Publication Date: 15/03/2016

Ponzi and Pyramid Schemes have no barriers and cut across all racial, educational and economic structures.

The common feature of Ponzi and Pyramid schemes is that they are underpinned by unnaturally high returns within a short investment period. Now ask yourself if these unnaturally high returns were possible why is it that banks have not tapped into them for their clients?

Both Ponzi and Pyramid Schemes seem like legitimate investment vehicles but over time inconsistencies begin to emerge. The public should be aware that there are illegal deposit-taking schemes operated by unscrupulous “brokers” who continually replicate the same schemes under different names across the country.

Ponzi scheme (named after Charles Ponzi the 1st convicted Ponzi fraudster) is characterised by large deposits into fraudulent investments with initial large returns. A Pyramid scheme is based on the initial member’s recruitment of more members who also invest money. Both schemes initially pay-out sizeable dividends to lure the clients into investing more money and within a short period of time no returns are received and that is when the schemes start to unravel.

Clients wishing to invest their money should do so with a reputable and registered deposit-taking institution and also check that the financial adviser is accredited to advice clients on financial matters.

Important contacts:

To verify a financial institutions registration – visit

To verify a financial adviser’s registration – visit

To report fraud and unscrupulous advisers – contact the Financial Services Board Fraud and Ethics Hotline on 0800313626 /