Look out for pyramid schemes! This is a warning.

Eastern Caribbean Securities Regulatory Commission (ECSRC) has joined authorities in St. Vincent in advising the public in Saint Vincent and region of investment offerings, that are being circulated via online chat platforms (WhatsApp), virtual meetings (Zoom) and face-to-face contact.

These investment offerings which may be classified as pyramid schemes, are currently being promoted under the guise of a “savings plan”, “sou-sou” or a “gifting” system.

The following are some of the red flags of a pyramid scheme:

  1. Emphasis on recruiting new participants to join the programme; The programme requires individuals to make a financial contribution to start and requires recruitment of new members making the same contribution to ensure high payouts.
  2. There is a promise of a high return or payout on the initial contribution over a short period of time; this high return is only possible through the recruitment of new participants.
  3. No genuine product or service is offered

The Government of Saint Vincent and the Grenadines has moved to protect the public from pyramid schemes by passing the Consumer Protection Act 2020 which prohibits the promotion, operation or participation in pyramid schemes and will carry a penalty on summary conviction, of a fine of ten thousand dollars and imprisonment for two years for the offence.