Governor Dr Sione Ngongo Kioa. Photo/Tonga Broadcasting Commission

The National Reserve Bank has warned the public against investing in a pyramid scheme it says is being run by an American company, WorldVenture.

And the Bank said anybody convicted of promoting or managing such a scheme could face a TP$1 million fine and 30 years in jail.

It said anybody investing in such a scheme did so at their own risk.

WorldVenture, which has faced legal battles in several countries, was promoting itself in the kingdom as a tourism business.

It promises members discount travel packages and commission/bonuses for people who sign up as “Independent Representatives” – essentially investors working from home sales staff trying to make money back by signing up other people to the scheme.

Investors have to keep finding new people to sign up to the scheme to make any money.

According to Australia media reports, it could cost up to TP$4500 a year to join the scheme, keep up monthly membership payments and take advantage of what are promoted as special travel deals.

Questions

How much money the company’s investors actually make is open to question. WorldVentures’ 2015 Annual Income Disclosure Statement said that 77.76 per cent of so-called “Independent Representatives” did not earn a commission during the year.

Of the 22.24 per cent who did, the median was $US150, or TP$338, far less than the money needed to buy into the scheme and keep up monthly member payments.

The Reserve Bank said its Financial Intelligence Unit had confirmed that WorldVenture had been declared a pyramid scheme in several countries, including Solomon Islands, Brunei, Norway and South Africa.

The Reserve Bank said WorldVenture fell under the definition of a pyramid scheme as defined by the Financial Institutions Act.

Pyramid schemes are illegal under Section 3A of the Financial Institutions Act.

The Act says that anybody who promoted or managed a scheme depended on increases in the number of participants in the scheme or in the size of their contributions to the scheme, was liable on conviction to a fine of up to TP$1 million or 30 years in jail, or both.

“The general public is hereby warned from joining such a scheme.” the Bank said.

The Bank said WorldVenture has not been issued any license by relevant authorities to conduct business in Tonga.

Legal trouble

WorldVenture has been beset with legal problem and government challenges in several countries.

Last year WorldVenture faced legal action from its “independent representatives” who had not been paid commissions for several months.

South African media estimated up to 20,000 people had signed up to the scheme.

Elsewhere in Africa the Rwanda Development Board has warned the public against engaging with the firm and terming it as a pyramid scheme.

WorldVenture was declared a pyramid scheme scheme in Norway in 2014 and stopped trading. Legal attempts to overturn government ruling against it failed.

The main points

  • The National Reserve Bank has warned the public against investing in a pyramid scheme it says is being run by an American company, WorldVenture.
  • And the Bank said anybody convicted of promoting or managing such a scheme could face a TP$1 million fine and 30 year in jail.
  • It said anybody investing in such a scheme did so at their own risk.

For more information

WorldVentures sued for millions by reps

https://www.iol.co.za/sunday-tribune/news/worldventures-sued-for-millions-by-reps-16636860

World Ventures lose case against Norwegian Ministry of Culture

Rwanda warns against ‘Ponzi-like’ WorldVentures

https://www.theeastafrican.co.ke/news/ea/Rwanda-warns-against-Ponzi-scheme-like-World-Ventures-/4552908-4755968-3en0kk/index.html

1 COMMENT

  1. Lelei ‘aupito!!

    Kuo pau ke ke ta’ofi ‘a e kaka ‘i he pilamita. Ko ha palopalema fakavaha’apule’anga. ‘Oku kau mamahi ‘o e ngaahi kaka ‘a e kakai ‘e lauimiliona ‘i he mamani. Pule’anga ‘o Tonga ‘oku fie ma’u ke fai ta’e-fakalao ‘i he “MLM” (fakamaketi levolo kave) kotoa pe ngaahi pisinisi. ‘A kinautolu kotoa pe ‘oku ngaue ‘a e founga tatau pe, ‘a ia ‘oku fakafalala ki hono tanaki atu ‘a e tokolahi ‘o e kaingalotu (kau mamahi). ‘E tanaki ‘a e kakai ‘i ‘olunga ‘i he pilamita e pa’anga kotoa pe, lolotonga ‘e kotoa pe mole ‘i he he kakai ‘i he konga ki lalo ‘a e pa’anga.

    Kole ki he pule’anga ke fai ta’e fakalao kotoa “MLM” (fakamaketi levolo kave) ngaahi pisinisi.

    Malo ‘aupito.

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