Too Good To Be True?

The money-making enterprise Crowd1 is attracting celebrities and ordinary people, but experts warn it may be a pyramid scheme

He'd seen pictures on social media of people posing with luxury cars and read reports of recruits saying the scheme had changed their lives. Money was pouring in, they said, and it was all so easy.

For Jason Peters*, a salesman with three children from a town in the Northern Cape, it seemed like a no-brainer.

He started investing in Crowd1 in December and all in all has sunk R5 500 into the scheme, which promises handsome rewards. All you do is invest in a “wonder package”– mostly for online learning, gambling and gaming – then recruit more members and ka-ching! The bucks barrel in.

At least, that’s what a marketing video from Barend Spies, Crowd1’s director in South Africa, promises.

Jason had hoped his investment would bear fruit, particularly as lockdown had hit him hard. He’d had no income for three months and he and his family were surviving on UIF.

“I won’t lie,” Jason says, sounding close to tears. “It’s been tough.”

He’d been counting on a payout on the bonus points and rewards he’d accumulated by recruiting followers. The money should’ve arrived on 15 June, when Crowd1 investors got their quarterly payouts. “But I got R27. That’s it.”

Jason initially bought the “white package” for R1 800 “but then there was a promotion”, he says. “I could upgrade from white to gold and that would cost me another R3 700.

“I recruited one person, while he recruited another six – this increased my rewards significantly. It made me excited for the payout on the 15th. I was counting on that money. But now, nothing.”