Ministry issues pyramid scheme warning
The Ministry of Commerce, Industry and Labour (M.C.I.L.) has joined Central Bank of Samoa warnings against pyramid selling schemes currently operating in Samoa.
According to a statement issued by the Ministry many schemes relate to the "re-gifting" of money and rely upon the recruitment of new participants to generate financial rewards.
“Pyramid selling and similar schemes are illegal ‘get rich quick’ scams that can end up costing your friends and family their hard-earned tala,” the Ministry said in a statement.
The Ministry warned particularly against schemes that promise financial returns to participants who bring in more members to the scheme.
These schemes rely on new participants paying higher upfront membership fees in order to fund profits and participants are typically promised high financial returns very quickly.
Pyramid selling and similar schemes are prohibited in Samoa under section 65 of the Competition and Consumer Act (C.C.A.) 2016 administered by the M.C.I.L.
The Ministry stated that it is important to be careful with the types of offers made by such schemes because often they are too good to be true.
Reports of a number of pyramid schemes circulating have also been received by the Central Bank of Samoa (C.B.S.).
The C.B.S. last week issued a public statement cautioning members of the public about the schemes.