The announcement signed by RDB CEO Clare Akamanzi states that World Ventures is not registered as a business entity in Rwanda and that its representatives have been misleading the public that they have authorisation from RDB and other government entities –“a false claim intended to delude the public.”
“Having investigated the business model of this company, it is our conclusion that it possesses characteristics of a pyramid scheme. We want to stress to the public that pyramid schemes are illegal in Rwanda,” reads the statement.
A pyramid scheme, commonly known as pyramid scams, is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products or services.
As recruiting multiplies, recruiting becomes quickly impossible, and most members are unable to profit; as such, pyramid schemes are unsustainable and often illegal in many countries.
Investopedia reports that pyramid schemes have cost many people their hard-earned savings.
“An individual or a company initiates a pyramid scheme by recruiting investors with an offer of guaranteed high returns. As the scheme begins, the earliest investors do receive a high rate of return, but these gains are paid for by new recruits and are not a return on any real investment.”
From the moment the scam is initiated, pyramid scheme’s liabilities begin to exceed its assets. The only way it can generate wealth is by promising extraordinary returns to new recruits; the only way these returns receive payment is by getting additional investors. Invariably these schemes lose steam and the pyramid collapses.
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