

I bought LG39 inch TV through high purchase in December 2013, I have completed paying for this TV on in December 2015, but it got damaged while still under warranty. The TV was returned to the store who promised to fix it on January 2016. They gave me a temporary Hisense TV whilst mine was to be fixed. I waited for the replacement of my LG TV for almost a year because it was out of stock, as they have promised to replace it with a new TV.

However they failed to fix my TV and their Hisense TV has since broken down. In February 2017 they gave me another TV which according to record was used in that shop as a Demo TV. This TV was dumped at my home with no papers whatsoever. When I told them about their TV, the only answer I got from them was “you always damage TV sets”. I am still waiting for them to collect their Hisense TV and give me my LG TV or alternatively give me my money so I can by elsewhere.

This is tricky. The first thing to understand is that the store is obliged, during the warranty period, to either fix the TV when it broke, or to replace it. However, I don’t think you have a right to have the TV necessarily replaced with an entirely new one. You don’t mention when exactly the TV stopped working but let’s assume it was 18 months after your first received it? In that case you’re entitled to a TV that is equivalent to the one that stopped working, the one that was now a year and a half old. Not a brand new one. Meanwhile the TV must be roughly equivalent to the broken one. It must be of the same quality and functionality. If the former demonstration TV they gave you is roughly the same quality as the original then I think you’ve done reasonably well.

It’s also important to understand that you’re not going to get your money back. As far as the store, and the hire purchase agreement are concerned, the deal is done, You were given a TV for the period of the agreement and they got their money. That transaction is over.

Where’s my laptop?

I bought a laptop on high purchase and it got stolen from my house as it was broken into while we were away attending a relative's funeral. However, I reported the issue to the shop and was asked to submit all the necessary documents from the police as proof of theft. An officer from the store also called in at my house to do assessment for further verification of theft.

I was then asked to wait while the necessary procedures are done hence be given a replacement thereafter; that was in June 2015.  Up to now I haven't received any response from them but rather I recently received a phone call from a debt collector's office that I am owing the shop money and that I am requested to pay such monies or I will face some repossession. I'm asking for your help with regard to this.

I know I shouldn’t find it amusing but what exactly do they think they can repossess? Does their credit control department not speak to their claims department? Don’t they know the laptop has long gone?

The problem you’ll face is if you owe them money. Did you stop paying your instalments after the laptop was stolen? If that’s the case then you’ll be in breach of the hire purchase agreement and that almost certainly means they’re no longer obliged to replace it.

I’ve said this before but one of the many problems with hire purchase is that you don’t own the item you’re buying until you’ve made the final payment. Until that moment, you’re just hiring the item, that’s why it’s called HIRE purchase. The laptop still belongs to the store. It’s also important to understand that the hire purchase agreement you signed will say very clearly that you only have rights to possess the item, or to have it replaced if its stolen or damaged if you’ve kept up with the instalments. If you’re in arrears you have no virtually no rights, just obligations.

I suggest you contact the store urgently and find out how much you owe them. Then you’ll have to pay it, even without having the laptop, but that’s how hire purchase works. Horrible, I know.

Friday, 7 April 2017

Do you want an award?

What about a fancy certificate that you can frame and put up on your office wall to impress visitors? What about a gold-painted trophy you can put on your desk. That’ll impress people and bring in new business, don’t you think?

You could fake one I suppose, that’s easy enough. Like fake degrees, anyone with a laptop, some high-quality paper and a color laser printer could produce a fake award in half an hour. But that’s not so impressive.

What about getting a real award? Or a semi-real award?

We’ve heard from several people in the last few weeks about an email they received from “Business Initiative Directions” in Spain, announcing that they’ve won an “International Quality Summit Award”. The email begins:
“XXX has been selected to receive the International Quality Summit (IQS) Award in the Gold category at the International Quality Convention which will take place in New York, the United States of America, on Monday, May 29th. The decision to present this award is the result of research and analysis carried out through Quality Hunters, leaders, entrepreneurs and experts in quality, directed by Business Initiative Directions (BID), to recognize the contribution of XXX in terms of Leadership, Quality, Innovation and Excellence.”
The email goes on about how carefully they’ve selected the winners and promises that the award:
“will strengthen your position of leadership and help you to improve the growth and visibility of your organisation.”
Impressive, don’t you think? Or is it?

