BPS warns of a pyramid scheme in Bermuda
The Bermuda Police Service is aware of a pyramid scheme being promoted on the island. The scheme is being touted as a co-operative with meetings to attract investors being held via video communication platforms such as ZOOM.
A Pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public.
Pyramid schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going.
These schemes are destined to collapse because the earnings, if any, are less than the payments to investors. Pyramid schemes are specifically mentioned in the Consumer Protection Act as being a criminal offence. Those promoting such schemes are reminded that the promise or forecast or even concealment of material facts which induces others to invest or deposit is a criminal offence and is punishable for a maximum of seven years imprisonment.
Detective Superintendent Nicholas Pedro, who heads up the Bermuda Police Crime Division advises: “Unscrupulous individuals would seek to capitalise on the current difficult economic climate, with promises of “get rich quick” investment opportunities. Such promises or “invitations to invest” should be considered suspicious. Remember, if it seems too good to be true, then it probably is.”
If you suspect you have been approached to participate in a pyramid scheme or have information about such a scheme being operated, please call 211 or, the main police number, 295-0011.