Participant receiving a sou-sou hand.

The term pyramid scheme has been thrown around a lot recently by almost everyone–from the Commissioner of Police to the ordinary man on the street.

Since the COVID-19 pandemic forced the closure of multiple sectors of the economy, starting in late March, many people have found themselves on the breadline, desperate for money to support their families.

Several months ago, groups began springing up both in Trinidad and Tobago, promising potential members that if they invested between $300 to $15,000, they could see their investment multiply by eight times in most cases. The caveat: Bring in two other people to invest.

In the most recent case involving a group in La Horquetta called DSS “Drugs Sou Sou”, where police seized $22 million, the group admins showed multiple diagrams and videos explaining the “levels” of the investments and encouraged members to download the app Telegram so the size restriction of WhatsApp groups would not apply. The groups grew in popularity and were called everything from “Each one, help one,” to “Blessings Circle,” to “Blessing Flower,” to “Hybrid Sou Sou” and many more.

Within weeks, many of these groups crashed, for the simple reason that these types of structures are not sustainable. Regardless of the name or title of these groups, they are nothing more than naked pyramid schemes.

Defining the pyramid scheme

According to HowStuffWorks.com, a naked pyramid scheme is where people invest money and make several times the amount without doing anything.

For example, one person can invite ten people to join an investment opportunity. “The ten recruits each pay the recruiter $100. The recruiter now tells them to go out and recruit ten more people to do the same. If each recruit is successful, they’ll all end up with $900 in profit from a $100 investment,” HowStuffWorks says.

In local groups, the $100 fee in this example refers to the “admin fee.”

But as HowStuffWorks points out, the problem is the constant need for new investors to pay the older investors.

“Eventually, there won’t be enough recruits at the bottom of the pyramid to support the level above it. That’s when the pyramid topples, and everyone at the bottom loses their investment,” HowStuffWorks says.

Even as these local groups fail, more pop up daily. Admins have now turned to the Facebook Marketplace hoping to woo new ‘investors’.

By Friday night, a petition was started on Change.Org in support of DSS. Two hours after it was created, it had already gathered 1,500 signatures.

In support of the sou-sou

But for every voice in support of DSS’ operations, which the commissioner has labelled a pyramid scheme, there have been ten more speaking out in defence of the traditional sou-sou.

The Oxford Dictionary defines a traditional sou-sou as “a cooperative savings system in which each person contributes the same fixed amount each week, and the whole amount is taken by a different member each time.”

The traditional sou-sou, an informal savings arrangement among friends and close associates, has been a feature of the Caribbean society for decades. However, sou-sou funds are not accepted as a source of income by the banking institution in T&T.

A tradition for 25 years

The Sunday Guardian spoke to one woman who has carried on the tradition for over 25 years.

Seeta (*not her real name) has been running a traditional sou-sou for close to three decades.

At her home in central Trinidad, Seeta told the Sunday Guardian that she got into a sou-sou because as a single, self-employed mother, she was turned down multiple times for bank loans.

“The bank wanted me to have a normal job, I didn’t have that and I didn’t have collateral so every time I went for a loan, they used to say no,” she recalled.

She said she was in her late 40s when she decided to pull on the knowledge and experience of her uncles who did sou-sous when she was a child in Cunupia.

“I asked some of my family and some friends if they wanted to join and that is how we started,” she said.

Now 75, Seeta enjoys every comfort in her home–including a swimming pool, a luxury she could barely imagine as a vendor and single mother with no formal education.

When she first started her sou-sou, members paid $100 ‘a hand’ a week. That increased over the years and got as high as $400 ‘a hand’.

“I take my sou-sou hands and do plenty of things in my house, build my own pool and fix my place properly. I teach my children and grandchildren the same thing, so they also throw hands and build their homes, buy cars and some even pay for their own weddings.”

She is proud to have carried on this tradition handed down from her relatives and her only regret is not starting her own sou-sou earlier on in life.

Unlike the “admins” of the pyramid schemes that are now disguised as sou-sous, Seeta said her fee for keeping the money and running the sou-sou was a mere $50 a week.

“Every week, when one person collecting their hand, I would take out $50 from that hand for myself. I never take out from everybody when they pay their hand, just one $50 a week from the hand that I was giving out.”

The biggest sou-sou she did was a $14,000-a-week payout, which ran for an entire year.

The victim of a home invasion several years ago, Seeta said a masked, armed man broke into her home and threatened to kill her for the sou-sou money.

The man took off with about $5,000 which she had to replace herself to pay out the hand that was due that week.

Once several years ago, Seeta was also conned out of a sou-sou hand by a workman who was doing construction at her home. She said the man begged to join the sou-sou so he could purchase a car. When he was given a hand just weeks into the sou-sou, the man stopped paying and Seeta was left to foot the bill.

These are some of the risks one faces when running the sou-sou, which depends on the honesty and goodwill of the people involved.

But even with those difficult experiences, Seeta does not regret her decision to start her own sou-sou.

If she does decide to continue her sou-sou, Seeta said she will be very selective about those she allows to join.

Seeta has been following the stories of the crashed pyramid schemes that have emerged over the past few months advises anyone thinking of joining groups that promise a quick multiplication of your money: “Don’t do it.”

“Choose carefully who you invest with…You should do it if it’s a real one, but join with people and take people who you trust, you can’t take each and everybody, it has to be people you trust,” she said.

‘Sou-sou helped me build my own home’

Single mother Camille says several years ago when she got divorced, she turned to the bank seeking a loan or a mortgage to start her own home.

However, since she was employed as a contract worker and did not have permanent employment, Camille’s request was turned down.

“They are basically saying if you have a contract, which most people have, then you can only get a loan based on that, it is a lot of run around, a lot of headache,” Camille said in an interview with Guardian Media.

She said she turned to a sou-sou. After three years, she has been able to complete major construction on her home, doing it in several stages.

“The sou-sou ran for probably about three years and every time I got my hand, I built, I built a bit of the house, and I will continue to do that once a sou-sou comes up. I will join and when I collect my hand, I will build a bit of the house and know that I don’t have to pay these exorbitant fees to the bank.”

Camille said she will continue participating in sou-sous in its traditional form.

“I think it is a legitimate form of support, it’s not a loan, you’re in a system based on trust and it is legitimate and it has a history, so I totally believe in it, especially for women.”