Multilevel marketing and pyramid schemes
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They say a sucker is born every minute! In the Sri Lankan case it must be ‘every second’ given the way people are very quickly sucked into ‘get rich’ schemes particularly through the Internet and WhatsApp where secure pin numbers and bank details are ‘freely’ provided by gullible persons.But today’s column is all about pyramid and bogus plantation schemes. However, before that let’s listen to what our veteran trio is discussing under the margosa tree. Fetching my mug of tea, I walked to the kitchen window where I could hear their conversation.
“Parlimenthuwey eka eka prashna thiyenawa mae davas wala. Manthrila kae gahanawa. Egollo hasirenna danney nae. (There are all kinds of problems in Parliament these days. MPs are shouting and they don’t know how to behave),” said Kussi Amma Sera. “Samahara welawata kantha manthrilata naraka bashawen baninawa (Sometimes female MPs are abused in bad language),” noted Serapina. “Aanduwe manthrila hasirenna dena ganna oney, eka eka prashna walata adenney nethuwa (Government MPs should learn to behave themselves and not be dragged into controversies),” noted Mabel Rasthiyadu.
They have a point. Parliament has turned into a slanging match between the two sides and, sometimes, embarrassingly when there are children invited to watch the proceedings – to show how democracy works!
Moving onto today’s topic, I was drawn into it by a morning call by Kalabala Silva, the often agitated academic. “I say…..there is a lot of talk about bogus get-rich schemes. In one ‘scheme’ that appears in social media various influential personalities talk about how you can make money within seconds of a small investment,” he said.
“I have also seen that and I think these personalities are doctored figures using AI (artificial intelligence), defaming these individuals. Social media is full of these schemes,” I said. “It must be difficult to monitor and take action but the government and the Central Bank need to come up with some mechanism to catch these crooks behind these bogus, quick-rich schemes,” he said.
The government and the Central Bank are indeed trying hard to warn the public. Despite these warnings, the Sri Lankan public is gullible and fall prey to these quick-rich schemes. Don’t we all remember the GoldQuest scam and the Golden Key fiasco, where Sri Lankans lost millions of rupees in investments?
In May this year, the Central Bank urged the public to refrain from investing in unregulated plantation schemes promising ‘huge’ returns on deposits.
“We have noticed a growing number of pyramid schemes in the plantation sector offering very high returns on investments. If funds are collected through unregulated schemes, the Central Bank will do its maximum to bring those behind the scheme to task,” Central Bank Governor Dr. Nandalal Weerasinghe was quoted as saying in one newspaper.
He said that “those investing in such schemes must ask the companies taking the money as to how they could give such a return within the specified time”.
In another exercise to warn Sri Lankans against pyramid schemes, the Central Bank organised an anti-pyramid scheme week campaign on July 14-18 to alert people against such investments. The campaign was initiated under the theme: ‘Pyramid is a trap – don’t get into the wrong track’.
The campaign aimed to raise widespread awareness on Prohibited Pyramid Schemes and the significant risks they pose to individuals and the broader economy. It was expected to generate substantial national awareness among a wide cross-section of the population, including school students and teachers, officers of the Tri-Forces, Civil Security Department Personnel, Officers of the Sri Lanka Police, Government Sector Employees and the Public, according to a Central Bank statement.
Outreach activities were carried out through 6,172 schools and 14,022 Grama Niladhari (GN) divisions’ island-wide, ensuring extensive grassroot-level coverage and community engagement. Throughout the awareness week, participants were educated on legal provisions relating to prohibited pyramid schemes, the deceptive nature and structure of such business models, risks and financial consequences of investing in pyramid schemes, real-life accounts and painful experiences of victims.
A multi-platform media strategy was utilised to ensure a broader and effective outreach. This included newspaper advertisements, social media campaigns, educational posters, live-stream sessions, television and radio programmes, news taglines and public seminars across the country.
The campaign aimed to raise widespread awareness on Prohibited Pyramid Schemes and the significant risks they pose to individuals and the broader economy.
In a recent article, C.A. Saliya, a senior Chartered Accountant, wrote how in 2003, he was approached by a well-known banker and the dean of a leading state university’s Faculty of Commerce, both of whom attempted to pitch the notorious Gold Coin pyramid scheme ‘to me’. “During one of their public presentations, I intervened by illustrating the scheme’s unsustainable mathematics – demonstrating the inevitable collapse of the scheme to the audience, helping many people avoid falling victim to the Gold Coin scam,” he wrote.
He said: “While the slogan ‘Pyramid is a trap – don’t get into the wrong track’ sounds catchy, it raises an important question: How can people avoid a pyramid scheme if they don’t know what one looks like? For many Sri Lankans, especially those without financial education, pyramid schemes are often hidden behind friendly faces, smart-sounding plans or online platforms that promise easy money. Therefore, telling people ‘don’t fall into the trap’ is not enough, unless they’re clearly taught how to recognise the trap in the first place. Without showing what a pyramid scheme really is, how it works and what signs to look for, this slogan risks becoming just a rhyme with no real impact.”
Walking into the kitchen for the second time, I heard the trio continuing their discussion on ‘abusive’ parliamentarians, while my mind was filled with pyramid schemes wondering when ‘our people’ would learn to stop getting trapped and being gullible!
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