Remember Telexfree and other similar Ponzi schemes that became popular and several Ugandans lost millions of shilling way back 2014? There is a new Gifting pyramid scheme on the block that has rocked Ugandans online who have become interested and are investing big time. But is it a scam or legit?
Before we look at how this Ponzi scheme works, lets understand what a pyramid scheme is. It is basically a business structure that pays more for recruiting new members or distributors than it does for selling actual product. Each of these new members usually pay an entrance fee, which is used to pay the people above them. In the end forming what is termed as a Pyramid. These should not be confused with Multi-level marketing companies (MLMs) as they are legitimate businesses with the goal of moving products to consumers.
How the gifting process works
At some point this gifting program promises new entrants who gift UGX 200,000 to earn over UGX 2,000,000 in a week or less. The payments are done via mobile money and other payment apps and communications are mainly done via Telegram messaging app. Pyramid starts by making several groups of people form what they call boards made up of at least 12 gifters. The board will then split into 4 this means one collects UGX 400,000 from each board that fills from your main board. Lets explain step by step.
Round 0: You gift UGX 200,000 to a member on the center, and you become a center member.
Round 1: You are a center member. You and your team invite 12 like-minded members, to fill your board. You are gifted UGX 400,000 from members outside the center. Your board then splits into 4 different semi boards.
Round 2: The four boards that split from yours close and you are gifted UGX 400,000 from each of the four boards, and that it.
In total, you receive UGX 2,000,000 (UGX 400,000 from round 1 , plus UGX 400,000 from each board from your splits in round 2). The cycle continues for those who want to re-gift.
If all this sounds to good to be true its because it is, just like all rules that govern pyramid schemes –this gifting program is no exception. First of all, you must be good at convincing others to join and assure them they are making the right investment, and also the first ones in on the scheme gain big until unlike those at the bottom of the pyramid (new board entrants) until the bubble bursts at some point in the future.
There is no doubt that Ugandans like quick money and many have been lured by popular Snapchat and Instagram influencers to join keeping the telegram app busy buzzing with board messages as they gift each other endlessly.
Gifting Clubs are not new in the USA, these clubs are already classified as illegal pyramid schemes where new club members typically give cash “gifts” to the highest ranking members. If you get more people to join, they promise you will rise to the highest level and receive a gift much larger than your original investment. But only a few people profit from this scheme and most people lose their investment.
Organizers keep creating new names for gifting clubs, such as “Friends Helping Friends,” “Women Empowering Women,” “Airplane,” and “Pit Stop,” but these clubs all work the same way and are all illegal. If someone asks you to join a gifting club, don’t fall for their high-pressure sales tactics or stories of great earnings and Ugandans should take a lesson from the past mistakes there is no easy way to earn money you have to work for it.
