A go to to UpMoney’s web site reveals no specifics concerning the firm’s enterprise mannequin.
As a substitute, potential associates are advised they’ll ‘flip twenty Rands into groceries and R500, each day.’
How?
By recruiting new UpMoney associates who pay R20, who recruit new associates who pay R20 and so forth., and so forth.
Weaved into this are grocery merchandise:
Rendering UpMoney a readily identifiable product-based pyramid scheme.
On the “about us” part of UpMoney’s web site, no firm possession info is supplied.
For that info it’s important to head over to UpMoney’s official YouTube channel. It’s indirectly linked from UpMoney’s web site both.
Or you may flip to media studies calling out UpMoney as a pyramid scheme, courting again to mid final 12 months.
The first video that includes CEO Jude Ignatius Matsimela, was uploaded UpMoney’s official YouTube channel on July twenty second, 2020.
The video reveals Matsimela selling his pyramid scheme as a solution to racism and inequality in South Africa.
Given South Africa’s historical past and the truth that pyramid schemes like UpMoney primarily profit their house owners and some prime recruiters, it is a disgustingly manipulative advertising and marketing pitch.
Matsimela launched UpMoney in February 2020, proper on the cusp of Covid-19 making its mark on the world.
By July, the time of the video add, UpMoney’s financial institution had reported suspicious exercise. The corporate’s promised grocery deliveries had been additionally delayed.
In Matsimela’s personal phrases;
[4:39] It got here as an enormous shock, an unparalleled shock to us, when a couple of month in the past, starting of Could 2020, First Nationwide Financial institution despatched a letter to us … they didn’t need us as a shopper anymore.
Why?
We don’t know. As we’ve not been advised.
Matsimela blames First Nationwide for UpMoney’s subsequent grocery supply delays.
Somewhat than acknowledge the financial institution shut down UpMoney’s account on suspicion of fraud, Matsimelda blames that on racism too.
[7:46] We’ve got the numbers and since there may be energy in unity, we should subsequently unite behind the black agenda of financial emancipation.
We can’t say we’re free and democratic when a big financial institution like FNB has the ability to shut our enterprise down by closing our account.
After which refusing to offer us with any rationalization in any respect.
To be clear, banks freezing accounts on suspicion of fraud is normal observe everywhere in the world.
The rationale shoppers aren’t given a selected purpose when an account is frozen is to keep away from the danger of interfering in a possible investigation by authorities.
Certain sufficient, Lower than two weeks after the UpMoney financial institution video that includes Matsimelda went stay, it was confirmed the Nationwide Shopper Fee was behind the freeze.
Over 230 000 traders within the Up Cash grocery stokvel, that has now been declared a pyramid scheme, have been swindled and financial institution accounts holding greater than R18 million have been frozen by the Nationwide Shopper Fee (NCC).
Performing in tandem with the Asset Forfeiture Unit of the Nationwide Prosecuting Authority and Monetary Intelligence Centre (FIC), the NCC spent the final two weeks investigating Up Cash with a view to shutting it down.
“With a purpose to obtain the promised meat and/or grocery packs, members had been required to pay a one-off becoming a member of payment of R180 and to recruit 5 new members,” mentioned NCC performing commissioner Thezi Mabuza.
A joint-investigation between the NCC and Monetary Intelligence Centre revealed that UpMoney took in R42.7 million between Could 4th and July 2nd, 2020 (~$2.9 million USD).
- R14.5 million was “dissipated by means of level of gross sales purchases at varied retail shops” (assuming that is grocery purchases)
- “a number of the funds” had been despatched to a enterprise account of one other firm, the only director of which is a director of Up Cash (assumed to be Matsimelda however not confirmed)
- an undisclosed quantity was used to buy three luxurious autos; a Hummer, a Jaguar and an Audi TT
Shock shock. The Matsimelda and his buddies had been the prime benefactors of Up2Give.
Versus the R20 quantity cited on UpMoney’s web site, the NCC claimed
(UpMoney) members had been required to pay a one-off becoming a member of payment of R180 and to recruit 5 new members.
As is typical of pyramid schemes, new members made up the bottom of the pyramid and supplied funding for members who had been recruited previous to them and who occupy increased positions within the pyramid.
Two days after that story broke, Matsimelda put out a response video.
[0:34] It brings me pleasure to know that lastly we’re gonna have a possibility to clarify ourselves in entrance of a decide.
You see in entrance of the decide it’s not like every other place.
In court docket issues are scrutinized, questions are requested and when that occurs – the reality about UpMoney goes to return forth.
UpMoney’s case went earlier than the Nationwide Shopper Tribunal … who on March twenty ninth dominated UpMoney was a pyramid scheme.
“Whereas Up Cash promoted their scheme as a “stokvel” to lure members in the course of the pandemic, the Tribunal confirmed that it’s not a stokvel however a pyramid scheme, as their operation suits the outline of a pyramid scheme as supplied beneath Part 43 of the CPA,” mentioned Commerce, Trade and Competitors Deputy Minister, Nomalungelo Gina.
The NCT fined UpMoney R1 million ($68,185 USD). The corporate has twent days as of March twenty ninth to pay the superb.
No phrase on what’s going to occur to UpMoney members frozen funds or Matsimelda’s illegally obtained belongings.
UpMoney took in R42.7 million from round 230,000 members. Sans what was paid out and what Matismelda stored for himself, round R18 million was recovered from the First Nationwide Checking account.
As of but Matismelda hasn’t uploaded one other response video. Which is a disgrace, as I’d love to listen to from him now that he’s had his day in court docket.
Curiously, UpMoney’s web site continues to be lively – though there doesn’t look like any means to enroll.
Alexa visitors evaluation reveals visits to UpMoney’s web site collapsed final August.
Math is math individuals. The vast majority of members in pyramid schemes lose cash to its house owners and prime recruiters.
Pyramid schemes like UpMoney are additionally not going to unravel racism and financial inequality. Anybody who sells you a rip-off is simply trying to benefit from you.