Beware – Pyramid Schemes!
Our Readers' Opinions
September 11, 2020

Beware – Pyramid Schemes!

EDITOR: We have heard the term ‘pyramid scheme’ and quite frankly the name/term carries certain negative connotations, particularly in the height of an economic downturn where incomes have been significantly affected or impacted by Covid-19.

The Caribbean region being highly susceptible due to its heavy dependence on the tourism industry and the significant loss in disposable income through Covid-19 in or around March 2020 saw the birth and rapid growth of several money making ventures that appeared to be low risk with high return levels.

On the face of it these ventures are simple, yet effect ways to supplement household incomes, beneath it is an elaborate scheme designed to prey on the unsuspecting individual.

Before continuing the question of what a pyramid scheme is, it must be answered in its simplest form.

A pyramid scheme is one where participants are required to bring others into the scheme with the promise of financial return.

To dive a little deeper, the returns are based on moneys being put into the scheme from individuals added to the scheme.

The structure’s complexity takes three forms:

1. On the face of it, it looks like a su-su hand/a-su (depending on your origin). The difference is that in su-su’s you are not promised elaborate financial gain, but rather that it operates as a cycle savings plan.

2. The venture masquerades as ‘innocent’. It includes terms such as ‘friends and family’, ‘blooming flower’ and most importantly from the outset says it’s not a ‘scam, pyramid or ponzi scheme’.

The faces of the schemes are usually that of persons you know and trust, persons who will swear that they work, and persons who are able to irrefutably demonstrate to you that they made the promised returns; and

3. There is an appearance of legitimacy.

The schemes tend to have a specific shelf life. The shelf life usually ends when there are no more persons willing to join the scheme or where government bodies begin cracking down on the operations. The owners of the scheme (not to be confused with the face), usually then pack up when the ‘scene is getting too hot’, with the remainder of the funds and relocates to the next market.

Ultimately, you or someone you know will be negatively impacted and the money that individual used to join the scheme will be lost leaving them in an even more difficult financial situation than before.

The warnings issued by central banks and regulatory authorities are not designed to get in the way of you thriving financially. Schemes of this nature are world renowned and our local and regional experts are trying to reduce losses.

For valid investment opportunities please contact local financial representatives.

Heidi Badenock