Authorities are warning aspirant farmers to be weary of agricultural scams disguised as investment opportunities which are said to be on the rise.
The latest to be investigated by the National Consumer Commission is a company selling virtual pigs which the regulator says is offering unrealistic profits and operates unlawfully.
According to the commission, the Piggy Trading Farm is offering profits of up to six thousand rand per year which it is says are way above the repo rate and therefore unlawful.
Piggy Trading Farm targets people interested in agriculture as a business but not the day-to-day management of livestock and offers them profits of up to five hundred rand a month for every pig bought virtually which the National Consumer Commission said it’s a pie in the sky which even if delivered, would be illegal.
“According to Piggy Farm Trading, participants can purchase between one and 50 pigs per annum at R2200 per pig. Each pig gives its owner a minimum of R500 per month over a year, as profit.
“Essentially, a participant pockets R6000 of profit, per annum. The Consumer Protection Act (CPA) describes a multiplication scheme as a scheme that promises or guarantees participants an effective annual interest rate, as calculated in the prescribed manner that is at least 20% above the repo rate,” said the National Consumer Commission in a statement issued by its spokesperson Pheto Ntaba.
“The Commission warns consumers to exercise caution when dealing with this entity. The NCC’s Acting Commission said.
“Consumers must be honest with their dealings as the CPA prohibits any participation, recruitment, joining or promoting a multiplication scheme and other schemes,” said the commission.
The commission warned would be investors that they may be scammed also indicating that such schemes are on the rise.
“The NCC has noticed a spike in agricultural schemes like this one, which lure participants into joining the scheme and promise high returns. If a consumer buys livestock, they should be able to take possession of that livestock. The latest trends of pyramid schemes, multiplication schemes, and chain letters indicate that the owners have designed these schemes to buy into the idea of “investing” while they (consumers) are participating in prohibited conduct. Consumers are reminded of the dangers of joining, promoting, and recruiting others into such schemes. These schemes always collapse and leave consumers out of pocket,” 1the commission added.