The AEMI SCAM

Most people reading this article would have at some point in their lives taken a loan. Some would have had a good experience with the lender, be it a nationalized bank, private bank or the unorganized sector. And some would have had a pretty bad experience as well. Whichever the case, the odds and conditions for the loan would have been stacked against you.

My reason for writing this is not to discuss the one-sided conditions that are presented to the debtor (that will fill a whole book on the subject), but to inform the general public of a scam that has been going on right under our nose, under the “watchful” eye of the RBI and yet no one seems to notice it. And those who do (like brokers, dealers etc) turn a blind eye so that they can meet their numbers month on end. The scam of ADVANCE EMI (Equated Monthly Instalments) on loan from private banks.

I too have taken loans – educational loans, home loans, vehicular loans etc. Luckily the loans I took except my vehicle loan were from nationalized banks. Even though the service and speed at the nationalized banks is poor, debtors can heave a sigh of relief and rest assured that that will not be unduly tormented and robbed off their hard earned money.

But sadly I chose a private bank for my vehicle loan. At the time of taking the loan, I was not aware of the scam, nor did it cross my mind. I was one among the 1000s of unsuspecting masses eager to buy my first bike out of the salary from my first job. It was a proud moment it was and the sales man at the dealership breezed me through the formalities. I signed some papers, got the loan approved, gave my advance EMIs and cheque leaves for the rest of the EMIs and in 3 days time I had my lovely new bike. Then I embarked on the arduous task of repayment living on a hand to mouth existence.

So what’s wrong with advance EMI you ask?

As a case study, let’s assume you need to take Rs 1100 loan @ 10% pa which you will be paying off in 12 EMIs

Interest on Rs 1100 @ 10 % in a yr (12 EMIs) = Rs 110. (For simplicity’s sake lets say the interest is Rs 100.) (I know that EMI calculation is not as simple as this, but this is just a case point)

If One month Advance EMI (AEMI) is to be paid i.e Rs 100, then the actual principal taken on loan would be Rs 1000 and NOT Rs 1100 (As claimed by the bank)

And you still have 11 EMIs to pay.

And at the end of 12 EMIs, you would have paid Rs 1200.

Till here it is in line with what the bankers claim.
Now comes the not-so-apparent part of the deal.

Your effective interest % is (1200 – 1000)/1000 * 100 = 20% and NOT 10%!!! (Rs 1000 being the actual loaned amount)

Add to this the processing fees etc, and your actual interest will more than double. And if more than one Advance EMI is taken, then the actual interest % becomes even bigger (30% for 2 AEMI, 40% for 3 AEMI and so on)

This scam is not new and most of us have faced this. Only, none of us choose to question it. I wonder why the RBI is still allowing this to take place. These private banks are actually cheating people out of their hard earned money and no one seems to be taking them to task. While they claim to take 10% interest or so, in reality they are duping the consumer into paying 20% or more interest.

Recently I was faced with yet another “attractive loan offer” from a private bank.

I gave them my conditions.

1) NO Advance EMI
2) NO Pre-Closure charges
3) NO processing fees

Of course the representative of the bank was taken aback and refused to give me the loan under these terms to which I replied “That’s fine by me because all I need to do to secure a loan in this economy that we live in is to walk out into the street and shout ‘I need a loan’. So, unless u wake up and smell the cookie, it’s your loss!!!”

The Megapixel Myth

The above article (Click on the Title) has been written by one of the best reviewers ive come across. Go ahead, take a look at his site and get the advice you need before you go spending hard earned money on those 10 MP cameras!!!

Avoiding scams and fraud

You can sidestep would-be scammers by following these common-sense rules:

- DEAL LOCALLY WITH FOLKS YOU CAN MEET IN PERSON - follow this one simple rule and you will avoid 99% of the scam attempts.

- NEVER WIRE FUNDS VIA WESTERN UNION, MONEYGRAM or any other wire service - anyone who asks you to do so is a scammer.

- FAKE CASHIER CHECKS & MONEY ORDERS ARE COMMON, and BANKS WILL CASH THEM AND THEN HOLD YOU RESPONSIBLE when the fake is discovered weeks later.

- NEVER GIVE OUT FINANCIAL INFORMATION (bank account number, address, telephone numbers, CC details, Online Transaction ids, etc.)

