The South African Reserve Bank (SARB) has confirmed it is investigating Travel Ventures International (TVI) which is reportedly one of South Africa’s biggest pyramid schemes and has netted R265 million. "The Bank can confirm that there is an ongoing investigation into TVI and numerous small schemes operating under this banner. The investigations are in various stages of progress and the Bank is not in a position to comment on the details thereof,” said Hlengani Mathebula, group head: strategy and communications at SARB.
According to The Mercury SARB has seized documents and asset of TVI, which was deemed unlawful by the bank in 2011. The pyramid scheme is estimated to have more than 100 promoters and 1 million ‘investors’ taking part at any given time according to reports.
SARB explain that pyramid con-artists lure investors in by offering them a chance to make quick money by selling something. Usually you have to pay a joining fee, buy the product and then sell it. They tell you that the more people you get to sell for you, the more money you will make. It’s easy for the first people to introduce new members, but soon everyone is part of the scheme and it gets harder to find new members to join.
For example, the con-artist recruits six people who each pay a R100 fee. Each of those people has to recruit six people. There are now up to 36 people. Now, those 36 people each have to sign up six people – this equals 216, and by the time you have to get to level 10, you have to get 60 million people to join to keep the scheme going. This can never work warns SARB.