Pyramid schemes are back.

**Dave A** · 27-Jun-07, 09:21 AM

Pyramid schemes, which are illegal in South Africa, are returning in a more sophisticated form, according to banking registrar Errol Kruger.

He said yesterday that the Reserve Bank's department of banking supervision had investigated about 40 unregistered businesses or investment schemes.

In the 1990s and early 2000s, pyramid schemes operated as simple money chains, in which new members sent money to the person who enrolled them and went on to enrol more members.

Unlike pyramid marketing schemes, money pyramids offer no product or service, and returns depend entirely on expanding the chain.

As the schemes proliferated, the market shrank and latecomers were unable to recoup their investment, let alone make a profit. Then, for a while, the schemes faded from the scene.

Kruger said the schemes, which may have had up to 1 000 members, were now more complex.

The department's annual report for last year says: "They offer exorbitant returns on investment, luring depositors on a large scale. In recent cases, it has been found that the managers often fraudulently justify the exorbitant returns by stating that funds taken from the public will be invested in lucrative property developments."

To begin with, the schemes go undetected because members believe they will benefit. But when a scheme runs its course, those at the losing end turn to the authorities. Once the schemes have been identified, the Reserve Bank moves to close them. "It takes two to three months to investigate, but we believe we are closing them as fast as they come in," said Kruger.
full story from Business Report here

**RKS Computer Solutions** · 29-Jun-07, 11:51 AM

The sad part of this all is the fact that some people still fall for it, no matter how many times it has been noted in various media outlets....

**Eugene** · 29-Jun-07, 01:15 PM

Nowadays with the costant rise in petrol prices, the high cost of credit and living expenses, I can fully appreciate it if people are desperate in making a quick buck! Unfortunately those that are in dire financial straits are the most gullable to fall for these schemes and in most instances loose all the money invested in such scheme. There are also those ignorant people that believe that the sonner you join, the more you will benefit from the sceme (can anyone still remember the vrot milk scheme called Kubus?)

**cho767** · 02-Dec-10, 11:04 PM

As a recent graduate, looking for a job proved to be challenging but also a learning curve every step of the way.

I was recently recruited by RRR-Link (SA) Ltd which sell an sms service to companies. It is a division of Mouldmed which is run mainly by a guy named Gert Theron snr...who was in that Kubus case. But before I knew about the history of the Theron family, this opportunity was seemed all too exciting until they started to train and explain what our roles were in the company regardless of our qualification.

To cut a story short, the main roles of the employees were mainly to recruit people, and those that were recruited were trained to recruit more people. Each recruiter would then get a cut for every deal they make as well as on every deal the recruited people make. And more money is earned if the recruited people climb up the ladder to a senior position. SO downlines are created. Very much like a pyramid scheme.

Luckily for me, I am well supported by good people who let me know about Mouldmed and the history of the Theron family and was able to get out before the training ended.

This company is supported by the government and major companies in SA, yet their system is nearly identical to a pyramid scheme which is illegal. They target mainly people with a low education level (min qualification level is a grade 10) and desperate for a job and 'promise' them great career opportunities and a chance to financial independence.

My question is where is the line between legal and illegal. I have read up on some fraud cases but all this seems illegal to me. This system that RRR is playing out has all the factors of a pyramid scheme, so why cant the government or the public see it? And what can be done about it?

**Dave A** · 03-Dec-10, 07:26 AM

How viable (read "profitable") is the selling of the sms service?

**cho767** · 04-Dec-10, 12:12 PM

What they told us on the second day was that the sms service constitutes about 10% for their profits. RRR also sell non-conventional advertising space inside their offices. The suggested high demand is due to the continuous influx of job seekers and even some business owners attending the training sessions. They call it a captive audience.

Furthermore, Im not sure how this one would be profitable for RRR, but we were told to build our own customer database consisting of names, cell numbers and locations of people. The suggested way of getting hold of this information was to look in the classified section in newpapers...So when the right time come, one could rent these lists to businesses.

They did not go on further on other ways to make a profit.

I will admit that I stupidly paid R700 to take part in this training. This fee was said to be for a businesskit (R350) that we would recieve when we sign the contract and for a registration fee with the sms service provider (R350)...However, as i understand now...The sponsor who recuited me pocketed R200. Thus changing the whole meaning of this.

As soon as an individual sign the contract he/she becomes a junior sale executive (JSE). At this point he/she is only allowed to recruit people and he/she gets R100 for every deal you make. The minimum requirement to become a senior sales executive (SSE) is to enlist a minimum of 10 people (RRR encourages the individual to recruit more so that they can cover the fee suggest next). He/she would also have to pay for another business kit (R350) and a supervisory, process and admin fee of R1500. (keeping in mind that when this happens, his/her sponsor get a break a fee of R250.) They boast on the system calling it the BNU break a way system which is said to be copyrighted in Aug 1990. The SSE conducts ongoing recruitment and starts selling to businesses, either by selling the sms service or recruiting them to be part of their downline.

