The Fair Trading Commission (FTC) is hoping for new legislation that will allow it to give consumer protection authorities the ability to prosecute owners or promoters of pyramid-type schemes and suspected of defrauding “investors”.
FTC, director of Consumer Protection, Dava Leslie Ward said that the existing legislation does not allow for putting in place the measures to make offenders pay because of a loophole in the Consumer Protection Act.
She said that when the FTC realized the challenge it faced in being able to help people recoup any money lost through these schemes, officials had to do the next best thing and embark on a campaign to warn Barbadians against investing in them.
“Everything that we could do to spread that information, we did. But it was not a case in which we felt the public did not know. These are challenging times and there are unprecedented times, so I think people wanted to hold onto it and did not necessarily want to hear what we were saying; but unfortunately now, they have to deal with the repercussions of this situation.”
Leslie Ward said she has not seen so many pyramid schemes in Barbados before and suggested that it may be a sign of the difficult economic times being experienced by people, particularly where the coronavirus (COVID-19) pandemic has taken many jobs or reduced the spending power in some families.
She also cautioned Barbadians to be wary of certain online market places or investment opportunities which are being disguised, but are in fact pyramid schemes.
“When we did our own investigations, we felt that these things were not investment opportunities, but there were in fact pyramid schemes. We realized that the scammers were becoming more crafty and they were using these tactics to get consumers to divorce themselves of their hard-earned money. We realized that they started to take advantage of a well-known market tactic of seeking to build trust through family, friends and colleagues.
“How they were able to capture people is by providing the social proof. Like for example, if I knew some person who is quite popular, they would have used that person as a spokesperson for the group and because of that, there was a certain level of trust that people would have engendered in that. What they did was also made sure that some people got their money,” Leslie Ward added.
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