Other than being a company based in Madrid, Spain, who exactly is this company, Business Initiative Directions? What qualifies them to give awards?

That’s a very difficult question to answer. Their web site makes it clear that they have a history of giving companies awards but that doesn’t explain how they’re qualified to do so.

I think there’s a simpler question to answer. How do BID benefit from this award ceremony in New York? What’s in it for them?

They make money from it. A lot.

The attachments in the award email explain how you get to attend the two-day ceremony in New York. You pay BID “participation costs of 4,200 euros” to attend. That’s about P45,000 and for that you get “Two invitations for the IQS Gala Dinner Ceremony”, a trophy, a certificate, a manual of graphics you can use to market your award, a press release, some photos of you and your colleagues getting the award, “two gold-plated lapel pins”, an opportunity to speak at the ceremony and two nights in the Marriot Marquis Hotel where the ceremony will take place.

The small print then explains that the hotel accommodation “will be provided in one double occupancy room”.

So let’s summarise what you get for your P45,000. Dinner for two people, two nights in a hotel room that you must share with a colleague, a trophy, two lapel pins, some photos and a whole lot of paper. Did you notice what was missing from that list?

The travel costs to New York. I did some amateur research and this is what this “award” will actually cost you, all conveniently converted to Pula. P45,000 for the ceremony and shared hotel rooms, around P25,000 in economy class flights from Gaborone to New York, maybe another P5,000 in transit, food, drink and living expenses, making it a total of P75,000.

I also checked the price of the hotel rooms for the dates in May when the ceremony is taking place and the basic room rate for two nights will be about P6,000. Given that BID will have booked many rooms for the people attending I’m sure they got a special rate. And yes, remember that the ceremony fee includes the room so even if you decide to stay in a cheaper hotel of with your cousin who lives in New York, you’re still paying for the Marriot Marquis Hotel, whether you’re there or not. Let’s be generous and add in another P5,000 per “winner” for the conference room, dinner, photographer and the rather vulgar trophy you receive and I suspect that BID make a profit of at least P30,000 for every award they give away to the companies fool enough to part with that sort of cash for the privilege of attending.

So that’s why they’re offering these awards to companies around the world, companies that might have no track record of ever achieving anything or of actually deserving an award. It’s all about the money.

And some psychology. Here’s another thing about why these awards are persuasive, why they sucker people into parting with such large amounts of money. It’s what psychologists call cognitive dissonance, the stress experienced by someone simultaneously holding contradictory beliefs. The knowledge that they’re spending P75,000 for a trophy, a dinner, some photos and a certificate they secretly know are probably worthless leads them to self-justification: “I’m not stupid, the fact that I spent all this money must mean it’s worth it.” Their critical faculties dissolve and they construct elaborate justifications for their actions. The fact that they have a trophy for their desk, a certificate for their boardroom wall and a logo for their web site are enough for them to suppress the stress they felt when they realised they just wasted someone’s salary on a worthless prize.

Then they’ll discover something else. Something that will burst their balloon, something that might bring their cognitive dissonance back with a vengeance. Check this for yourself. Google “Business Initiative Directions” and you’ll find that after their own web site, the third most popular response is from guess who? Yes, Consumer Watchdog, warning people in 2010 about their awards scheme and suggesting that people shouldn’t waste their money on something so suspicious.

Do you really want that, an award that many people question, that your customers, competitors and employees might very quickly conclude is bogus? Is that the sort of award you want to support your fragile ego? Wouldn’t it be better to invest the P75,000 in some market research, staff training or new web site?

Better still, why don’t you spend the money on your own awards ceremony. Spend it on your staff and give them a dinner to remember and some prizes for the best performers. That’ll improve your business much more effectively than a silly trophy.