The National Reserve Bank of Tonga has warned people to stay away from a pyramid scheme that has cost its victims thousands of pa’anga.
The alert came as the New Zealand Financial Management Authority warned there had been a rash of scams riding on the back of the Covid-19 pandemic around the world.
Kaniva News understands that an initial group of eight people became involved in the scheme which lured them into paying hundreds of dollars with promises they would to make hundreds of thousands in return.
A Tongan accountant told Kaniva News some people had lost thousands of pa’anga.
The Reserve Bank said people should not take part in what it said was a pyramid scheme.
It said if people took part they did so at their own risk.
People have complained online that they had fallen into a trap and lost money.
However, not everybody was sympathetic, with some saying those who were defrauded should have known better.
The Reserve Bank said various unlicensed investment schemes were being introduced around the country.
“A pyramid scheme is an unsustainable business model that involves promising participants payment, services, or commissions, primarily for enrolling other people into the scheme or training them to take part,” the Bank said.
It said pyramid schemes promised profits which depended entirely on the number of participants or the size of their contributions.
Pyramid schemes were illegal. Anybody running such a scheme was liable to a fine of up to $TP1 million or 30 years in jail or both.
Global fraud
The New Zealand Financial Management Authority said today authorities around the world had warned about a rise in frauds.
It said scams included money transfer fraud, fake investment schemes, often involving crypto-currencies, fake websites, callers pretending to be from official bodies, including the World Health Organisation and phishing schemes
The NZFMA said it had issued 38% more warnings about scams than this time last year.
In June Kaniva News reported on the case of a Tongan woman in New Zealand who lost NZ$5300 in a crypto-currency scam after being lured into it by a friend.
The NZFMA said scammers often took advantage of people’s desire to achieve financial goals such as owning a home, promising to help them ‘get rich quick’ with little or no risk of losing their money.
It said Pacific communities in New Zealand were more at-risk from investment scams.
“Scammers often take advantage of close-knit community groups such as churches, convincing one member who then helps them convince others in the group,” the FMA said.
Samoa
There have been reports of fraud in Fiji and in August Samoa’s Ministry of Commerce, Industry and Labour issued a warning against illegal pyramid schemes or “get rich quick” scams.
The Ministry’s Chief Executive Officer, Pulotu Lyndon Chu Ling, said pyramid schemes were prohibited.
“Such pyramid schemes are illegal and get rich quick scams that may cost our friends and family their hard earned tala,” he said.
