The Economic Offences Wing of the Erode police has cautioned the public against falling prey to devious investment schemes of private finance companies.

An EOW official said though there was no complaint from customers so far in the district, the department was monitoring the product offerings by finance companies.

As per the instructions that the Additional Director General of Police- EOW, Prateep V. Philip has conveyed through the district units, the public must be wary of the schemes offered by Non-Banking Financing Companies, especially unincorporated bodies, newly incorporatedbodies, and those that are not registered with Securities and Exchange Board of India.

The devious offerings encompass fixed deposit schemes, benefit fund, teak tree plantation scheme, car schemes, chit fund scheme, gold coin scheme, online trading, SMS scheme, emu farm scheme, country chicken scheme, goat rearing scheme, copra scheme, multi-level marketing scheme, milk booth scheme, society scheme, and trust scheme, land scheme, and ‘Nigerian’ cheating. According to the set of ‘don’ts’ advocated by the EOW, the public ought not to be carried away by higher rate of interests offered by the companies.

Investors need to know that the Reserve Bank of India has not guaranteed for repayment of deposits even in the cases of companies for which Certificate of Registration is given by the Registrar of Companies and the RBI.

The public must desist from investing in long-term schemes and deposits since they would not be in a position to know how the company would perform in future. Rather than renewing the deposit automatically on the maturity date, the investor has to get back the maturity proceeds and reinvest after going through the financial position of the company.

The RBI has stipulated that NBFCs cannot offer more than 14 per cent interest on deposits, according to an EOW source.

The Tamil Nadu Protection of Interests of Depositors (In FinancialEstablishments) Act – 1997, pioneered by the State, provides foraction against financial institutions failing to return the deposit / interest, arrest of the accused, speedy trial of the cases through the Special Court for TNPID, and distribution of money to the depositors.

Till May 2013, since the start of the calendar year, the EOW has ensured refund Rs. 10.57 crore to 1,677 depositors. Last year, Rs. 46.96 crore was refunded, according to official statistics.