The Business Practices Committee (the Committee) (1) recently investigated two entities that were involved in what could be termed "controlled" chain letters (2). These entities were closed down by the Minister of Trade and Industry (the Minister). There are many variations of chain letters. Ordinary chain letters invariably operate as follows: A person receives a letter by post and is asked not to break the chain and to send a sum of money to the names on the list. The participant then sends off the money, adds his name to the bottom of the list, deletes the name at the top and makes a number of copies, depending on the number of names on the list. These copies are then sent to other persons, and if they participate, the cycle repeats itself. These chain letters are usually not very profitable for the promoters, because there is no way to monitor whether a new participant has forwarded monies to the names on the list.

In a variation of the ordinary chain letter the promoter ensures that his/her name stays on the list and payments by new participants to preceding participants are controlled. Example of such chain letters were operated by entities called Dunamus CC and Itereleng. The detail of these scheme is set out in the Committee's Report No 60: Dunamus Marketing CC and Others and Report No 62: AJ van Rensburg & Associates CC, also known as JvR & Associates CC, trading as Itereleng (3).