FCCC warns against Pyramid Schemes

August 27, 2023 12:20 pm

The Fijian Competition and Consumer Commission is once again urging Fijians to remain cautious and avoid falling prey to pyramid schemes.

Emphasizing the detrimental impact of pyramid schemes, the Commission emphasizes their harmful consequences on individuals and the economy’s stability.

In a recent post on the Commission’s official Facebook page, the mechanics of a pyramid scheme are explained.

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As new participants join, an ever-increasing number of recruits becomes necessary to sustain the scheme. For instance, if one individual enlists two others, these two must each bring in an additional two participants, creating an unsustainable growth pattern.

The Commission further outlines that due to the scheme’s dependency on constant recruitment, a vast majority of participants find themselves trapped at the lower levels.

Since profits are derived from new recruits rather than actual earnings, those positioned at the base seldom receive the promised returns and often face the loss of their initial investments.

The Commission also draws attention to the fact that many pyramid schemes encourage participants to rope in friends and family members.

Unfortunately, when the scheme inevitably collapses, personal relationships can be strained or severed as individuals feel deceived and betrayed.

Unlike legitimate businesses that contribute to the economy through the sale of products or services, pyramid schemes solely generate revenue through recruitment.

This lack of tangible value, the Commission adds further highlights their damaging nature.

The Commission states that pyramid schemes operate on deceit, possess an unsustainable structure, and result in a considerable number of participants facing financial losses.