Durban - Thousands of South Africans who invested in the multibillion-rand travel agency WorldVentures, and eight other alleged pyramid schemes, are about to take a knock as they scramble to protect their money.
This is pending an announcement on Monday or Tuesday by the National Consumer Commission (NCC) which insiders say will be “unfortunate”.
The American-based company was placed under investigation along with the eight suspected schemes, in September. The other schemes include Wealth Creation Club, Kipi also know as My Deposit 24, Make Believe, NMT Investments, Instant Wealth Club, MMM scheme, DIPESA and Sikhese (Pty) Ltd.
It is estimated that there are more than 20 000 WorldVentures members signed up in South Africa. It is unclear how many people invested in the other schemes.
WorldVentures is a home-based direct selling travel club.
Trevor Hattingh, spokesman for the NCC, confirmed that the preliminary investigation had been concluded and that this week the findings would be made public.
He said that the initial information regarding the activities of the schemes came from the SA Reserve Bank and the Financial Services Board, and that the NCC worked closely with both bodies to reach its findings. The NCC also joined forces with the Specialised Commercial Crime Unit on the matter.
“Should the findings reveal that it is a pyramid scheme, the matter will be handed over for criminal proceedings to be instituted because according to South African law, the company would be operating illegally.
“The aim of the investigation was to establish if the business models of the schemes were contrary to the National Consumer Protection Act,” he said.
A source within the NCC, who could not be named because he is not authorised to speak to the media, said that the announcement would have severe ramifications and would be unfortunate for the thousands of South Africans who quit their jobs to take on the schemes as a full-time career.
And because WorldVentures is American and all monies are earned offshore, he feared that many would “make a run for it” before criminal procceedings were instituted.
He said those who invested in the schemes would be accountable for the monies earned so far. “Attaching their assets would be one way to deal with it, and this is what commercial crime may do. But the case would now be left in the hands of police to deal with.”
Meanwhile, in a letter sent to WorldVentures members, seen by the Sunday Tribune, the executive team states that they have noted with concern the investigation by the NCC.
“We understand the unease and frustration this situation is causing. We feel it too. While this process plays out, we ask South African representatives not to comment publicly on social and other media.
“Also please do not contact any regulatory authority or agency, even if to enquire as to the status of any investigation or action, so they can engage with us directly to get a better understanding of our company, our business model and our deep commitment to providing our customers with world-class products and services.”
In another letter sent to some high-ranking WorldVentures officials, the company’s director of corporate communications, Laura Wards, said: “It should be repeated, that WorldVentures has not had any communication from the NCC nor any regulating authority regarding the allegations of an investigation into the legality of the company.
“We have provided all of our marketing and legal documentation and details of its operating and business model to senior counsel and obtained a positive written legal opinion on the legality of our programme as it operates in the market. We feel confident that if the agency does reach out to us at any time, we will be able to demonstrate the validity and legality of our programme,” it read.
Brigadier Hangwani Mulaudzi, spokesman for the Hawks said that should the schemes be declared pyramid schemes, a criminal investigation would be conducted.
The Asset Forfeiture Unit would also get involved to attach the assets of those involved. In the case of a scheme where monies are offshore, he said police would work with Interpol to conduct their investigations.
How it works
WorldVentures offers members discounted holiday packages around the world, and the more people you recruit, the more you earn.
WorldVentures requires a membership fee. Points are earned through these payments, allowing you to use them to book packages. If you sign up four other members, your monthly fee is waived.
There is a commission structure in place, which highlights your earning potential based on the number of active members that make up your cycle.
Sunday Tribune