Beware of MLM Scheme Promising Quick Earnings: Financial Services Commission Warns Barbadians

The Financial Services Commission (FSC) on Monday issued an urgent warning about investing in multi-level marketing (MLM) schemes, as a scheme masquerading as a YouTube and TikTok partnership actively recruits Barbadians with promises of quick earnings.

The scheme requires participants to initially engage in a three-day probationary period after clicking a provided link, with recruiters promising earnings of $2.50 per day for clicking five times in designated spaces.

Prospective members are then encouraged to visit the St Michael office of the business and pay approximately $700 to advance to “level two”, which involves making 10 online clicks for promised earnings of US$10 ($20) daily or US$300 ($600) monthly.

While the FSC has not publicly named the company involved, it cautioned that such MLM schemes, though presenting themselves as legitimate business opportunities, can be “risky or even illegal, leading to significant financial losses”.

The regulator has therefore provided Barbadians with key points to consider before making any investments.

People are urged to research the company or individuals involved. “Thoroughly investigate the background, business model, and reputation of any of the companies or persons involved. Verify whether the company or persons associated with the investment are registered and regulated by relevant authorities like the Financial Services Commission,” the commission cautioned.

Understanding the business model is also crucial. “Genuine businesses generate revenue primarily through the sale of products or services, not recruitment of participants. Be wary of models that emphasise recruitment over product sales,” the regulator advised.

Barbadians are further encouraged to watch for red flags such as promises of high returns with little effort, a strong focus on recruiting others, or pressure to make large upfront investments.

The FSC also advises consulting with experts. Residents are encouraged to seek advice aligned with their financial goals and capacity from regulated individuals or companies that are authorised to provide such guidance.

The public is further urged to approach all investment opportunities with caution and conduct due diligence to safeguard their financial well-being.

The FSC has reminded the public that it is an offence for unregistered or unlicensed persons to offer investment advice, sell financial products, or deal in securities.