Warning over scams

At the peak of the Covid-19 crisis, which has left many jobless, the lure of making quick bucks has resulted in a large number of people vulnerable to  pyramid schemes.

Complaints have started pouring in with investors complaining about not having received their payouts from an alleged pyramid scheme called Golden Way. Golden Way has a closed Facebook page, WhatsApp groups and website where other members are telling people how they could make easy money during these tough times.

There are no contact numbers or address to the company’s head office on the website or Facebook page.

Attempts to get comment from two of their prominent local recruiters were unsuccessful as they refused to comment on the matter after learning that they were speaking to a journalist.

Before refusing to comment further, one of the recruiters, from Cato Ridge, who believed the reporter was a potential recruit, said the money-making system was not a pyramid scheme, but a “stokvel”.

“You join in with a once-off joining fee of R300, which is paid directly to the person who recruits you.

“In order to move up to level two, you need to recruit two people who will pay you a joining fee of R300 each. You then use that R600 to pay your recruiter so that you are upgraded to level two.

“In order for your recruits to upgrade to level two, they need to pay you R600 each, which they also receive from their recruits, bringing your total to R1200.

“You use that money to upgrade to level three and the sequence continues like that,” she said.

She said once you’ve received the final payment of R12 900, you cycle-out and have a choice to re-join and repeat the process again.

She added that some members have made more than R70 000 in less than a month. “It really depends on your recruitment skills. We have WhatsApp and Facebook groups where we network with people from all over the country and help each other with finding new recruits,” she said.

An irate member of the scheme, who asked not to be named in fear of victimisation, said she was recruited by a Facebook friend and after paying the R300 joining fee last month, she has not received any feedback about moving to level two. Now she wants her R300 back.

“I was told that this was a push-push system but now the person who recruited me is telling me that it’s still full and I should wait. When I ask for my R300 back she refused, and I don’t even personally know her. It’s frustrating now because it seems like I just gave a stranger R300 for nothing,” she said.

The woman said she saw no reason to open a police case as she sent the money to the stranger willingly.

Another woman told Weekend Witness that she was also approached on Facebook and was told to join the scheme.

“I’ve thought about it and decided that I won’t be playing this thing. I played that WhatsApp stokvel last year and lost my R200. Never again,” she said.

The South African Banking Risk Information Centre (Sabric) has warned the public against falling victim to Ponzi and pyramid schemes.

Explaining how both Ponzi and pyramid schemes work, in a statement Sabric said the schemes, which are both illegal, see returns generated for earlier investors through revenue paid by new investors, rather than from legitimate investments or business activities.

“At the point where there are more existing investors than new investors, the scheme collapses and all monies invested are lost. People who were expecting to make a good return on their investment not only get nothing, but also stand to lose most, if not all the money they initially invested.”

Sabric advised investors to be careful of investments that guarantee you high profits with little or no financial risk, to exercise due diligence in selecting investments and the people with whom you invest, and urged people to do their homework before investing their money.

“Consult an unbiased third party, like an unconnected broker or licensed financial advisor before investing.”


• Promises to deliver an unreasonable return on investment.

• Promises overnight profits or income based on your ability to recruit.

• Relies on recruitment without meetings with real members.

• Sells no tangible products but makes conditional promises.

• It has no physical address or landline. Only WhatsApp is used in recent times.

• It has no financial services provider license.

• Applies pressure techniques.

• Doesn’t give refunds.

— Sabric.

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