Page last updated at 10:58 GMT, Thursday, 13 November 2008

Colombians riot over pyramid scam


Police use batons and tear gas to control the crowds in the town of Popayan

Thousands of Colombians have taken part in violent protests in several cities to demand the return of money invested in disreputable financial schemes.






Police stand guard outside the offices of the DRFE company in Popoyan
Many savers have lost everything

It is not clear how much money overall may have been scammed but for many individuals it was most of their life savings.

"Everybody was full of hope for December, for the holidays. The people thought their lives would change," one man who said he had lost the equivalent of $1,500 told AFP in Popoyan.


"I mortgaged my house, invested all my savings," he said.


"It's so uncertain, we've heard the company's bankrupt, we don't know what's happened."


Angry investors in several regions ransacked DRFE offices and clashed with police sent to restore order.

In the city of Pasto, in the department of Narino, local television showed depositors looting local businesses.

Colombian Vice-President Francisco Santos
Colombia's vice-president told investors nothing was free in this world

In Popayan, police fired tear gas to disperse people trying to break into the investment company's office to recover their money.

The people behind a pyramid scheme in Santander de Quilichao disappeared, leaving a note stuck to the doors taunting the investors for having been duped.

It said: "Now for being stupid and believing in witchcraft you will have to work much harder to recoup the money you gave us."

The office of another pyramid scheme had a greetings card stuck on the door which read: "We wish you a sad Christmas and a shameful New Year."

Investigations into such schemes have been under way for several months but Colombian President Alvaro Uribe called for intensified action against companies suspected of defrauding people.

He has also urged Congress to pass stiffer laws to increase the penalties for investment scams.

Vice-President Francisco Santos warned people to avoid pyramid schemes.

"When someone promises to double your money in six months they are trying to trick you," he said. "Nothing is free in this world and that is not going to change."

A number of bogus companies have vanished in recent months after promising depositors interest rates as high as 150%.

Our correspondent says some of the schemes have actually paid out money to investors to launder drug profits.

Pyramid investment schemes are said to be often more popular than regular savings accounts in Colombian banks, which charge high fees.

Print Sponsor

Country profile: Colombia
19 Jul 08 |  Country profiles

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation



Americas Africa Europe Middle East South Asia Asia Pacific