Report 69 Business Practices Committee8. The letter from Venter dated 18 January 1999 |
On 18 January 1999 the Committee received the following letter from Venter:
"In response to our meeting held on 14 January, 1999
It was clearly established, at the above meeting, that the committee was not too concerned with the benefits available to members of ICSA, but rather with the method used to promote membership, i.e. new recruits are obliged to introduce at least 7 (seven) more members in order to benefit, in any way.
ICSA have taken cognisance of this aspect of its business. It was further emphasized at the above meeting that this very aspect - then described by a certain committee member as "head hunting" - categorises ICSA as a "pyramid" scheme.
ICSA acknowledges this very concern of the committee, that if any individual, who joins the Inner Circle, do not introduce more members, then such individual will not benefit financially from participation in the ICSA Stokvel Program. After the above meeting we understand that this is the committees' MAIN CONCERN. (If we still misunderstand, please advise?)
ICSA have thus adapted our "method used to promote membership". From 18 January 1999, newly recruited members will no longer be required to introduce more members in order to benefit from our Stokvel program. We have also agreed to simply operate a Stokvel - true to the Stokvel tradition in SA. Thus, we will administer the poolmoneys and payment of such poolmoneys will be effected monthly, poolmoneys will be deposited directly into the personal banking accounts of participants.
ICSA will introduce new members themselves. ICSA will develop into a marketing-house, thus the advantage that no member/participant will have to introduce other people/members/participants themselves in order to benefit financially from our Stokvel program.
We attach our adapted Stokvel Certificate and/or application form.
The adapted method - what does the new member receive?
Since the new member now has to do NOTHING in order to benefit financially from our Stokvel Program, ICSA will simply issue a guarantee certificate (agreement) which states that if the member do not receive at least 10 times their original poolmoneys (we are thus also moving away from the R1 million in 1 year aspect), deposited directly into his/her banking account, within 1 year after entrance, then ICSA will be ready to refund double their total startup costs. ICSA will also provide the new member with a Constitution.
We are willing and prepared to attend a 3rd meeting, if the committee should so wish, in order for us to illustrate/demonstrate/communicate the above modifications.
We sincerely hope that these modifications meets with your approval.
Yours Faithfully
CF Venter
Chairman".
The "... adapted Stokvel Certificate and/or application form" are reproduced on the following two pages.
Venter's statement that "... the committee was not too concerned with the benefits available to members of ICSA, but rather with the method used to promote membership" was a clear indication that he did not understand the basic problem the Committee had with his scheme. The moneys "earned" by the fortunate small minority in Venter's scheme will be equal to the moneys lost by the unfortunate large majority.
The further statement that "... We have also agreed to simply operate a Stokvel - true to the Stokvel tradition in SA" also shows that Venter and his associates do not understand the "Stokvel tradition in SA". A genuine stokfel does not consist of hundreds of people. The participants in a stokfel comprises a small social unit of people who know each other and who can impose the obligations of the individual stokfel members.
First page of the "Stokvel Certificate and/or application form"
The Inner Circle SA
10 Rothchild Avenue, Lindhaven, Roodepoort, 1724
Tel. (011) 760-6502
Welcome to The Inner Circle SA
The Inner Circle SA (ICSA) is a dynamic Stokvel Corporation.
ICSA offers you a unique opportunity to supplement your income & to excel financially through your voluntary participation in the ICSA Stokvel Program.
HOW to become a member - basic INSTRUCTIONS: -
- How to supplement your monthly income in 5 easy steps -
| 1) | Enter your name & required details on the membership application section of your certificate and pay your entry costs of R150-00 to the person who introduced you. Such entry costs comprise of the moneys payable in (2.) and (3.) below. |
| 2) | Pay your stokvel poolmoneys of R43-74. Such poolmoneys are payable as a gift towards prosperity to each of the six members (group status 2 - 7), appearing on your ICSA Stokvel List, on the back of this certificate and comprise of a deposit of R7-29 into each of these accounts. Your introducer is obliged to deposit such poolmoneys directly into the ICSA account, group status 1 on your stokvel list. ICSA will then deposit such poolmoneys, on your behalf, into each of these six accounts, on the last Thursday of every month. |
| 3) | Pay your program marketing and management fee of R106-26, which entitles you to be taken up into an ICSA Stokvel Group, with your name and account details in position no. 7 on seven stokvel lists. |
| 4) | The person who introduced you shall then post or deliver your completed membership application form, together with the above deposit slip and a copy of the cash receipt issued for your entry costs received, in (1.) above, to: The Inner Circle SA, Admin Office, P.O. Box 3487 Florida 1710. |
| 5) | ICSA will then introduce a minimum of seven more members who will be taken up into your Stokfel Group ... that is all! The more people ICSA introduce, on your behalf, the higher will be your Stokfel poolmoney returns. |
Second page of the "Stokvel Certificate and/or application form"
Insert Page??
Although Venter stated that "... we are thus also moving away from the R1 million in 1 year aspect", the second page of the "Stokvel Certificate and/or application form" still shows that R1 000 596.20 could be earned per "Stokfel Cycle". The "5 easy steps" set out on the first page of the "Stokvel Certificate and/or application form" would confuse most prospective members.
The only "amendment" to the scheme was that ICSA would now canvass new members and not the individual members themselves. This subterfuge does not change the harmful aspects of the scheme to participants.