Rwanda has cautioned its citizens against trading with WorldVentures, a travel and earn company, over fears that it could be running a pyramid scheme.
In a statement issued on Tuesday, the Rwanda Development Board (RDB) said the company, which has been gaining traction in the country, is illegal and has not been registered as a business entity in accordance with the laws.
“The public is hereby advised to desist from engaging with this company. Anyone dealing with them does so at their own risk,” reads the statement signed by the RDB chief executive Clare Akamanzi.
WorldVentures, a US-based firm operating in 34 markets according to its website, is a home-based direct sales travel club that uses the recruitment model.
A member rises up the ranks and earns commissions in the multi-level travel reward scheme which promises members holiday trips and discounted expenses at their vacation destinations, known as dream trips.
The EastAfrican understands that the company has signed up more than 300 members in Rwanda since the beginning of the year, among them some high-ranking government officials.
But Ms Akamanzi said “some company representatives have been misleading the general public that they have authorisation from Rwanda Development Board and other government entities – a false claim intended to delude the public.”
“Having investigated the business model of this company, it is our conclusion that it possesses characteristics of a pyramid scheme. We want to stress to the public that pyramid schemes are illegal in Rwanda,” she said.
A WorldVentures member in Rwanda, who spoke on condition of anonymity, claimed the rewards are real “you just need to understand how it works.”
“It is not a pyramid scheme.“
People join voluntarily. No one forces them to join. They can exit whenever they want,” the member, who is now at the level of senior representative, said.
He said he has so far earned $400 but is yet to get a dream trip.
“The more people you bring under your line management, the more commissions and dream trips you earn,” he explained, adding that by the end of the year he will acquire his dream trip to Miami, US.
Reached for comment, Martin Ndiho, the WorldVentures International Marketing Director in Uganda, told The EastAfrican that the firm is in the process of registration in Rwanda.
“We have been working on the registration process. We are registered in 37 countries worldwide and five countries in Africa. We are authorised to operate in the US, France, Brazil and many other countries.
Mr Ndiho said that before starting operations in Rwanda, they held an informal meeting with RDB officials to explain its business model. RDB however denies it gave any authorisation.
“WorldVentures is not a Ponzi scheme,” he added.
He said he joined the travel club three years ago and earns about $50,000 a month.
"Right now as I speak, I am in Pretoria, South Africa, on holiday with my family thanks to dream trips,” he told The EastAfrican.
The paper, however, could not independently verify the claims.
RDB's warning follows media reports that some people are quitting their jobs in pursuit of lucrative payouts with some travelling to recruit members in neighbouring Burundi and DR Congo.
WorldVentures has previously ran into trouble in South Africa where it is estimated to have more than 20,000 members. The company was investigated by the government in 2016 for operating a pyramid-style scheme.
In July this year, a South African couple, said to be the top earners in the country, filed a lawsuit claiming the firm had failed to pay commissions amounting to more than $100,000.