The Crowd1 Catastrophe

From Europe With Loss: Crowd1’s Shady Scheme Has Stung Many Africans

By  |  November 9, 2020

In a world with 7 billion people, it’s pretty much a given that a new unpleasant machination is uncovered every other day. And this highlights the case of one shady European company, Crowd1, which is known to have spread its dodgy deeds across parts of Africa and indeed many other regions across the globe.

At the centre of the story is a six-month-long investigation by the BBC which has exposed the daring pyramid scheme run by Crowd1, which from just the use of smartphones, makes a heap of money from ordinary people across Africa, Asia, and Latin America.

But before digging deep into this investigation and its findings, it could be worthwhile to expound on Crowd1’s profile.

Crowd1, founded in 2019 by Jonas Werner, depicts itself as an online marketing and networking company. On a louder note, it calls itself “the fastest-growing crowd marketing company in the world.”

However, it has been found that those claims are nothing but sugar-coated words, with its real game being just that of the classic pyramid scheme.

The glaring disguise by Crowd1 is not exactly puzzling, as pyramid schemes generally aren’t seen calling themselves one.

This is because, in most countries, a so-called “network marketing business” whose bedrock for making money isn’t on the sale of a genuine product, but rather from recruitment, will be categorized as an illegal pyramid scheme and will be ultimately banned or shut.

Despite the camouflage still, it takes but a short period for people to realize what they truly are. Some extra-smart people, however, almost decode this from the onset.

Pyramid schemes, in general, do nothing but sell “the illusion of riches” to their prospective members. The people at the top of the pyramid are found to be the biggest or even the only gainers, leaving most of those at the middle-to-bottom stranded in losses and a much deeper financial hole than they were from the start.

Crowd1’s modus operandi

At the centre of Crowd1’s operation are promises of how people can get to become a millionaire by promoting and selling a series of exciting digital products to their network. The company calls itself as a multi-level marketing (MLM) Scheme, where you market, sell, and earn.

These promises have successfully convinced thousands and maybe even millions of people across Africa to buy membership into Crowd1.

As is often the case with pyramid schemes, members make money by earning a commission for an additional member brought into the platform. This means that the more members you bring, the more money you earn.

The seemingly most significant part of Crowd1’s product, which is the “educational package”, is what is gotten upon activation of a new membership. The education content guides cuts across topics; from real estate to cryptocurrency trading

Hierarchy also isn’t missing in its scheme as there are five levels of the packages sold to intending members;  The White Level – which is the starter pack, with a membership cost of EUR 99.00 (USD 117.53). Next is the Black level, with a membership cost of EUR 299.00 (USD 354.96).

At the middle point is the Gold level,  with a membership cost of EUR 799.00 (USD 948.53) There’s also the Titanium level – with a cost of EUR 2.49 K (USD 2.9 K). The final and highest level is the Titanium Pro Level, the most expensive and costs EUR 3.99 K (USD 4.74 K).

The bigger the package subscribed to, the more education received. This means that the package at the top is what gives the full education content.

Away from the educational package, members are also said to be presented an opportunity to earn money from acclaimed partnerships the company has with various affiliate companies in the online gaming industry, by getting a range of access to; gambling, gaming, magazines, lotteries, and traveling, all available upon becoming a member.

The emergence of the pandemic may have been greatly tapped into and weaponized by Crowd1. They are known to have hosted online webinars, ultimately to reach prospective members. In its webinars and events, members are told to sign up their families, their Facebook friends, and even church friends.

Also, they are found to engage in sharing videos that feature members living glamorous lifestyles; buying new cars, enjoying luxury holidays, and building lavish new homes. This lifestyle is what is being sold to people, to bring them into the scheme.

In its publicity videos, Crowd 1 claims they are not in the pyramid picture and paints itself solely as an online marketing platform.

“We’re not paid for recruiting,” claims Renze Deelstra, one of their top salesmen. “People join for free. And then based on the education pack, based on the sale, based on a viable, tangible product, people get paid.”

What is the accurate truth then? Do you also wonder? BBC Africa Eye did some digging and unearthed some hidden truths and shady dealings at the centre of Crowd1’s elaborate scheme.

The investigation and findings

BBC Africa Eye led an investigation that has made out Crowd1 to be an elaborate, audacious global pyramid scam. The findings of this six-month-long investigation were recently revealed and highlighted.

The investigation reveals that behind Crowd1’s smooth marketing, the company is spreading a range of ingenuine products and false promises, to cover an outdated pyramid scheme that is solely referral-based.

