The National Consumer Commission (NCC) is receiving complaints from consumers alleging that they have been swindled of their money by the promoters of Obelisk. The complainants allege that they were recruited by close friends and relatives, who persuaded them to purchase a “bitcoin mining machine” from Obelisk to generate daily income. These machines according to the participants cost between R340.00 and R450 000.00.
Participants were recruited on social media platforms such as Facebook where they were required to make a minimal investment. Upon joining, and making an initial investment, they were added to different Obelisk WhatsApp groups. Some participants received minimal returns to lure them into making more investments. Participants allege that the problem started when they invested bigger amounts and were unable to make any withdrawals. When confronting the operators about the inability to make withdrawals, they were blocked from the system and removed from the WhatsApp groups.
The preliminary findings indicate that Obelisk is a multiplication scheme. The CPA states that a multiplication scheme is an arrangement where a person offers, promises, or guarantees any participant an effective annual interest rate that is at least 20 percent above the REPO Rate as of the date of investment. The scheme is operated by non-South African Citizens who are using South African bank accounts and either South African or non-South African cellphone numbers.
These bank accounts were opened by South Africans who handed them to the perpetrators, the same is done regarding the South African cellphone numbers. To date, the NCC received 25 complaints from participants who lost a total of R750 000. 00. “While the exact amount lost by participants in this scheme is unknown, the NCC’s preliminary investigation indicates that there were about 4000 participants from eight WhatsApp groups. These participants lost about R112 million.
Multiplication schemes are prohibited in terms of the CPA which provides that a person must not directly or indirectly promote, join, enter, or participate in a multiplication scheme. This implies that the operators of Obelisk and those South Africans who either invested in Obelisk or opened bank accounts or cellphone numbers engaged in illegal activities.
History is replete with many examples of these schemes that inevitably collapsed, often leaving a trail of financial distress, broken trust, friendships, and even broken families. According to the Global State of Scams Report 2022 published by the Global Anti-Scam Alliance (GASA), it is estimated that in 2021 only, South Africa lost about R1.8 billion due to scams.
Acting Commissioner Mabuza said “pyramid and multiplication schemes increased sharply since 2020 owing to the advent of Covid 19 pandemic, accelerated levels of unemployment, and people looking at making quick cash in the shortest time possible. We implore members of the public to spare themselves from heartache and suffering by not joining these deceptive schemes” she concluded.
Facebook Comments