This article is from page 3 of the 2006-01-17 edition of The Clare People. OCR mistakes are to be expected so download the original SWF or the rendered page 3 JPG
DOZENS of Clare people have been duped in a scheme which involves them losing huge amounts of money on the false promise of massive returns.
One Clare mother of two revealed how she invested her childrens’ college fund in the “gifting” pyramid scheme and now holds out no hope of getting it back.
“I can’t believe now that I fell for it,” said the East Clare woman, who asked that her identity not be disclosed.
She told The Clare People that she invested €5,000 which she and her husband “scrimped to save for our children’s college years and now there’s no hope of getting anything out of it.”
The scheme operates through people putting up money which is then paid to earlier investors.
The new investor is also told to recruit two more people to invest. The investors are told they will get their cash back eight fold or more within two months.
But while the few at the top of the pyramid payments scheme stand to make thousands, those who are duped into investing as the scam nears collapse lose everything
The East Clare woman revealed that she was hooked into the get-rich-quick scam by a close friend.
“I don’t believe that she ever intended to do me out of money because she has had nothing back either,” she said.
“She put me in touch with the man who recruited her and he made it sound so foolproof – he said he had made almost €100,000 and that he was reinvesting to make more.
“She and I were convinced that we would get €40,000 back in about eight weeks,” the woman added.
But while the Clare woman’s friend successfully recruited two more investors, she could not convince anyone to put more money up to meet her recruitment clause.
“Our kids are just started in secondary school but we had been putting savings away and we planned to put a decent lump sum in investments once we’d saved enough,” she said.
“I haven’t told my husband that I took the money out for this. I feel so guilty – that was my children’s money.”
The schemes are not covered by laws brought in 1980 which outlaw pyramid selling but Minister of State for Labour Affairs, Tony Kileen said that he will be raising the matter at a meeting with Minister Michael Martin next week.
“This pyramid scheme hits at people who are vulnerable and they can lose serious amounts of money,” he commented.
“It certainly seems that legislation is needed to tackle it.”
And Paul Woulfe of the Citizen’s Advice Bureau in Ennis said that people “should take proper financial advice before they invest big sums of money.
“It is easy to be caught out if you’re not used to dealing with finances.”