Success University offers online courses on topics such as relationships, financial success, health and physical wellbeing, spiritual growth, sales and marketing.

In addition, it pays students in US dollars for recruiting new students to the programme, and has been making extravagant claims, with advertisements promising incomes of as much as US$40 000 a month.

Pyramid schemes take many forms, but with the overarching characteristic of promising consumers or investors large profits based primarily on recruiting others to join their programme, instead of on profits from any real investment or real sale of goods to the public.

At some point, the pyramid becomes too large to sustain itself and collapses, with those at the bottom losing the most money.

Making losses is inherent in these structures, with the majority of participants - estimated at 88 per cent - losing out at the end of the day while only those at the top reap any real benefits.

The idea behind pyramid schemes is that only one payment is made by the individual, but with the promise of exponential benefits as a reward, through the recruitment of others who undergo the same process.

In the case of Success University, the selling point is that "when person A joins their scheme (with an enrolment fee set at US$50 according to the programme's website) and recruits two more people who in turn recruit their friends, then person A qualifies to earn US$500", the central bank says.

"Recruits are also promised compensation plans like enrolment bonuses or direct income, unlimited indirect bonuses, weekly income, and monthly income, all based on the recruitment of new people."

According to the Bank of Namibia, all the features of Success University constitute those of a pyramid scheme, as its focus lies on recruiting people rather than selling a product.

In accordance with the Banking Institutions Act of 1998, it is therefore illegal.

Section 5 of this Act "prohibits illegal banking business, which can simply be defined as the taking of deposits from the public without being authorised by the Bank of Namibia, the supervisory authority for banking institutions in the country."

A violation of this section can carry a fine of N$500 000 or five years' imprisonment, or N$1 million or ten years' imprisonment, or both the fine and imprisonment, depending on the seriousness of the offence.

The bank is appealing to people to report such activities immediately if they become aware of them.

These illegal activities may be reported to the BoN at tel: (061) 283 5005 or email: info@bon.com.na.

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