The letter-writer says Cook Islanders need to be vigilant about some of the schemes that are promoted in the community, especially the so-called pyramid schemes which benefit only those at the top of the pyramid:
So what are pyramid schemes and how do you prepare yourself to deal with them?
Let’s face it, pyramid schemes are real and are illegal as well as being a scam. Realistically, there’s a few of us on the island that probably has been scammed once or twice in our lives.
A scam is a quick-profit scheme where a person or company cheats another individual or persons. Scams can also involve someone who promises a service, product or deal, takes the money and then never delivers the product/service or deal. Sometimes, we don’t even know it’s happening.
So, are you aware of pyramid schemes, MLM (Multi-level Marketing or Network Marketing) and Ponzi schemes? Because they can even strike in this part of the world.
There are a few schemes or programmes you should watch for.
Some people get involved in Multilevel Marketing or MLM. With multi-level marketing, your income is based on sale of an actual product (Amway is a good example).
Multilevel marketing can involve both direct sales and sales people on your team. It is legal. Whereas in the case of a pyramid scheme, your income is only based on the people you recruit to your team. It is the exchange of money without receiving a product or service at all.
So if you have purchased a product or service and never ever received the product/service at all, it may be a pyramid scheme or just a scam. It is also dependent solely on the continued recruitment of new members, not sales of a product or service.
A legitimate scheme has, as its main feature, products which consumers want to buy or use. If it’s not selling a product or service, buyers... beware.
A Ponzi scheme typically involves some type of fake investment opportunity. People invest money through a “trusted” individual, who touts fantastic returns with little or no risk of loss. No wonder people are so confused about these types of schemes – there are quite a few out there. The bottom line is, do your homework.
Here are some questions to ask: Is this company a reputable company?
Are they a new company or have they been in business for a number of years? Do they sell a real product or service? What global awards have they won? What type of training do you get? Do you know of anyone who has tried out their products or service?
Do they hide their fees or upfront about this? These are some of the questions you should be aware of. It is really up to the individual at the end of the day to ensure you have all the information to make an informed choice.
There are some legitimate companies like Netflix that offer members amazing products/services that are changing the way you do things.
However, before you sign, research the terms and understand fully how the program works. If it’s a red flag and you are unsure about the scheme, then don’t sign up or hand over your money. The risk is yours.
(Name and address supplied)
Internal Affairs Consumer Commissioner Sandrina Thondoo says online scams are in breach of the Fair Trading Act 2008.
“Many of us scrolling through Facebook have come across some very exciting and appealing offers for overseas trips. We might have even been approached by friends or acquaintances to join a group meeting to discuss this amazing opportunity and we may even know some of our families and friends who have joined these groups already.
“But as we know, not everything that shines is gold. On Monday last week, government agencies met to discuss the recent happenings and complaints received from disgruntled or unwary community members.
“The Financial Intelligence Unit (FIU), the Police, the Ministry of Internal Affairs-Consumer Commissioner and Crown Law discussed section 32 of the Fair Trading Act.
“It describes pyramid selling schemes and prohibits the operating and the promoting of such type of schemes in our country. Such action is considered as a serious offence, liable on conviction to a fine not exceeding $10,000 for a person and $20 000 for a corporate body. Both the Crimes Act and the FIU Act are also applicable.
“A pyramid selling scheme makes money by organising the recruitment of more and more members to it. It is unlawful because it is mostly an opportunity to sell an investment; and it is unfair to many participants in the scheme.
“The problem arises when there are no longer members to recruit. This is when the pyramid topples and members below the first recruits lose on their investment. It has been demonstrated many times over that it is impossible for most participants to make money in a pyramid scheme and 88 per cent of the members will lose their investment.
“These schemes work for a few who make money, and fail for many who lose. The ones at the bottom of the recruitment process are defrauded by the ones on the top. This is why pyramid selling schemes are illegal, as only a few people make money on the back of the majority.
“The government is therefore calling on the community to refrain from participating, promoting and encouraging these schemes.
Please tell us some more
about this UN proposal
Having read about the Cook Islands’ government’s push for the country to become a full member of the United Nations, I have to really wonder what will be the cost for of our UN representative’s salary and allowances.
Then there will be the cost of support staff, accommodation, vehicles travel within US and back to the Cook Islands, etc, living expenses and more.
Let see the full picture - not just the public relations and promises what UN membership might do, or could do.
What specific benefits does the Cook Islands government hope to gain? And how does that relate to the average person?
Who is in the frame for the position? It sounds like a retirement job for someone.
I bet the costs will high and the gains will be unable to be measured.