Pyramid Schemes on the rise in Pacific Islands community
The Pacific community is being warned to be aware of people promoting get-rich-quick schemes which are basically illegal pyramid schemes. The warning comes from community leaders and the Commerce Commission as stories emerge of Pacific people already losing money in these schemes. Soana Aholelei reports.
“If it seems too good to be true, it probably is.”
That’s the message from the Commerce Commission about so-called pyramid schemes, and many in our community here are falling victim to the promise of quick cash.
Associate Commissioner Joseph Liava’a told Tagata Pasifika, “We’ve had more complaints, and actually the closer we look at the problem, the more evidence of pyramid schemes we’re discovering, so yeah, you could say it’s on the rise.”
In a pyramid scheme, a promoter gets people to put money into a fund and then urges them to recruit two more people who do the same. There is a promise of a big payday if lots of people join, except, it always collapses.
“Only a few people at the top may make money, but the rest of the people will lose their money, and that’s what we’ve found,” Liava’a says.
Two such schemes have been operating in South Auckland for some months, and Tongan community leader Salote Lilo is extremely worried.
“I’m concerned because I can see straight away the consequences. These people go out without food, these people go out without a week or two weeks wage just to get easy money with that; I can see there is a problem after that.“
One victim of the scam told Tagata Pasifika that they were approached by a friend during Christmas time.
“She (the scammer) said when you get those two people and they pay 200 each, that’s when I get paid; after the 21 days you get $1600, but it never comes around.”
Another victim paid $780 for the promise of much more.
“When I sleep at night, I can’t keep my feet still, my mind can’t rest because I am thinking as it’s confirmed now, I won’t get 6000 or 500,000. I hope they just return my 780 because that was not easy to earn that $780. I worked hard for it.”
Both victims were approached by close family and friends to join the schemes, which is typically how people are recruited.
“If the scheme is being pushed and promoted by someone you know and trust, don’t just trust; check it out, do some basic internet searches, talk to someone. While the names will change over time, the way they operate always remains the same,” Liava’a says.
In 2020 the Commerce Commission ran a campaign in the Pacific community warning of the rise of these scams during Covid-19, as money pressures made people desperate.
Salote Lilo agrees. “Since Covid-19 last year I’ve noticed that this has been going around because some people have been laid off work; no jobs are looking for fast money.”
Many victims are afraid to report these schemes for fear of repercussions.
“It is for fear. Also, some of them are here unlawfully, some of them fear for their family, some of them, they don’t want to be identified, because they are best friends and they don’t want to ruin the friendship.”
Pyramid Schemes are illegal in New Zealand, Australia, USA and the UK to name a few, and need to be reported.
“You can always contact the Commerce commission, but also the Police are one of our big partners in this area, the FMA, the Financial Markets Authority, and don’t get involved and don’t involve anyone else,” Liava’a says.
Additional video credit: Canadian Competition Bureau and TedEd
For more information go to the following websites:
Commerce Commission – Scams (comcom.govt.nz)
Commerce Commission – Pyramid schemes (comcom.govt.nz)
New Zealand Police | Nga Pirihimana O Aotearoa
Financial Markets Authority New Zealand | FMAP