Getrichquick pyramid scheme Newport is ignoring a Reserve Bank order to stop trading and is still holding meetings and it seems gullible South Africans are still prepared to take their chances on gambling away their money.
Newport is under investigation by the Business Practices Committee in terms of Section 8(1)a of the Harmful Business Practices Act.
The pyramid scheme was suspended by a notice in the Government Gazette earlier this year from canvassing people to join it until September 13 this year.
In spite of several warnings on the danger of financial loss and investigations into pyramid schemes by the Reserve Bank, the Department of Trade and Industry's Business Practices Committee and Personal Finance, people are still handing over their hardearned cash either in disbelief of the dangers of pyramid schemes or in the hope that Lady Luck will smile on them.
Even the muchpublicised collapse of the Rainbow pyramid scheme, through which most of the participants suffered huge financial losses, has not managed to put people off taking part in these schemes.
Over the past two weeks, Personal Finance readers have reported that Newport is still holding meetings. People at meetings are being told not to waste time in making up their minds on whether or not they want to invest R14 000 in the scheme, as they won't get a chance for at least six months.
Readers also report that they are being lured to put money into Balltron which works on a pyramid structure and, amongst other things, markets an investment product put together by a direct sales, shortterm insurance brokerage company called Clientele.
The product can, however, be bought with or without being involved in Balltron. The difference is that the owners of Balltron get a slice of the commission when it is sold through the pyramid company. The legality of the Balltron operation has not been questioned but its claims of bringing riches to individuals are disputable.
Sipho Maseko, a member of the Business Practices Committee, says Newport's future should be known soon.
He says the committee this week wrapped up investigations and meetings with Newport. A report and recommendations on whether the pyramid scheme is conducting a harmful business practice will be submitted to Trade and Industry Minister Alec Irwin soon.
It will then be decided whether Newport is in fact a pyramid scheme and therefore illegal.
Maseko says pyramid schemes are mushrooming across South Africa and are extremely difficult to police.
"You cannot stop people from putting money into these schemes. Many know the risk. They see nothing wrong with the scheme until it collapses."
Maseko says it is difficult to predict what will happen in future.
"It might be necessary to extend the powers of the Business Practices Committee and to get public debate going on the matter."