WILLEMSTAD – Fundashon pa Konsumidó warns consumers about investments and business structures in which participants primarily earn money by recruiting new members. The foundation says it has recently been regularly approached with questions about such so-called pyramid schemes.
According to the consumer organization, in a pyramid scheme, the money does not primarily come from the sale of a real product or a legitimate service. New participants must first deposit money, after which part of that deposit is used to pay earlier participants. The system can only continue to exist as long as new people keep joining.
Because it constantly requires an ever-growing group of participants, a pyramid scheme eventually collapses. Most participants lose their money in the process, warns Fundashon pa Konsumidó.
The structures are often presented as attractive investment opportunities that allow for the earning of significant amounts of money in a short time and with little effort. According to the foundation, consumers should be particularly cautious when the emphasis lies primarily on recruiting new members and it is barely explained where the actual income comes from.
Other warning signs include a mandatory initial investment, promises of quick financial independence, and pressure to decide immediately. Lack of clarity regarding how participants are paid can also indicate that a pyramid scheme is involved.
People who suspect that a pyramid scheme is active in Curaçao or Sint Maarten are urged to report this to the Central Bank of Curaçao and Sint Maarten.
Participants are advised not to contribute any new funds or to recruit other people. They must also retain contracts, proof of payment, invoices, and communication with the organization, and, if possible, formally terminate their participation.
