• July 19th, 2019
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Peer-to-Peer schemes: If it’s too good to be true it probably is

Business & Finance
Business & Finance

Edgar Brandt Windhoek-The Bank of Namibia (BoN) says it has become aware of the rise of online-based financial schemes, such as Virtual Bank, My Dream and Smart System, and has commenced with the assessment process to determine their legitimacy. Once the assessment process has been completed, the Bank will communicate its position on the matter to the public. Thus far BoN has only pronounced itself on one such scheme, namely MyLifeChange247, which it has deemed illegal and has warned Namibians not to participate in what it calls an ‘unsustainable’ scheme. The emergence of peer-to-peer schemes, also known as pyramid schemes (which are illegal in Namibia) continues unabated and more and more desperate Namibians continue to fall victim to these scammers that are mostly based in South Africa but are recruiting locals to help them do their dirty work. In fact, the scam, which promises ridiculous financial returns, such as a monthly income of N$48,000 from a mere N$100 investment, is nothing new as it has been around for the longest time. The only new aspect is that scammers are now employing technology by creating websites to broaden their reach instead of approaching unsuspecting individuals on the streets. “It should be noted that the Bank has noted an increase in internet-based schemes, which prove to be a challenge in respect of identifying local promoters of such schemes. However, the Bank continues to discharge its responsibility in a pro-active and vigilant manner, in order to take the necessary action as stipulated in the relevant law,” said Kazembire Zemburuka Deputy Director for Corporate Communications at the Bank of Namibia. Zemburuka explained that as standard practice, once the Bank becomes aware of the existence of such a scheme, it conducts an assessment to determine whether such a scheme contravenes the Banking Institutions Act, 1998 as amended. If the outcome of the assessment reveals that the scheme contravenes the Act, the Bank directs such scheme to stop its business operations immediately. The Bank is empowered by the Act to take necessary action including recommending persons that are involved in such schemes for prosecution. “On numerous occasions, the Bank has cautioned members of the public not to participate in such schemes since such schemes expose them to the risk of losing their hard-earned investments and/or criminal prosecution as the case might be,” said Zemburuka. He added that the Bank takes appropriate action against any person who contravenes the Act based on factual information and in line with the law without fear or favour. “As a matter of fact, there is a pending case in the High Court in which persons charged with promoting illegal financial schemes are being prosecuted.” Zemburuka denied allegations that the Bank of Namibia is reluctant to take action because some of its employees or their friends and families make use of these schemes. “These allegations are unfounded, unsubstantiated and with no basis in fact. The Bank has a legal mandate to guard against illegal financial schemes and hence can never compromise that mandate. Should any of its employees be found contravening the provisions of the Act, such employee(s) will be subjected to the appropriate actions in terms of the Act,” he stated. New Era has been inundated with calls and letters since first reporting on the Bank of Namibia’s decision to outlaw MyLifeChange247. One concerned member of the public, who believes that all these schemes could be the work of a regional syndicate, shared a voice note of an alleged creator of MyLifeChange247. New Era was unable to verify the authenticity of the voice note, as the creators are notorious for concealing their real identities. On the WhatApp voice note the alleged scammer relates how the schemes operate: “We had multiple accounts with different users names. Everytime a new person comes in they were allocated to pay someone but it was a few individuals in the scam that the money was going to. Yes, some people were being paid so that it seems true but most of the money was going into our accounts. It was really bad to watch things unfold like that. We were tasked to collect more without paying out anything. Only small amounts were being paid out. It was really bad but it has been nice guys. I just got someone in my inbox from Namibia. My sister said ‘I invested N$20,000’ and I just felt pity for her and I transferred the N$20,000 back to her because she just came on and she was all crying and I have like N$5 million in my account. All the best guys, it was great”. New Era has also learned about a number of local recruiters operating throughout the country. When contacted yesterday one of these recruiters from Swakopmund was quite reluctant to provide information via a voice call, preferring instead to conduct all communication through social media. When asked what returns someone could get for a N$200 ‘investment’, she became agitated, saying, “I don’t know because I don’t invest as little as N$200”.
New Era Reporter
2018-01-18 09:26:31 1 years ago

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