Outgoing Minister of Finance, Sigrid Kaag, is concerned about the controversial company IM Academy. The American company has been convicted in Belgium for organizing a pyramid scheme, but can simply go ahead in the Netherlands. In response to publications by Omroep Brabant, MPs from various parties called on the minister to intervene. But despite her concern, the minister is not going to start an investigation. After all, very few people report complaints.
IM Academy presents itself as a training institute. The company offers courses on trading cryptocurrencies and becoming successful on social media. They mainly target young people and give the impression that you can get rich quickly if you join them. In addition to following courses, you can earn money at the company by recruiting new members.
And therein lies the crux. If recruiting new members is more important than the product being sold, in this case the course, it could be a pyramid scheme. And that is forbidden in the Netherlands.
After publications by Omroep Brabant, MPs from BBB, GroenLinks and PvdA, among others, became concerned and sounded the alarm to the minister.
Too few notifications
Minister Kaag now says that she ‘regrets that people may be misled’. But at the same time, she says that the various agencies where you can report as a victim of a pyramid scheme have received almost no reports. She therefore sees no reason to investigate further. According to her, it is up to the supervisors to act if there are ‘unlawfulness’.
There are many authorities to which you could report as a victim of IM Academy’s practices: the Gaming Authority, the Fraudeheldpesk, the Consumer and Market Authority (ACM), the Financial Markets Authority (AFM) or the police.
According to assistant professor Claudia Gross of Radboud University, that is precisely the problem. She has been researching pyramid schemes for years. According to her, there should be one central reporting point, because it is now unclear which agency you should contact as a victim.
Shame
It is not surprising, according to her, that there are few reports to the authorities. “The tricky thing is that many people who have been a member of a pyramid scheme are ashamed. They have also asked their family and friends to join and are therefore both perpetrator and victim.”
According to Gross, the way IM Academy uses network marketing has many characteristics of a pyramid scheme. “It’s very much about recruiting new people and big promises are made to get rich.”
Loopholes of the law
The fact that they are not caught on this is, according to the researcher, because these types of companies deliberately look for loopholes in the law. “The law states that it is a pyramid scheme if it is mainly about recruiting others. We often see that they have a product that is supposed to hide that it is mainly about recruiting people.”
That also makes it very difficult for regulators such as the AFM or ACM to investigate a company like IM Academy. Gross: “They can investigate it, but it will probably fall through the cracks again. It should be a criminal offense if you ask me, but in the current legislation it is very difficult to prove that is the case.”
Omroep Brabant itself became a member of IM Academy and spoke to young people who left the organisation. You can see that in this episode of HOW..?