The pyramid scheme makes rounds in New Zealand
In South Auckland, there is a pyramid scheme aimed at the inhabitants of the Pacific islands. Several people, who are also Tongans, have promoted schemes that have spread people in the $ 300 to $ 1,500 range.
A scheme is some kind of gift program where each person sends a gift to those who are higher in the chain.
Participants have been promised large sums of money that they can make in the scheme, but this depends on whether they recruit more into the scheme and persuade them to invest in it. Then they have to do the same to make money, etc.
Somewhere along the chain, the trail of money stops because fewer people get involved, while others fall away. For the scheme to work, it relies on a large number to be connected. In the end, the only one who makes money on all this is the originator of the scheme.
Some people who took part in one scheme went out to create their own and persuaded others to join them and said, “Come to mine, this is much better.”
“If something is too good to be true, it most likely is.”
So what are the features of a pyramid scheme?
There are a few keywords to look out for, the main ones being recruitment, network marketing, upline, downline, donation program.
The only question that scheme promoters should ask is, “What products
Any marketing scheme that requires its members to hire other people to make money without selling any products is almost certainly a pyramid scheme that is illegal in New Zealand and other countries.
Legitimate companies like Amway, Melaleuca, Herbalife, Kleeneze (UK) all sell products as well as a number of other companies that involve recruiting others, but even so, the tactics of these companies can be explicitly harassing people who don’t fit in. the type of sale will be persuaded to join the scheme without any hope of ever making any money. There are several pyramid schemes that masquerade as network marketing companies, so you have to be on the ball.
What can people do to protect themselves?
The most obvious thing is to use financial advice and it does not have to cost an arm and a leg. Get free legal advice from a Citizens Advice Bureau. You can also go to your bank for advice. Of course, people who promote these schemes don’t want you to do it, but they want your money and they don’t want you to reveal their scheme.
It is those who can afford it the least who are interested in these schemes; the idea of a financially free life with little or no effort. The promoters of these schemes sell the dream; who says, “Dreams are free?”
At the heart of it all is that these schemes are illegal in most countries, so if you are a participant, you could get into trouble.