Common Pyramid Schemes in Kenya: How to Spot Them

File image of Kenyan banknotes held in a hand on January 25, 2020.
File image of Kenyan banknotes held in a hand on January 25, 2020.
Simon Kiragu

Many Kenyans have been swindled in one way or another, with unsuspecting individuals falling for schemes ranging from simple street cons to elaborate thought out schemes.

Investigations by revealed that pyramid schemes were often responsible for large losses, with many falling for the promise of quick financial success in what seems to be, at first glance, a straightforward process.

The schemes span a wide range of fields; including digital, affiliate and network marketing, sales, beauty and cosmetics, finance and investment, entertainment and sports betting.

While cases vary in terms of how they are executed and the amounts lost, a common thread revealed strategies commonly used by scammers.

An aerial view of Kenya's capital, Nairobi.
An aerial view of Kenya's capital, Nairobi.

Due to the dire effect of such schemes on one's pockets and well-being, it is important to be able to tell when you are being swindled.

It is also important to note that some schemes may be genuine, and these tips are only meant to guide you in identifying potential red flags.

Signs of Common Pyramid Schemes in Kenya:

1. You are required to recruit others to earn money. Many Kenyans reported having fallen victim to schemes that promised large payments on the condition that they got others to sign up. Such schemes are often centered around marketing and promotion as opposed to products and services.

In some cases, they received a few small payments inspiring them to put in more money in the schemes before the payments dried up, with substantial explanation rarely offered. Others weren't even as lucky as they received no payments at all after their initial investment.

A common threads in these pyramid schemes was that earnings were pegged on the payments made by new recruits to join organizations in various fields.

2. You are required to pay fees for unnecessary add-ons. Many of the schemes included requirements to pay various fees to maintain membership within the organizations. The payments are often repeated and are sometimes demanded abruptly.

In many instances, the fees required made no business sense but were cast as mandatory contributions to reap maximum benefits from the programs.

3. You are sold on grass to grace stories. Many Kenyans revealed that they had taken part in meetings where smartly-dressed speakers told stories of how they went from unemployment or poorly-paying jobs to make millions in weeks.

These stories are particularly meant to encourage new recruits to officially sign up, a process that includes payment of registration fees.

In many cases, the meetings are held at swanky hotels, part of the efforts to portray a veneer of success.

Social media is also used to heavily promote such schemes, with lavish lifestyles shared as evidence of the schemes' success. It is important to be cautious of such displays, which often include calls to action to join the program.

4. You are asked to sell products of little value. In some instances, pyramid schemes in Kenya involve selling goods and products that aren't quite on demand, such as promotional materials on the scheme itself.

You are required to make a large investment to acquire the items in bulk, and you are promised great returns.

In many cases, these products offloaded to victims of the schemes are used to provide a cover of legitimacy. In most cases, however, they presented nothing more than unsustainable business models.

5. You are forced to buy items you don't need. Many pyramid schemes required members to buy several things to maintain membership.

These organizational items, sometimes branded, are cast as important tools to accomplish your financial goals in line with the scheme. Failing to purchase them, however, results in consequences including being removed from the group.

File image of Kenyans pictured walking in the capital, Nairobi
File image of Kenyans pictured walking in the capital, Nairobi


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