Central Bank/SEC/ FIU warn of pyramid schemes

The Central Bank, the Securities and Exchange Commission and the Financial Intelligence Unit are pleading with the public to be cautious about investing in pyramid schemes, as it poses a serious risk and can result in loss of money.

In a joint advisory, sent to the media on Thursday, the entities said the schemes are being heavily marketed to the public through group chats and in person. It warned that the pyramid schemes "may take many forms and are often falsely presented as new investment including different types of securities, foreign currency and even traditional 'sou-sou' arrangements."

The release outlines several ways a pyramid scheme can be identified. These include: "They require persons to join groups and make initial contribution of money with the promise of a significant pay-out or 'return.'

"They rely on recruitment of new members in order to ensure high payouts.

"And early contributors to the scheme are paid from the money contributed by new members and existing members are asked to recruit."

The scheme will collapse when fewer or no new members join, the release said. And if it collapses, it disappears along with the money invested. "Schemes outside of regulated financial facilities, such as pyramid schemes, promising exorbitant cash pay-outs pose a serious risk to those participating including loss of their hard-earned money."

It's also impossible to find where the money originated from, which may be from illicit sources, the release said.

The public is asked to be vigilant and report fraudulent activities to the Fraud Squad at 625-2310, 623-2644 or at 652-8594.