by Bria King
What if you could turn US$500 to US$4000 in four weeks?
This is the promise being made by at least one “Family and Friends Saving Plan” programme currently being run in St Vincent and the Grenadines.
And while some Vincentians are genuinely attracted by what appears to be an opportunity to increase their wealth in what could be considered difficult financial times, many others are questioning this plan and have termed it a pyramid scheme.
Under the Family and Friends Saving Plan, an individual joins with US$500 (EC$1360) and recruits two additional persons. Using the basis of what is referred to as a “flower concept”, those two additional persons also recruit two persons each, thereby expanding the flower.
And all persons within the flower have the potential to receive US$4000 (EC$10,880) at the end of four weeks.
“When people are running their honest programme, their Christian programme, their different or similar programme, they all get parceled or shot down with the firing squad, and so that is really taking place right now in SVG by persons who have not even understood the programme,” Curtis Williams, a participant of this particular plan told SEARCHLIGHT yesterday.
He also said that based on his knowledge of the programme, it was started in Florida in December 2019 and has since made its way to the Caribbean.
Williams, who is a teacher, said he was not the person to introduce the programme to SVG but he declined to disclose who that individual was.
“When the programme came to me, it came to me through the Christian Community. I found out about the programme…at the end of June,” he said referencing the particular programme that he is a part of. “It came through not just the Christian Community, but Adventist friends.”
The educator said however, that there are several others that exist locally with smaller fees, though not linked to his Family and Friends Saving Plan.
And the Plan is a global movement with as many as 1800 registered participants to date.
According to Williams, the community offers not only financial gain but spiritual services as well, because all global participants worship every Friday night and Sunday morning together over the Internet.
The SVG Mission of Seventh-day Adventists in a release issued last week disassociated itself from the financial activity called “The Gift Sharing System” or “Blessing Loom”.
The release said the leadership of the Church is aware that there is a perception that this is an ‘Adventist-based program’ which has been approved by the SDA Church in St. Vincent and the Grenadines.
“The SVG Mission of SDA wishes to categorically disassociate itself from this financial activity, regardless of the names by which it may be known.”
“The Seventh-day Adventist Church urges persons to carefully consider how and where they invest their material resources. While we respect the right of persons to follow the dictates of their conscience in all personal matters, we do not encourage our members to join ‘pyramid schemes or any get-rich-quick ventures’. In these challenging financial times, we strongly encourage persons to prayerfully consider the workings of all financial investments and to seek sound, legal and financial guidance so as to make the wisest choices,” the release said.
Lawmakers passed the Consumer Protection Act (2020) Parliament on August 14, and Section 87(1) states that persons should not promote, operate or participate in pyramid schemes.
Under this Act, pyramid schemes are defined as a scheme that is unfair or likely to be unfair to many of the participants in that “the financial rewards of many of the participants are dependent on the recruitment of additional participants and not on investments” and “the number of additional participants that must be recruited to produce reasonable rewards to participants is either not attainable, or is not likely to be attained, by many of the participants”.
Williams told SEARCHLIGHT that the Savings Plan had one similarity to a pyramid scheme in that they both utilize a recruiting process. However, he said that there are several differences that demonstrate that the Plan is not a pyramid scheme.
“It’s a gift. It’s something to be given away, it’s not an investment, it’s not a start up money. It’s very important for this person to know that I’m losing this money to gain.
He explained that the flower concept only utilizes a maximum of 14 people and with each person recruiting two. The flower starts with one person’s “gift” of US$500 and the US$4000 essentially originates from the gifts of the last eight recruits of the flower.
“Some people don’t make that entire 14 in the four weeks. You could go through the four weeks and never get to those eight. Which means that you don’t have anything to collect. You can go through the four weeks and have any number from those eight. Like if you get one of the eight, you get back the $500 you put in and if you get three, you get $1500, if you get 4, you get $2000 and so on,” Williams said.
If an individual does not recruit anyone, they will not be “re-gifted” their initial US$500 and must make a further payment of the same amount if they wish to try again.
He noted that while there are several possible payout outcomes, there is a specified amount of money that everyone is paid out, so no one is getting rich off of anyone else; something he says is a distinct difference from a pyramid scheme.
According to Williams, between 60 and 70 persons from his specific Plan have received payouts of varying amounts to date.
He also told SEARCHLIGHT that once persons receive their gifts at the end of the four-week period, they may either choose to leave or stay and complete the cycle again for an additional US$4000.
He said however, that no further recruitment takes place at this time, as persons would have already invited persons in the first cycle. This he said is another difference between the Savings Plan and a pyramid scheme.
“What is it that don’t need people? Look around. What is it that doesn’t need an invitation?” Williams questioned. He also made reference to what is known in the Caribbean context as the “Susu hand”, which also invites persons to be a part of it.
He said the Susu hand is not seen as a pyramid scheme. Some have also referred to the Savings Plan as an updated version of a Susu.
The Eastern Caribbean Securities Regulatory Council (ECSRC), the body that administers the securities legislation governing business in the Eastern Caribbean Currency Union (ECCU), issued a release on August 25 to warn the public within the region of COVID-19 related scams.
The scams listed in the release include pyramid schemes, unauthorized Foreign Exchange (Forex) Trading, work-from-home scams and personal finance scams.
The ECSRC’s release urged persons to protect themselves by being wary of persons who urge to invest quickly or promise high returns on investments, seeking financial advice or guidance before investing and ensuring that any individual or firm conducting business is licensed or authorized by the ECSRC or other relevant government authority.