Publications
Partners
Cape Town – Alleged pyramid scheme MMM “has delivered (money) to people who are early adopters, it’s been incredibly clever at its marketing skills, but it will come to an end … and there will be tears”, according to City Press consumer finance journalist Maya Fisher-French, who is an expert in identifying potential pyramid schemes.
WATCH: Interview with City Press consumer finance journalist Maya Fisher-French
“MMM is a pyramid scheme and all pyramid schemes have an ending,” said Fisher-French.
“Often it’s the poorest of the poor who are caught out at the end of that,” she said. “They’ve put money in and suddenly the scheme collapses and they don’t get their money out.”
Her warning comes as MMM’s global affiliate, MMM Republic of Bitcoin, collapsed on the weekend. MMM SA took on its portion of the liability, which its members must now pay off over time. The scheme is currently being investigated by the Hawks.
LATEST: New Russian anti-Ponzi law could target MMM founder
Poor will lose out
Fisher-French said those living in poverty have more to lose if they put money into the system. “They’re putting in money that they can ill afford to lose in the first place,” she said.
“I wouldn’t be surprised if those people that are putting money in have borrowed that money. They’ve gone to the micro lenders to borrow this money and put it in … and that’s going to compound the problem.”
READ: Fisher-French's first analysis of MMM
Fisher-French is not surprised that so many MMM members are coming forward to say the scheme is a success and that they are making money.
“Obviously there are people who have been early adopters,” she said. “They’re the people on Facebook, they’re the on Twitter and social media, saying: ‘but it’s working, I’ve made money.’ But somewhere along the line it all peters out, it folds, and it takes a lot of money with it.
“People are initially going to make a lot of money. Then, when it collapses, they blame the media, they blame the regulators, they blame all sorts of people, instead of understanding that by the very nature it implodes.”
THE BREAKING STORY: Alleged SA Ponzi scheme MMM’s global pyramid collapses
Marketing success story
MMM has an extremely powerful marketing strategy, where it rewards members for filming and posting testimonials explaining how MMM changed their lives. It also uses evangelical ideological belief systems that makes “believers” feel they’ve found an enlightened movement that will deliver them from poverty and the “evil financial system” that oppresses them.
AFFECTED: Have you been the victim of a Ponzi or pyramid scheme before? Tell us about your experience.
“Marketing is very important with pyramid schemes,” said Fisher-French. “There are so many of these (pyramid schemes) out there, but MMM is particularly successful … because of that marketing.
“The more marketing you can get going, the more people you can get involved, the longer the scheme will last,” she said. “The problem is that the longer it last, the more money it’s taking in and the more South Africans it’s affecting.
“The only way the top can get money is if you’re continuously growing the base,” she said. “It’s that volume of growth that keeps the money going up the pyramid.
“Eventually you get to a point where the money requirement is exponential, but now it outgrows itself. There is just not enough people to come into the system or are prepared to enter the system to keep the structure alive and that’s when it collapses.”
