I recently came across an advertisement in an Indian business newspaper that mentioned about investing in Dubai, they had a website called DubaiProfits.com, intrigued by it, I gave them a call and then came a series of questions. The questions seemed to make you feel that this is an exclusive investment, but it is nowhere close to it.
One thing that I noticed is that the group calls itself British, they have several British men working at their call centre. One of them named Mohammed happened to speak to me, never did even once was he genuinely concerned about investor queries. He uses high pressure sales tactics, such as the ones used by Jordan Belfort in the movie, The Wolf of Wall Street. Many of these techniques are illegal in most parts of the world, since they are persuading you to sign up for a so-called investment proposal that you don’t really need or costs significantly lesser.
The First group claims that they are British property developer in UAE, being fully aware that they violate the Consumer Protection from Unfair Trading Regulations 2008, that outlaws high pressure sales tactics.
Mohammed kept insisting on speaking to the decision maker, having little knowledge of how family owned businesses are run in India. When I did visit them at Taj Lands End, I was taken through some glossy brochures, some really good quality videos made by a production company.
They than offered some “subsidised” travel package to come and evaluate their investments, provided I decide on the same day to go ahead. For those that commit to going ahead with The First Group, they are offered a 10% discount, so as to create urgency. However, if you think rationally for a moment, if a discount is offered, how high the margins would be. If you check with some local Dubai brokers, they will mention that if you did purchase a mortgaged home and rented it out, it can easily yield about 25% per annum.
This so called travel package was a special offer that only lasts for one day, once in Dubai, they take you through a long sales presentation, where you are put under pressure to sign a contract before leaving.
The will use every such technique to show that they are qualifying an investor, whereas they are always finding ways to disqualify people and then find ways of asking for upfront money. Mohammed kept chasing and following up, he called from a phone that was not a registered number, hence you do not know where the call is originating from and what the real objective is.
Although this is merely a financial investment, Mohammed said that the age is a major concern and hence he cant offer the package and he said that, “we have a situation here”, he asked for USD 10,000 upfront as a fully-refundable reservation fee before I make the trip, this is outrageous and a major red flag about not proceeding ahead.
They asked for USD 350,000 for a studio in the Tecom area and said that they would generate returns of 8 to 10% depending on how the investment fares. If you go ahead and look for properties in that belt, the property is overpriced by atleast 150% or 2.5X its current market value.
Mohammed insisted on not sharing any agreement, calculations and so on, simply saying that these will be shared in person.
Exit Policy: When enquired about the exit policy, I realised that there is none and you simply have to sell off your property to someone else. Do you think a hotel apartment is an easily sellable asset, think again. I reached out to one of my brokers in Dubai and he mentioned that there are several such assets, that are being traded at a massive discount and should you wish to exit, plan for atleast a couple of years.
The First Group should essentially be outlawed as they encourage flight of illicit capital from emerging markets. They have several global offices in countries such as Nigeria, Luanda, Russia, Kazakhstan, Tajikistan and so on.
They also run several sleep, beautiful websites that make them appear as legitimate investment management company such as www.TheFirstGroupInvestor.com TheFirstGroup.com, DubaiProfits.com
We will reach out to Dubai Economic Department and let them know about this.