Public Warning: Protect Yourself from Ponzi and Pyramid and Investment Schemes

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Public Warning: Protect Yourself from Ponzi and Pyramid and Investment Schemes

ENQUIRIES

National Reserve Bank of Tonga
Fasi mo e Afi
Nuku'alofa

(676) 24057

(676) 24201

nrbt@reservebank.to

The National Reserve Bank of Tonga (NRBT) is urging the public to be vigilant against Ponzi and Pyramid-type schemes, which are rising in Tonga and will cause serious financial loss to individuals, families and our communities both in Tonga and overseas. These schemes often disguise themselves as legitimate investment opportunities, savings plans, business ventures, or online trading programs. Many are promoted through social media, messaging apps, community networks, churches, workplaces, and family connections, making them appear trustworthy. Furthermore, early investors sometimes do get payouts to encourage recruitment of more investors. They promise high, fast, and guaranteed returns with little or no risk.

Protect Yourself from Ponzi and Pyramid and Investment Schemes

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What Are Ponzi and Pyramid Schemes?

A Ponzi scheme promises high returns from investments but uses money from new investors to pay earlier investors, instead of generating genuine profits.

A Pyramid scheme requires participants to recruit others or increase contributions to earn commissions or returns, with money flowing upward to a small group at the top.

Both Ponzi and Pyramid schemes are an offence under the Banking Act 2020. They both depend on the constant flow of new participants. When recruitment slows or stops, the scheme inevitably collapses and a lot of people lose their money. A list of reported scams is attached for reference.

Common Warning Signs

Members of the public should be especially cautious if an offer includes:

Promises of high, fast, or guaranteed returns with little or no risk

Pressure to recruit family, friends, church members, or colleagues

Vague or confusing explanations about how money is made

Payments requested in cash, remittance transfers, mobile money, or cryptocurrency

Statements discouraging you from checking with banks or financial authorities

If an opportunity sounds too good to be true, it usually is.

Investment

The public is also advised that investment activities, whereby funds are received from the public to be used for investments or loans at the risk of the person doing such business, are considered banking business. These activities are permitted to be conducted in Tonga only by those who have a banking licence granted by the NRBT under section 7 of the Banking Act 2020.

Report Suspicious Schemes and Unauthorised banking business

Anyone who believes they may have been approached by a Ponzi or pyramid-type scheme or an unauthorized individual or entity conducting banking business, is encouraged to report it to the NRBT or Tonga Police. Early reporting helps protect others and supports enforcement actions. Maintaining trust in the financial system is a shared responsibility. Any person who directly or indirectly initiates, offers, advertises, conducts, finances, manages, supervises or directs ponzi and pyramid schemes commits an offence and is liable upon conviction to a fine not exceeding $1,000,000 or to imprisonment for a term not exceeding 30 years or both .

Below are the types of financial scams that are targeting our people in Tonga and also reported in the region (e.g. New Zealand). This list is not exhaustive.

AG/AGEX/AG Digital Trading/AG Exchange

BG Wealth Sharing

DSJEX

TXEX

SWIFTNET

SWIFT Pay

The Financial Markets Authority of New Zealand has identified a lot of scams in New Zealand and issued warnings on its own website. Often, these scams reach our shores or are being promoted from New Zealand to our people, so we urge the public to remain cautious.

Over 300+ fake investment platforms can be found on their page:
https://www.fma.govt.nz/library/warnings-and-alerts/fake-investment-platforms-2/

Over 50+ fake celebrities scam:
https://www.fma.govt.nz/library/warnings-and-alerts/fake-celebrity-investment-scam/

Over 90+ fake banks related to Romance scams:
https://www.fma.govt.nz/library/warnings-and-alerts/romance-scam/

Recovery Scams: Used to scam people who have lost money in scams. They falsely claim they have recovered the money but need access to personal information and bank accounts. https://www.fma.govt.nz/library/warnings-and-alerts/recovery-scams-using-phishing-tactics/

And many more…

We invite the public to visit the FMA website at https://www/fma.govt.nz/scams/ to learn more about scams that may end up in Tonga.
Note that scams often change their names and return under a different name to promote the same thing. As such, the NRBT urges the public to stay vigilant and look for common warning signs of a scam.

For more information, contact the National Reserve Bank of Tonga on (+676 24057) or email:
This email address is being protected from spambots. You need JavaScript enabled to view it.
| website: http://www.reservebank.to

The National Reserve Bank of Tonga (Reserve Bank) was established on 1 July 1989 as the central bank of Tonga.

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