Comesa warns against rising pyramid schemes

08 Sep, 2020 - 08:09 0 Views
Comesa warns against rising pyramid schemes

The Chronicle

Oliver Kazunga, Senior Business Reporter

THE Common Market for Eastern and Southern Africa has warned consumers in the trading bloc to be warry of the pyramid schemes that are defrauding people of their hard-earned money.

A pyramid scheme is a fraudulent investment plan that has cost a lot of people worldwide their hard-earned savings. In a statement, the Comesa Competition Commission (CCC) said its attention had been drawn to the activities of a scheme known as ‘Crowd1’, which markets itself as a digital multi-level firm and whose operations are being investigated in some jurisdictions.

“The Comesa Competition Commission (CCC) advises consumers in the region to be on the lookout for pyramid schemes whereby people are encouraged to join and recruit others at a fee to make money,” said the bloc.

“Consumers are, therefore, advised to exercise caution when dealing with Crowd1 and also conduct research about companies they wish to invest in to avoid losing their hard-earned money.

The CCC said specifically, the commission has noted that authorities in the Philippines and Namibia found that Crowd1 members made money by recruiting others and the organisation has since been banned in Namibia. In Philippines, authorities are said to have issued a cease and desist order to Crowd1 for operating without a license.

Furthermore, Comesa said authorities in Mauritius and New Zealand have issued investor alerts, advising the public to exercise caution in their dealings with Crowds.

The commission has observed that some pyramid schemes pose as multi-level marketers that pretend to be selling products.

However, at close glance there are no sustainable earnings from the sale of the products and members are often advised to recruit others to make money. The money pyramids craze once hit Zimbabwe in the 1990s and resulted in people filing police reports after being defrauded. Recently, during the dollarisation era, hundreds of prospective money makers were swindled out of millions of dollars by dozens of bogus money savings clubs.

– @okazunga

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