Regulator flags Crowd1 as suspected pyramid scheme
Springboks Duane Vermeulen and Eben Etzebeth were used to lure ‘gullible people to keep the money-machine rolling’
The regulator of financial services providers (FSPs) has issued a warning to the public about Crowd1, a suspected pyramid scheme that has been banned in Namibia and the Philippines.
In a statement released this week, the Financial Sector Conduct Authority (FSCA) says Crowd1 “is not authorised to render the financial services it is providing” in SA.
Crowd1 is neither an authorised FSP nor a representative of one, and there is also no record of it having applied for a licence with the FSCA, the regulator says.
The FSCA has referred Crowd1 to the SA Reserve Bank, where it is being investigated.
At the weekend, an Afrikaans newspaper reported that the scheme had attracted local celebrities, including Springbok rugby players Eben Etzebeth and Duane Vermeulen. TV presenter Ferdinand Rabie’s face also appeared on a Facebook page praising Crowd1, according to newspaper Rapport.
All have apparently invested in the scheme and their photos are being used “to attract even more gullible people to keep the money-machine rolling”, the Rapport article says.
The FSCA is urging the public to be sure to do business only with entities that are registered with the regulator or registered under the Companies Act. “Any investment or business opportunity that is offered to the SA public (that is not regulated by the Companies Act) must be offered by an authorised FSP.
“While all investments hold risk, one with an unauthorised FSP should be considered extremely high risk. It is also often fraudulent in nature, and likely to lead to losses for customers, for which there is little or no recourse.”
Investors are encouraged to be cautious when investing in alternative financial or investment products, the regulator says. First consider the products and services of reputable institutions that can be held accountable.
To check if the institution or person you’re dealing with is authorised to render financial services, contact the FSCA on toll-free number 0800 110 443 or online at www.fsca.co.za.