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Company which ran pyramid scheme in SA has bank accounts frozen

Poster for Up Money used on social media to lure investors

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A complaint from a person in East London has led to the Asset Forfeiture Unit(AFU) obtaining a preservation order to freeze the bank accounts worth more than R18 million of the directors of a "pyramid scheme", UP Money.

This was announced on Tuesday during a joint virtual media briefing of the National Consumer Commission, the Asset Forfeiture Unit and the National Prosecuting Authority.

The pyramid scheme, which is neither registered with the Reserve Bank, registered stokvel, nor a financial services provider, mainly used social media to recruit members.

New participants were required to pay a once-off joining fee of R180. This qualified them for a meat pack and they would then have to recruit another five people as part of "Level 1".

The higher the levels the more you benefit from groceries and other food parcels.

Although the scheme had received R42 720 501.82 in just two months, more than R12.5 million was blown through purchases at various retail stores, and buying three luxury motor vehicles, an Audi TT, a Hummer and a Jaguar XKR Coupe.

All three vehicles were attached by the AFU.

Following the complaint from East London, the National Credit Commission (NCC) launched an investigation which revealed that Up Money (Pty) Ltd contravened the Consumer Protection Act by promoting and causing members of the public to join and participate in a pyramid scheme.

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