It is seen that a handful of Europeans who are on the top of the pyramid have been said to have amassed great wealth from Crowd1, and have left nothing but debt and increased poverty in families across various countries including South Africa, Kenya, and Nigeria. This is rather ironic, as the company loudly screams poverty alleviation as its core objective and mission.

To carry out the investigation, BBC claims to have invested in the Titanium membership package to enable further probing of the scheme.

From that sole action, BBC discovered that that, in every case, there were gaps between what was promised and what ended up being delivered, and ultimately that the product isn’t really what they were promoted to be.

First, it was found that the so-called “educational content” for the Titanium package, has only about an hour-long video content. The heavy investment of EUR 2.49 K is revealed to give just a 1-hour long video? This appears to be quite mind-boggling.

As if that’s enough, further investigation showed that most of the educational content was plagiarised from other authors, while other content is materials readily available on the internet. What else would be termed a rip off if not this?

This strikingly proves that even its seemingly significant  “educational package” is quite close to valueless.

Also, it was found that the acclaimed “partnerships” do not exist. In addition, the amount in cash payments likewise promised to the members also ends up not being accurately paid, rather are drastically reduced to a “peanut-like” sum.

Amongst the personal stories covered is Samtos, a young man in Lagos, Nigeria, who says that, when the Covid-19 lockdown hit Nigeria, he was concerned about how to earn an income and was “sweet-talked” into joining Crowd1 by a friend. Samtos told the BBC that the scammers are in Europe “enjoying everything they are gathering from poor people.”

The investigation also revealed a heart-breaking story of a woman in South Africa, named Rosinah, who spent her entire life savings on Crowd1 in the belief that she was buying “shares” in a business that would pay out a regular “salary.”

She was recruited by her pastor, who told Rosinah he was making hundreds of thousands with Crowd1. “The clips they sent us of people getting money, driving Ford Rangers, and driving BMW and Mercedes cars in six months where what got me interested and made me believe,” she said

Furthermore, with her realisation that success in Crowd1 depended on recruiting new members, she ended signing up for her adult children. Despite all her efforts, she claims to have received nothing in return and now accepts that her money is gone.

“My heart is broken, because I wasted all my money that I could have used to buy a house.”, she told the BBC. “Now I am living in a shack, with no money. I don’t have an income or a business. I’m just in disbelief and I am ashamed.”

The verdict

To finally conclude that Crowd1 is nothing but a pyramid scam, the words of BBC Africa Eye’s Ayanda Charlie perfectly captures the scenario.

“How does Crowd1 make their money? Crowd1 claims that it sells an educational product, but most of the time, these guys aren’t even talking about education. They talk about how to sign up new members”

“You’d never hear the word ‘pyramid’ in a Crowd1 event or webinar, but recruiting new people is the only way to make money with Crowd1. For some reason, they don’t like to use the word ‘recruitment’, instead, they prefer to say; ‘share the opportunity’.”

This sheds further light on the evidence that the company clearly offers no retail product.

However, despite the glaring unethical acts unveiled by BBC in its investigation, Crowd1 has so far denied all allegations. In its response, Crowd1 told the BBC that it is not a scam or a pyramid scheme and that it does not break any South African law. 

Crowd1 emphasized that all its products are genuine. In a statement released on their website,

“Much of the BBC’s criticism is based on the fact that they believe that Crowd1 is a scam company that lacks authenticity, without any real or serious products. This is an incorrect perception of Crowd1 as we offer SAfer, Tribute, and LifeTRNDS, among other interesting products, besides our educational packages.”

“Some of our product launches have taken longer than expected and have been postponed, mostly as a result of unfortunate circumstances due to Covid-19.”

What has happened with Crowd1 so far?

Firstly, in September, the Common Market for Eastern and Southern Africa (COMESA), issued a warning cautioning the public that Crowd1 was a pyramid scheme. 

In Kenya likewise, the public was warned against engaging in fraudulent financial schemes by the country’s financial regulators.

For the world in general, the governments in Mauritius, the Philippines, Paraguay, New Zealand, Vietnam, Burundi, Namibia, Gabon, and Ivory Coast have either issued warnings against Crowd1 or have banned it outrightly.

In Namibia, it was banned by the country’s central bank, after being accused of being a pyramid scheme. Also, earlier in the year in Burundi, authorities launched an investigation against crowd-1 and arrested 17 people affiliated with the network.

However, Crowd1 is seen to have been relentless in its further spread and growth. The company is seen to be moving fast and wide, as it is now making headway in Nigeria and India. 

Unless some global authority stops Crowd1, the platform appears to be nowhere near coming to a halt anytime soon.

Featured Image Courtesy: Newsbytes.PH

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