BVIFSC WARNS THE PUBLIC ABOUT PYRAMID SCHEMES

The BVI Financial Services Commission is warning the public to beware of Pyramid Schemes and other related investment scams.

The FSC says while there are some legitimate uses of pyramid structures to sell products or other services, a pyramid structure can easily become a pyramid scheme that is used for illicit purposes and result in financial loss.

The regulatory body said that in the current environment where persons may have financial vulnerabilities due to the pandemic, it is important that the public remain vigilant to these schemes.

The FSC said these very old schemes may look like new opportunities or appear similar to cultural arrangements like ‘partner hands’ or ‘sou-sou hands’ and new versions also are promoted as not being pyramids while exhibiting the very same characteristic, for example, each person must recruit two persons, and each of these two persons must recruit two persons, et cetera.

It also said because pyramid schemes are unauthorised and make no legitimate investments and therefore no profits, a member is very unlikely to recover any monies contributed, while the fraudster at the top will collect most of the profits. Very often, those who entered the scheme later loses.

The FSC is strongly advising the public to exercise extreme caution when presented with ‘investment’ opportunities exhibiting the above characteristics. Members of the public should seek professional advice from competent persons to help evaluate potential investment opportunities, minimise risks, and avoid becoming victims of fraud.