Within the current economic climate, Ariza Credit Union is aware that many people may have financial vulnerabilities and would therefore be looking for avenues to supplement their income.

We encourage members and the general public to be vigilant as it relates to investment vehicles that may be presented as opportunities to earn additional income but can result in the loss of hard- earned savings.

One such investment “opportunity” which is in fact a “pyramid scheme” has been circulating recently. This involves the exchange of money primarily for enrolling other people into the scheme without a legitimate product or service being delivered.  These schemes are often disguised as transactions in new or poorly understood investment instruments, including different types of securities, foreign currency trades, precious metals and even exotic commodities.

Generally participants are required to recruit friends or family members to enter the scheme and make contributions.  If you do this successfully, you are paid or gifted out of their contributions.  Your family and friends are then told to recruit others to keep the chain going.  Your money is not actually invested in any product but rather, it is simply paid in a defined sequence to other members. Eventually, due to a limited pool of persons, the number of new recruits fails to sustain the payment structure and the scheme collapses with most people losing the money they paid in.  This is particularly true for small territories, like Grenada, with a small or finite population.

Pyramid schemes have several distinguishable characteristics; these include:

1. No genuine product or service is sold. There is no legitimate or tangible product or service involved (i.e. you often do not get a product or service in return for your initial monetary contribution or investment)
2. Emphasis on recruiting. There is no financial return unless you have successfully introduced a number of new recruits into the pyramid, who in turn introduce other recruits.
3. Promises of high returns in a short period of time. They revolve primarily around members earning money by merely recruiting new people perpetually; the failure of which would cause the scheme to fall apart.

When embarking on investment opportunities it is important to verify that it is a legitimate business that is regulated and licensed to conduct such transactions.

Ariza encourages members to seek professional advice from competent professionals to help evaluate potential investment opportunities, minimize risks, and avoid becoming victims of fraud.