The National Consumer Commission (NCC) welcomes the second preservation order granted by the Gauteng Division of the High Court of South Africa (in favour of the National Prosecuting Authority) against Women Against Poverty and Hunger (WAPH), its founder Ms Kelebogile Precious Phumo (also known as Mme Lebo) and 8 other associated persons. The second order for the amount of R3 791, 829 (Three million, seven hundred and ninety-one thousand, eight hundred and twenty-nine Rand) was granted on 30 September 2024 and is held in 14 different bank accounts.
Participants of WAPH, mostly women, were encouraged to deposit money into two bank accounts belonging to WAPH, four bank accounts belonging to its founder and promoters, Ms Kelebogile Precious Phumo, Ms Itumeleng Thai, Ms. Thulisiwe Midrand Mbambo, Ms. Busisiwe Primrose Horacio, Ms Nomsa Mbalati, Ms. Nomakhosi Zwane, Ms. Gugu Cele, Ms. Mpho Patsa Mokoena and Ms Agnes Mofokeng.
The second preservation order comes a few weeks after the High Court granted the NPA the first order of R1,535,040.00 (One million, five hundred and thirty-five thousand Rand and forty cents). This amount is held in three bank accounts belonging to WAPH, and one bank account belonging to its founder and promoter, Ms. Kelebogile Precious Phumo. The total preserved to date is R5 326, 865.00 ( Five million, three hundred and twenty-six thousand, Eight hundred and sixty-five Rand).
The NCC investigated the conduct of WAPH and found that WAPH carried out multiplication and pyramid schemes disguised as grocery stokvel, thus contravening sections 43(2)(a) and 43(4) of the Consumer Protection Act. WAPH conducted a pyramid scheme by encouraging participants to recruit more participants for a reward of R1000 (One thousand Rand). The matter was referred to the NPA’s Asset Forfeiture Unit.
By encouraging participants to recruit more participants for a reward of R1000 and promising unrealistic returns to participants, WAPH operated a pyramid scheme. In this regard, Section 43(4) of the Consumer Protection Act describes a pyramid scheme as “an arrangement, agreement, practice of scheme if participants in the scheme receive compensation derived primarily from their respective recruitment of other persons as participants, rather than from the sale of any goods or services.”
The Consumer Protection Act prohibits any person from directly or indirectly promoting, joining, entering, or participating in pyramids, multiplication, and related schemes.
Furthermore, members of the public were made a once-off payment of R300.00 (Three hundred Rand), for grocery items to the value of R5,310 (Five thousand, three hundred and ten Rand) for twelve months. The scheme offered, promised, or guaranteed unrealistic returns, thus contravening section 43(2)(a) of the CPA.
The Acting Commissioner of the NCC, Mr. Hardin Ratshisusu, said: “We welcome the second preservation order, but are concerned that the promoters appear to be continuing with the scheme. Consumers are reminded that promoting, joining, entering, or participating in these schemes is in contravention of the CPA.”
Issued by: National Consumer Commission (NCC)
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