Cowart's Common Room
Pyramid schemes

I'm pretty concerned as, within the last 24 hours about five (normally sane) people have stopped me and tried to get me to 'invest' three thousand pounds in a scheme that 'is NOT a pyramid scheme but a 'ladder' scheme.'
Ho hum. Sounds familiar to me.
Apparently the idea is that you hand over three grand in cash (!) and, at some point in the future, get given 25K back. It is sugared by being for women only and apparently some money goes to charity.
Anyone else had experience of this in their villages? Presumably you're fine if you get in at the top of the tree but the number of willing punters has to dry up surely and then the last in end up with nowt. Or am I missing something and being a misery guts?

Posted at 6th Nov 2008 - 11:47AM   Posted by Exmoorjane   Pyramid schemes Comments: 21

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Westerwitch's Avatar Eeeek sounds ghastly . . . avoid like the plague I would have said - not matter how good it sounds.

Posted by: Westerwitch on 6th Nov 2008 at 11:56AM

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Toady's Avatar I've heard of this and it is a pyramid scheme in a different guise. I'm sure if you check out any of the 'consumer ' sites, Watchdog, Radio 4 Moneybox you'll find it or something similar. If it sounds too good to be true it probably is.

Posted by: Toady on 6th Nov 2008 at 12:00PM

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Exmoorjane's Avatar My thoughts exactly. I'm worried that people who really can't afford this are getting the money out on their credit cards. You'd think it would be illegal, wouldn't you? - can't see anyone paying tax on it.

Posted by: Exmoorjane on 6th Nov 2008 at 12:15PM

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Woozle1967's Avatar Get rich quick schemes Evil or Very Mad There are many people feeling the squeeze financially at the moment and they are very vulnerable to things like this. Makes me mad. As you say, "sweetened" by the involvement of women and charity!! Avoid like the plague.

Posted by: Woozle1967 on 6th Nov 2008 at 12:26PM

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Pipany's Avatar Yes, I remeber this from before too Jane, though I remember it being called pyramid selling too. I knew an amazing number of intelligent people sucked in by it.

Posted by: Pipany on 6th Nov 2008 at 12:28PM

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Faith's Avatar When my daughter was working as a model and was about, say, 22 - so about 7 years ago now, there was a thing like this and it was called I believe 'Women Empowering Women' and you 'bought' into it by buying hearts. Very clever marketing. She was told about it by another model, who said 'Dont tell your parents, they won't approve'. Anyway, she did discuss it with me and I said Darling you might as well just go and get your cash and put it down the nearest drain as do that! Luckily she didnt get involved and the so called model friend never got in touch with her again! They had big meeting where the person who had got to the top of the pyramid was given bagfuls of cash amid much clapping and squealing thus tempting those at the bottom to hand over their cash in the hope that 'their day would come'. If it sounds too good to be true, it probably is.

There was another thing, years ago, in our area called 'the ring of gold' - money was sent through the post, you put your name and the bottom of the list and sent off to the person at the top. If you were foolish that is!

Posted by: Faith on 6th Nov 2008 at 12:37PM

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Arosebyanyothername's Avatar I copied the following from an article by WHICH? the Consumer magazine.
Why you should avoid pyramid schemes

This is how they work: You will be asked to make an investment to join a scheme. You then have to recruit other people. These people then make further investments into the scheme and you are told that you will be paid out of their investments.

Unfortunately, these scams are doomed to fail and are now illegal.
Only those at the top make money. There isn't an infinite number of people who are willing to join, and when no one else can be persuaded, the pyramid collapses and the remaining participants lose all the money they invested.

The younger brother of pyramid schemes is matrix schemes.

They tend to operate via websites and work by asking you to buy something of little value, such as a ringtone, in exchange for something worth a lot more money, such as an iPod.

Posted by: Arosebyanyothername on 6th Nov 2008 at 01:31PM

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Exmoorjane's Avatar Ah I thought they were surely illegal. This one claims NOT to be a pyramid scheme but I can't see much difference. I read that somewhere (was it the Isle of Man?) one of these things caused real discord in the community.

Posted by: Exmoorjane on 6th Nov 2008 at 01:36PM

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Pondside's Avatar There was something like this over here a few years ago - for women only and called The Dinner Club. It was a pyramid and in its early days there was even a faintly fawning article in the local paper. One of my friends became involved and in the end she and others narrowly missed being charged by the police. Keep away from it, Jane!

Posted by: Pondside on 6th Nov 2008 at 02:27PM

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Toady's Avatar Now the bank rate's gone down I've decided with the chap in the PO that the best thing to do is to sew my meagre savings into the mattress or put it into more premium bonds. Win or lose you can get your money back.

Posted by: Toady on 6th Nov 2008 at 02:43PM

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Frances's Avatar These schemes do seem to come around when times get a bit hard. I remember one during the mid-1970's that made some entryway amongst secretaries working at the law firm that employed me. It was shocking to see how easily folks fell for it. I warned lots of people to stay away, and often only made them angry with me.

Jane, wonder if the police in your area are aware of this group....

xo

Posted by: Frances on 6th Nov 2008 at 03:16PM

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Exmoorjane's Avatar Yup, I think people DO get angry if you challenge them on it. I found it quite spooky as they were like pod people......

Police? In a rural town? Ah, sadly not. They are all waiting to catch speeding drivers.....

Posted by: Exmoorjane on 6th Nov 2008 at 03:22PM

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Milla's Avatar I can't see who falls for them - if the money is circulating around, unless it's circular, someone is going to lose out. crazy even to think it might work. And if it did work, for you, it would be on the back of accruing endless 3Ks froms some other poor saps.

Posted by: Milla on 6th Nov 2008 at 03:42PM

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There was a thing called hearts went around here a few years ago, but it was 100. To be fair, those who were running it always said 'If you can't afford to lose the money don't do it.' And yes, those in at the beginning made money, but later participants lost out. It didn't last long as far as I remember.

Posted by: @themill on 6th Nov 2008 at 03:42PM

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Faith's Avatar It was the Isle of Wight Jane and I think women were even pawning things like the toaster to get enough money to join.

Posted by: Faith on 6th Nov 2008 at 05:12PM

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Exmoorjane's Avatar Ah that's it - knew it was an island. A woman here did get the 25K and so that's why people are rushing to join. But apparently it has already run its course in a nearby village - and the organisers are saying they will 'sort it out'.....but can't see it.

Posted by: Exmoorjane on 6th Nov 2008 at 05:16PM

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Exmoorjane's Avatar And, as you say, Milla - it's the ethics of it - OK, so you might luck out but sure as eggs is eggs someone will be left without.

Posted by: Exmoorjane on 6th Nov 2008 at 05:17PM

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LittleBrownDog's Avatar Yes indeed - Sounds well dodgy to me.

It's amazing that apparently sane people seem to get sucked into these scams. That nice Gordon Brown, for example, promising all we all had to do was just borrow a bit more and everything would be all fine and dandy. Boom and bust? No siree. Mind you, Jane - perhaps you might consider swapping Asbo for these five magic beans I happen to have in my pocket... Cool

Posted by: LittleBrownDog on 6th Nov 2008 at 07:28PM

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Exmoorjane's Avatar Packaging him up as I type, LBD......

Posted by: Exmoorjane on 6th Nov 2008 at 07:47PM

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LittleBrownDog's Avatar ...and don't forget to pop in his Tarot cards, Jane. Wink

Posted by: LittleBrownDog on 6th Nov 2008 at 09:04PM

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Exmoorjane's Avatar In his suitcase.......Cool

Posted by: Exmoorjane on 6th Nov 2008 at 10:14PM

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