I was invited to an investment that pays me for recruiting others. Is it legal?
No. A scheme where your earnings come mainly from recruiting new members rather than from selling a real product or earning real returns is a pyramid scheme, which is prohibited under the Consumer Protection Act. The people at the bottom always lose.
The invitation comes from a friend or relative who has been paid once and is convinced. Products, if any, are an excuse. Ask yourself: if nobody recruited anyone else, would anyone still earn? If not, it is a pyramid.
Signs of a pyramid scheme
- A joining fee or a "starter package" you must buy.
- Your income depends on how many people you bring in.
- Pressure to join now, before "the opportunity closes".
- No real product, or a product nobody would buy at that price.
- The company is not on the FSCA register, or is on its warning list.
Frequently asked questions
- Can I at least get my joining fee back?
- Rarely. Report it to the National Consumer Commission and keep the evidence.
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