FIVE QUESTIONS ABOUT PYRAMID SCHEMES
What’s the company’s history and accreditation? Investment businesses must be registered with the Financial Services Board (FSB). Don’t believe all the framed degrees and diplomas on the wall – check each company and adviser’s accreditation on the FSB website.
What’s the contact information? Beware companies that don’t have a physical address or official website but instead use Gmail, Hotmail or Yahoo e-mail addresses.
Do I understand the business model? Beware complicated commission structures, and remember that returns on legal investments don’t depend on the recruitment of new investors.
How do they differ from a stokvel? Stokvels are saving clubs and not fraudulent schemes. The members of a stokvel all know one another and save money together every month. It doesn’t depend on the recruitment of new members.
How do they contact me? Acquaintances might try to recruit you by e-mail, or you might see an advert on a site such as Gumtree. The ads usually appear to be legitimate.