Bulgarian Company under Fire for Alleged Pyramid Scheme

Save Company International (SCI), a multi-level marketing company based in Bulgaria, was sanctioned by the Commission for Consumer Protection. After a complaint was received, the regulatory body ruled out that the company’s practices fail correspond to safe and acceptable merchant practices.

SCI offers discount cards and business packages that promise passive income to anyone who attracts new customers.

SCI has been under fire on suspicions of pyramid sales activities that are banned by the Bulgarian law. According to experts, the controversy lies in SCI’s business packages, priced between 600 and 3000 Bulgarian leva (approximately 300 to 1500 EUR), that entitle the “business partner” to various rewards for each new client that they attract and for the purchases made by the client within SCI’s partner network. The reward can be as big as a brand new BMW that is leased by the company.

According to the Bulgarian Law for Customer Protection any MLM scheme under which partners are encouraged to recruit other members rather than to sell products and services is considered an illegal trade practice.

Such activities are usually characterized by the recruitment of new network members who have to pay a registration fee in order to participate and to start recruiting other members. Such commercial activities are illegal, thus leading to the sanctions against companies like SCI.

SCI Sanctions and Reactions

After the Commission for Consumer Protection issued its statement, SCI undertook suspicious moves to reorganize and rebrand the company, Capital Daily reported.

According to documents, filed with the Trade Chamber on February 4, the day of the statement, the owners are taking steps to rename the company to Saveway Bulgaria and are transferring their shares to a German company named Saveway International Holding GmbH.

At a general meeting, held at the SCI headquarters the previous day, the company’s owners announced that SCI will be restructured from a sole proprietorship to an LTD company.

Is SCI a Get-Rich-Quick Scheme?

Whether or not SCI is a get-rich-quick scheme is to be confirmed by Bulgarian authorities, but the business model and activity of this company does resemble the model of the famous Ponzi schemes and other similar pyramid schemes that appeared over the years. You can find out more about get rich quick schemes here.
Photo credit: Don Hankins / Foter / CC BY

 

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