Experts raise the red flag over pyramid scheme being probed in Brazil
A man browses the TelexFREE website. Rwanda government is
investigating the multi-level Internet marketing service on suspicions
that it could be a Ponzi scheme. Photo/Cyril Ndegeya
By Edmund Kagire Rwanda Today
Posted Friday, February 28 2014 at 20:03
In Summary
TelexFREE, an Internet-based service, requires new members to pay more
than $1,570 (Rwf1,067,600) and post three advertisement links to start
earning $100 (Rwf68,045.26) weekly. By recruiting new members, one
stands to earn bonuses, it claims.
TelexFREE has been banned in Brazil and is under investigation in the
US and other countries around the world on suspicions that it could be
a Ponzi scheme.
The government is investigating the operations of a business that has
attracted many Rwandans with its quick cashback philosophy, typical of
pyramid schemes also known as Ponzi schemes.
TelexFREE, an Internet-based service, requires new members to pay more
than $1,570 (Rwf1,067,600) and post three advertisement links to start
earning $100 (Rwf68,045.26) weekly. By recruiting new members, one
stands to earn bonuses, it claims.
TelexFREE has been banned in Brazil and is under investigation in the
US and other countries around the world on suspicions that it could be
a Ponzi scheme.
Emmanuel Bayingana, the official in charge of Competition at the
Ministry of Trade and Industry, confirmed that TelexFREE was being
investigated.
"We are doing an assessment of the operations of TelexFREE," Mr
Bayingana said. "The investigations will determine the way forward.
The assessment will be concluded next week."
He noted that the ministry, Rwanda Development Board (RDB) and the
central bank will come up with a position, especially if the business
is found to be risk-prone.
The government has been strict on pyramid schemes and multi-level
marketing businesses with a number of them, including Questnet, banned
from operating in Rwanda.
At the TelexFREE offices in the Kigali suburb of Remera near the taxi
park in a new complex that also houses Bank of Kigali, a few office
staff members lurk around trying to win more clients.
"It's a profitable business. You can join and make $100 a week. I make
the same every week by just posting three links," one of the staff
members only identified as Hakim said in an attempt to convince the
writer to join the scheme.
TelexFREE is a multi-level Internet marketing scheme which uses VoIP
technology to share advertisements online. Fred Ndoli, one of the
members and an active recruiter, maintains that the business is
genuine.
Recoup investment
"People are making money," Mr Ndoli said. "I earn $100 a week after
investing in it. I post links from a computer or using my phone. It
takes only five minutes."
Mr Ndoli said he only joined two months ago but was confident he would
recoup his investment and make even more money soon. He insisted that
those crying foul failed to fulfil their part of the agreement.
"I think they failed to post links," he said. "You make money by
posting links. If you don't post links, you don't make money."
Three people who lost their savings in the scheme told Rwanda Today
they were told that they failed to "post links" to recover their
money.
One of them, who joined recently, said he was informed that once one
fails to post links they forfeit their investment.
http://www.theeastafrican.co.ke/Rwanda/News/Rwanda-govt-probes-TelexFREE-over-Ponzi-scheme-claims-/-/1433218/2226134/-/aha5x8/-/index.html
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