In addition, the main idea I gathered from the 3rd day of training was that we needed to be strategic/manipulative in our approach towards the interviews or selling the service. For example, for recruitment process.

The aplication process goes like this:
1. 1st interview; 2. invited to business opportunity meeting (BOM); 3. 2nd interview; 4. pay R700 and attend 3day training 5. sign contract

The BOM was said to be for the senior management to inform us more about the company. However, the real deal behind this is that it does 80-90% of the work for the recruiter (this was stated by Raymond Thomas - deputy CEO). Otherwise, if you get untrained people suggesting that applicants must pay R700 at the 1st interview no one would sign up. So, the R700 was mentioned after hours of personal, motivational and inspirational speeches in the BOM. One message from Gert Theron snr at this meeting was that if you want to be successful in life you have to make a plan (to get the R700).

Very manipulative.

I should have taken better notes but one thing that was mentioned by Rudi Rebstein was that RRR and SARS are working together as RRR is helping SA bring in more and registering tax payers.

SO how legit is RRR? Being part of a very unstable Mouldmed Group and headed by a man who was convicted of fraud...does this even matter?

**Dave A** · 05-Dec-10, 09:09 AM

At the very least, it does make you wonder if the product test is enough to seperate pyramids from legitimate MLM schemes.

**irma21** · 29-Jun-11, 10:58 AM

They did not go on further on other ways to make a profit.

I will admit that I stupidly paid R700 to take part in this training. This fee was said to be for a businesskit (R350) that we would recieve when we sign the contract and for a registration fee with the sms service provider (R350)...However, as i understand now...The sponsor who recuited me pocketed R200every deal you make. The minimum requirement to become a senior sales executive (SSE) is to enlist a minimum of 10 people (RRR encourages the individual to recruit more so that they can cover the fee suggest next). He/she would also have to pay for another business kit (R350) and a supervisory, process and admin fee of R1500. (keeping ihis/her sponsor get a break a fee of R250.) They boast on the system calling it the BNU break a way system which is said to be copyrighted in Aug 1990. The SSE conducts ongoing recruitment and starts selling to businesses, either by selling the sms service or recruiting them to be part of their downline.

In addition, the main idea I gathered from the 3rd day of training was that we needed to be strategic/manipulative in our approach towards the interviews or selling the service. For example, for recruitment process.

The aplication process goes like this:
1. 1st interview; 2. invited to business opportunity meeting (BOM); 3. 2nd interview; 4. pay R700 and attend 3day training 5. sign contract

The BOM was said to be for the senior management to inform us more about the company. However, the real deal behind this is that it does 80-90% of the work for the recruiter (this was stated by Raymond Thomas - deputy CEO). Otherwise, if you get untrained people suggesting that applicants must pay R700 at the 1st interview no one would sign up. So, the R700 was mentioned after hours of personal, motivational and inspirational speeches in the BOM. One message from Gert Theron snr at this meeting was that if you want to be successful in life you have to make a plan (to get the R700).

Very manipulative.

I should have taken better notes but one thing that was mentioned by Rudi Rebstein was that RRR and SARS are working together as RRR is helping SA bring in more and registering tax payers.

SO how legit is RRR? Being part of a very unstable Mouldmed Group and headed by a man who was convicted of fraud...does this even matter?[/QUOTE]

I HAVE BEEN 1 OF THE STUPID ONES TO PAY MONEY FOR NOTHING THATS WHY THEY ONLY TELL YOU THE REAL STORY AFTER YOU PAID YOUR R850 OH YES I PAID MY DAMN MONEY FOR A WHOLE LOT OF BULL MI JUST NEED TO KNOW ARE THEY ALLOWED TO RIP ME OFF LIKE THIS BECAUSE I DO NOT HAVE MONEY TO GUVE AWAY.....

**irma21** · 29-Jun-11, 11:05 AM

PLEASE PEOPLE DO NOT MAKE THE SAME MISTAKE DO NOT BELIEVE THEM WHEN THEY SAY THERE IS 100"S OF JOBS BECAUSE THERE IS NOTHING THEY NEED YOU TO JOIN SO THAT THEY CAN PAY WHOEVER IS HELPING THEM RECRUIT YOU AND ITS SAD THAT THEY CAN JUST TAKE YOUR MONEY LIKE THAT, IM SURE THERES SO MANY PEOPLE WHO FELL FOR THERE LIES AND THAT BORROWED THE MONEY IN ORDER TO GET A JOB. I LEARNT THAT IF A COMPANY SEES THAT YOU HAVE WHAT IT TAKES THATS GOING TO BENEFIT THEM THEN YOU DO NOT HAVE TO PAY THEM THEY WOULD GIVE YOU TRAINIG FOR FREE!!!!!!!!!!!!!!!!!!! RRR LINK YOU TOOK MY MONEY AND GAVE ME NOTHING IN RETURN...
THEY ARE SUPPOSED TO BE THIS HUGE COMPANY BUT WHERE IS ALL THERE EMPLOYEES THEN?