9 April 2024
The National Consumer Commission (NCC) is concerned about an increase in agriculture-related schemes that attempt to lure investors with promises of high profits. Its latest investigation focuses on a scheme promising high returns on virtual pigs.
The commission warns consumers to be cautious when dealing with Piggy Farm Trading, whose activities it is investigating after complaints that it may be a multiplication scheme.
The Consumer Protection Act defines a multiplication scheme as a scheme through which a person promises, offers or guarantees an effective annual interest rate that is at least 20% higher than the repo rate.
According to the commission, Piggy Farm Trading offers potential buyers the opportunity to purchase from the farm, as well as virtual purchases and ownership, on its website and social media platforms. The latter option is facilitated through “digital metaverse farming”.
The commission stated in a release that Piggy Farm Trading claims the latter option is “risk-free” because the company farms on behalf of participants. This includes feeding and insuring the pigs, vaccination and regular cleaning.
According to Piggy Farm Trading, participants can buy between one and 50 pigs a year for R2 200 each. Each pig allegedly yields its owner at least R500 profit per month, an annual profit of R6 000.
“The commission has noted a sharp increase in agricultural schemes like this one, where high returns are promised and participants are enticed to join the schemes. When a consumer buys livestock, they must take possession of it,” the statement says.
The commission advises consumers to be honest in their dealings as relevant legislation prohibits any participation, recruitment, affiliation or promotion of multiplication or any other schemes.
According to the commission, recent trends in pyramid schemes, multiplication schemes and chain letters indicate that owners design their schemes for consumers to invest in while engaging in illegal activities.
The commission reminds consumers of the dangers of joining, promoting or recruiting others for such schemes. “These schemes always collapse, leaving consumers broke.”