North Devon warning over dodgy get-rich-quick scheme
People in North Devon and Torridge are believed to be pouring thousands of pounds into a dubious pyramid get-rich-quick scheme.
Two people, who did not want to be named, say a number of people have been pressurised to hand over thousands of pounds — sometimes at meetings in village halls.
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One man, a farmer, was certain there was a pyramid scam operating in the area.
He said: "Quite a few of my friends are doing it and they have received their money but I'm worried that somebody will get caught."
He said the people running the scheme were urging people to hand over £3,000 with the promise they will get £24,000 back in return — but only if they recruited eight people to also donate £3,000.
The farmer, who has not joined the scheme, said contributors he knew were asked to take £24,000 to the people running the scheme in Bristol, where it was allegedly swapped for a different bundle of cash.
It has not been possible to verify these claims, although such schemes usually operate in a secretive way to avoid the attention of trading standards.
A Barnstaple woman said her boyfriend had been invited to a meeting to take part in a scheme, the details of which matched what the farmer told the
Journal
.
"A lot of his friends and quite a few people have invested in it. It just seems so dodgy and you have to go and invest money in cash."
She did not know who was organising the scheme but said it was being promoted by word of mouth.
She said the pyramid scheme was perhaps using a cloak of charitable giving, possibly by saying some of the cash was going to good causes.
Because it is impossible to sign up enough members to sustain the payments forever, it is a mathematical certainty that more people will lose money than make money.
Such scams, which have been found operating from Bristol and South Wales this year, are illegal.
DS Praveen Naidoo, from North Devon CID, said: "We have had third party reports of a chain gifting scheme operating in the South Molton area.
"We are liaising with the Office of Fair Trading, who are the lead co-ordinating body in this field, and Devon Trading Standards. Our advice is don't get involved and stay away from those schemes. If something sounds to good to be true, it generally is."
If you have been affected by a pyramid scam in North Devon or Torridge please email awilshaw@c-dm.co.uk or you can phone Trading Standards on 01392 381381.
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by anonymous, barnstaple
Friday, December 05 2008, 1:12PM
“Your completelty right, that is what i think, if people know that it is a gamble, and it is legal then why cant people do it, i think the only way people are going to lose their money in these perfectly legal schemes is by the media high about them at the moment. i have heard about the scheme, nobody has lost any money, its just friends working together to make money for themselves. I dont see any wrong in it. the only people who are making this bad press about it, are those who have no idea whatsoever as to how it works. alot of money has been made for charity, and alot of people have made money.”
by Stephen, Barnstaple
Thursday, December 04 2008, 11:21AM
“I am an intelligent adult of sound body & mind. I have £3000 that i am willing to gamble with (£3k is the maximum stake not the definitive). I would be involved in domestic gaming (2005 gambling act) with like minded people. This is perfectly legal & i will do this through informed & researched choice. I will place my bet alongside 7 other intelligent adults into a game of luck & chance (2005 gambling act again). To win my jackpot i must correctly answer 4 trivia questions. If i get 1 wrong i lose. Simple. No different than any t.v gameshow, the Grand National or any lottery. I buy a chance. The lottery gives me an estimated 1:14,000,000 chance to win the jackpot, if i use the figures quoted below of 88% failure that gives me a 12% or 1:8 chance of winning the jackpot of £24k. Now why wouldnt i join a legal domestic game?”
by Ed, Barnstaple
Wednesday, December 03 2008, 2:48PM
“Could the childrens hospice confirm that they have received £36,000 from this scheme - is this correct or a lie? Lets see the paperwork for all the charitable donations please - I won't hold my breath waiting though.”
by Ed, Barnstaple
Wednesday, December 03 2008, 2:46PM
“Watch people cry fraud when they start losing money soon since what person would touch this scheme with a barge pole now? The ones who have just invested will not see a return for their money so go back to the "friends" who introduced you to the scheme and ask for your money back quickly before they spend it.”
by anonymous, barnstaple
Tuesday, December 02 2008, 5:17PM
“But why havent trading standards done anything about it if they have been to a meeting about it, they cant have found anything wrong with the scheme...?”