Watchdogs are warning against a suspected pyramid scheme targeting students and young people on social media.
According to the Competition and Consumer Protection Commission (CCPC), the scheme uses the image of a flower and invites people to join by “investing” €150.
Once participants recruit others, they move to the next tier, from where they keep progressing as more join the scheme, until they reach the centre when they receive a payout.
“Pyramid schemes are illegal and those who knowingly participate in them are liable for prosecution,” the commission warned on Thursday.
Under the Consumer Protection Act, 2007, it is an offence for anyone to establish, operate, promote or knowingly participate in pyramid schemes. Anyone convicted could face fines up to €150,000 or five years in prison.
The commission investigates potential breaches of consumer law by Irish-registered companies.
Such schemes work by recruiting people to pay those a tier above them. As more people join, those ahead of them move up through the scheme’s levels, making more cash as they do so.
Supply runs out
However, the CCPC pointed out that the supply of potential investors inevitably runs out, collapsing the pyramid and costing the majority of participants their money.
“The CCPC is currently investigating this scheme and are warning consumers not to engage with it,” the commission said.
“If you are approached to join any kind of pyramid promotional scheme, please contact the CCPC immediately through our helpline on 01 402 5555.”
This is the latest pyramid scheme to circulate on social media following several others last year. The Garda and other authorities said the number coming to their attention had grown since Covid-19 lockdowns began last year.
