Career women lose thousands at pyramid scheme 'parties'

The noise is deafening. Crammed into the upstairs bar of a pub in north London are more than 100 women and they are all talking at once.

The noise is deafening. Crammed into the upstairs bar of a pub in north London are more than 100 women and they are all talking at once.

Television producers in designer denims are hugging B-list actresses with spray-on tans. Young mothers, clutching baby in one hand and a glass of chardonnay in the other, are air-kissing manicured advertising executives.

This could be an old girls' school reunion but these successful career women are not here to rekindle old friendships. The women are hoping to profit from a scheme which has already plunged others into debt.

The strategy behind Women Empowering Women (WEW) appears risk-free. At these "gift-parties", new recruits hand over £3,000 in cash to secure a heart at the bottom of a pyramid drawn on a piece of paper. The aim is to reach the top and receive £24,000 (see right).

But WEW is doomed to failure – it is simple arithmetic. As more people join the scheme more are needed. But when investors dry up thousands will be left penniless.

"These schemes are absolutely appalling," said Donna Bradshaw, director of Fiona Price & Partners Ltd, a specialist independent financial advisor for women. "The empowerment idea is blinding women to the fact that this is a complete scam. Essentially it comes down to taking money from each other. Whoever gets in first takes the money, and the ones who get in later are left out of pocket."

Pyramid investment is banned in the US but not in the UK because no products or services exchange hands. In Albania, pyramid schemes spiralled so wildly out of control in the 1990s that they brought down the government. When promises of 25 per cent interest per month on savings failed to materialise, mass violence erupted and the nation's economy was brought to its knees.

WEW has attracted numerous complaints since it first surfaced in Britain last summer. There have been stories of crime families infiltrating meetings and fixing the pyramids for their own profit. And there have been death threats to group members from angry husbands whose wives have parted with the family savings.

Yet every night, thousands of women across the country respond to a last-minute phone call to tell them in which hotel, bar or member's home to gather in the hope of walking away with £24,000 stuffed into their handbag.

A lack of new members was the reason for the scheme's collapse on the Isle of Wight. With only 125,000 people on the island, the new investors soon dried up leaving many in debt.

Back at the bar, a dark-haired woman in a sober jacket has hoisted herself onto a table. This is Sandra and she is telling the group about her £24,000 "win".

Her speech is laced with references to women sticking together, being "honest" and offering mutual support.

"If there were men here they'd be knocking each other's blocks off!" This is followed by loud applause and cheering.

"I'm neglecting my job, my four kids... after my first meeting I couldn't eat or sleep. But don't believe all the negative stories – they are just jealous because it pisses off the taxman."