Pretoria – The National Consumer Commission (NCC) confirms that it has received a complaint against Crowd1 and is investigating the business to determine if there are reasonable grounds to launch a formal investigation. Should the investigation reveal any contravention of the Consumer Protection Act (CPA), the Commission will decide on who to prosecute.
The NCC would like to remind consumers that participating in a pyramid or multiplication scheme, promoting or recruiting other consumers to participate in a scheme is a punishable offence. NCC’s Acting Commissioner, Ms. Thezi Mabuza says consumers must enquire with the authorities if the scheme is registered before investing their money. Consumers need to be wary of too good to be true offers.
“Covid-19 caused economic disruptions and consumers are trying to make extra cash, however, the CPA prohibits participating in any illegal scheme. Section 43 of the Act discourages consumers from participating or knowingly and unknowingly promotes a multiplication scheme, and doing so constitutes an offence” she said”.
A multiplication scheme exists when a person offers, promises, or guarantees to any consumer, investor or participant an effective annual interest rate, as calculated in the prescribed manner, that is at least 20% above REPO rate.