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Christmas-themed pyramid schemes are on the rise, and a small loan trust is warning people to avoid them.
Photo: 123rf.com
Natalie Vincent from Ngā Tāngata Microfinance said that many pyramid schemes use cryptocurrencies and are mainly promoted among Maori and Pasifika families.
Vincent said a new pyramid scheme is being sold to vulnerable people in the form of ‘gifts’ or ‘koha’ with the promise of making a quick buck.
It suggests that people can get up to $ 20,000 after making three payments of $ 150.
Vincent said that some people might make money in the early stages, but later, as is the nature of such schemes, it will collapse, leaving no money for anyone.
“The really scary thing is that several people who have come forward to us have borrowed money to put into these plans.”
He said that any investment plan that derives its income from hiring new members is considered by law a pyramid scheme and is illegal.
Vincent said that using cryptocurrencies instead of cash allows would-be scammers to operate in the shadows, regardless of banks.