- ONLY SHOP AT TRUSTED SITES and keep a lookout for SECURE ENCRYPTED PAGES (128 bit encryption or more) before typing in CC details for payment. The encrypted pages should be supported by providers like Verisign etc, for it to be legitimate

- AVOID DEALS INVOLVING SHIPPING OR ESCROW SERVICES and know that ONLY A SCAMMER WILL "GUARANTEE" YOUR TRANSACTION.

- ANY AND ALL "FREEBEES" AND "OFFERS" BY MARKETING PERSONNNEL MUST BE CONFIRMED IN WRITING. This is a very common fraud in this age of tele-marketing where the world is offered and all hell breaks loose.

Shop SAFE :)

A Tribute to my Mother

My mother is the sweetest and
Most delicate of all.
She knows more of paradise
Than angels can recall.

She's not only beautiful
But passionately young,
Playful as a kid, yet wise
As one who has lived long.

Her love is like the rush of life,
A bubbling, laughing spring
That runs through all like liquid light
And makes the mountains sing.

And makes the meadows turn to flower
And trees to choicest fruit.
She is at once the field and bower
In which our hearts take root.

She is at once the sea and shore,
Our freedom and our past.
With her we launch our daring ships
Yet keep the things that last.

My Mother, the sweetest...

QuickFix... The best Fix??

We live in the information age where at the click of a button a plethora of information is available at our fingertips. But are we really informed? Or more importantly do we really care to be informed? Information or knowledge is a powerful weapon. And like most weapons it can be used to do good or evil.

Let me get down to the specifics of this piece of writing through an anecdote. The other day, my wife and I went to a skin specialist to get his opinion on some pigmentation on my foot. He assured me that its nothing to worry about yet went on to prescribe around 7 medicines which he said would be available at the medical store downstairs. On my way down, I told my wife that in all probability the prescribed medicines were Steroid based. Before I went to the medical store, I called my parents (who are both doctors) to get their advice on them. And what do u know, the medicines indeed tuned out to be Steroid based. Needless to say, I did not buy them!!!

So how did I know that the medicines are probably Steroid based? Because I have been warned by my parents. They have seen the rise in use and prescription of these type of medicines by some of the new generation of doctors.

What is Steroid based medicines? Is it a health hazard? Steroids are effective and lifesaving medicines, but they can cause side effects if they are taken for a long time. These side effects include thin skin, a higher blood sugar level and weakened bones. Your body naturally makes steroids by itself. When you use steroid pills, sprays or creams, your body may stop making its own steroids. When you're under stress -- caused by infections or surgery, for example -- your body normally makes extra steroids. But if you have been taking steroids for a long time, your body may not be able to make enough steroids in times of stress. At these times, you may have to take more steroid medicine. It creates lower Immune response and heightened vulnerability to diseases.

There are way too many side effects to be mentioned here. For more details please go through http://www.asthma.org.uk/all_about_asthma/medicines_treatments/side_effects_of.html

If steroid based medicines are bad and have short term as well as long term side effects, then why do some doctors prescribe them? What is their incentive? Competition!!! Wouldn’t every doctor be like to be know for his/her “Magical Healing Powers“? Wouldn’t patients flock to them if they can cure illness in a matter of few days? Wouldn’t it be wonderful if he/she can cure a viral fever in 3 days instead of the normal 7 days? In that case, they will get more practice, more name and ultimately more rewards from their profession. With so many doctors with super-specialty degrees graduating from the numerous colleges all over India, it is a quick way to make a name for oneself. So the medical weapon gets used to do evil.

And we, the uninformed public, fall prey to such unethical practices which go against the Hippocratic Oath which every doctor pledges to. I am not saying that all doctors are unethical. But the number is fast growing. It pays to be informed about these practices and take necessary caution. Children are particularly vulnerable to this practice as their immune systems are just getting built up.

So, for the sake of your and your family’s health, the next time you go to a doctor for treatment, do call up a trusted doctor to get his opinion on the medicine. I for one will not recommend that doctor to anyone else.

My first Blog

On whim and fancy, i decided to get into the game... the game of Blogging... Yes, its a game after all.. all life is a game... Why? cos you are thirsting attention from others.. .and trying to contribute to the world!!!