TTPS Seizes, Then Returns $21M in 'Sou-Sou' Scheme: The Debate Over Legitimate Savings Circles
The Trinidad and Tobago Police Service (TTPS) recently seized over 21 million Trinidad and Tobago dollars (around 3 million US dollars) from an alleged illegal pyramid scheme, which had been masquerading as a sou-sou, a cooperative savings system. Nine individuals were arrested in connection with the scheme. However, in an unusual turn of events, the seized money was later returned to the scheme's administrators without higher authorities' knowledge.
The incident has sparked a debate about the distinction between legitimate sou-sou circles and illegal pyramid schemes. The latter often adopt the name of sou-sou to gain trust but lack the key characteristics of authentic sou-sou systems. Rubadiri Victor, an advocate for the recognition of sou-sou, clarified that a genuine sou-sou is a traditional African-derived savings and pooling system with a fixed set of participants and no intention to exploit members.
The confusion around the term sou-sou has led to calls for regulation. Rubadiri Victor and Attillah Springer have both suggested registering authentic sou-sou circles to prevent their corruption and demonization. The Institut de Recherches et d’Actions sur les Pratiques d’Epargne Solidaires (IRAPES), founded in 2004, has been advocating for the registration of authentic sou-sou circles. However, some social media users argue that sou-sou has played a crucial role in the economic development of historically disenfranchised communities in Trinidad and Tobago.
The Trinidad and Tobago Securities and Exchange Commission (TTSEC), the Central Bank, and the Financial Intelligence Unit (FIU) have issued a joint statement warning of pyramid schemes masquerading as sou-sou arrangements. This follows a similar warning in December 2019 when the Central Bank demonetised the country's existing $100 bill, leading people to trade in their old currency, but sou-sou money was not accepted as legitimate by banks.
The recent seizure and subsequent return of funds from the alleged pyramid scheme have highlighted the need for clear distinction between legitimate sou-sou circles and illegal financial rackets. As the debate continues, authorities and advocates alike call for regulation and education to protect the integrity of sou-sou systems and the communities they serve.
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