You might have gotten an email in your inbox about a program called Postal2u or others similar to it. It claims to be the ticket to your financial freedom etc. So lets take a look this program shall we?
Basically the gist of the program is this: you get a list of names; you buy postal money orders (wang pos) to send to these people; you send the postal money orders to a company responsible for managing the list (in this case: Vital Simplex Sdn Bhd) and the company will take part of the money as its cut and then distribute the rest to those on the list. Then your name will be on a new list which you will then distribute. And the cycle continues.
This system is similar to a program called Kutu Wang Pos that was in circulation last year. In fact there are money other programs such as this. Most of these programs claim that the money you are giving away is an honest donation (derma ikhlas) and that you will be receiving donations in return when you join the program and distribute your list.
This type of program is also known as cash gifting in countries like the USA. The system is also the same, you pay to a people on a list and then you substitute your name at the bottom or at the top and then redistribute the list.
There are several issues involved here:
i) is the system legal?
ii) can people make money from it?
iii) is it really honest donation (derma ikhlas)?
The legality of the system or progam itself is questionable. If you have seen the presentation of the Postal2u Program, it claims that it is not illegal. The company is not actually illegally receiving deposits as defined in the Banking and Financial Institutions Act. It is not an MLM, and it is not an investment vehicle.
However there is a high possibility that the system is actually a pyramid or ponzi scheme. The company could be facing charges of fraud. People are “receiving donations” from new entries and the money that these people receive are actually other people’s money. Logically speaking people who entered earlier has a chance to receive large sums of money, but later entrants will lose their money when there are no more new entrants, unless those who entered earlier re-enter into the program, hence causing the money to just recycle from the top to the bottom of the so called matrix or pyramid. This may be why certain systems call themselves “Kutu” or tontines. And in Malaysia, businesses that run kutu or tontines are illegal.
So can people make money from it? Undoubtedly people do receive money from these kind of programs. But keep it mind, you receive the money from other people’s so called honest donation. And as I have mentioned earlier, when there are no new entrants, the buck stops there. Unless those who have received thousands earlier decide to re-enter into the cycle, those at the bottom will get nothing.
This takes us to the third issue: is it really an honest donation? People enter the program because they expect to get money in return. Not all of them are honestly giving cash away otherwise they would not redistribute their new list. If you are really honest in wanting to gift your cash, you do it because you want to help people out; you don’t expect others to give you money. So when those people at the bottom find that they are not getting any money, they have to ask themselves, am I in this for the money? Or am I genuinely giving the cash away to those who need it?
So think carefully : the program does not have an actual income, it is merely circulating money from one person to another. If you want to donate, then perform Zakat (if you are a Muslim) or donate to a charity. If you are looking to make money but think that pooling money this way is a good idea then there are other legal and more viable solutions than what this program offers. I’m not going to write about what these solutions are for now, but expect a write up about it soon.