Advisory Warning No. 1 of 2020 - Pyramid Schemes (2020-07-01)

Summary

This is a public advisory issued by the BVI Financial Services Commission warning consumers and the general public about pyramid schemes and related investment scams. It is informational in nature, issued under the FSC's general warning power in section 4(1)(l) of the Financial Services Commission Act, 2001, and does not create new rules or filing requirements for regulated entities.

• No genuine product or service: Money is exchanged mainly for enrolling others rather than for any real product or service.
• Emphasis on recruiting: Returns depend on successfully recruiting new participants rather than on any underlying investment.
• Promises of high returns quickly: Schemes rely on perpetual recruitment and collapse once new recruits cannot be found.

The FSC urges the public to be cautious of arrangements exhibiting these features, including schemes disguised as cultural savings arrangements (such as partner hands or sou sou hands) or restructured recruitment models, and to seek professional advice before investing. Members of the public are directed to contact the FSC's Enforcement Division with questions or reports.