Thousands of people, among them civil servants and vendors, have lost thousands of dollars to fraudulent online pyramid scheme, MMM Global Zimbabwe, after it collapsed recently. Unconfirmed report from online media obtained by New Telegraph noted that the social financial network, which relied on an accelerating number of new members to pay off the old, abruptly terminated its services last week, leaving participants stranded. This comes as Econet’s mobile financial service platform, EcoCash, yesterday distanced itself from the pyramid scheme. Participants claimed they were using EcoCash for their transactions.
Zimbabweans and Nigerians have, in the past months been joining the online investment scheme in droves in a bid “to get rich quickly.” The Reserve Bank of Zimbabwe warned people that the scheme was fraudulent and there was no legal recourse in the event they lost their money.
The central bank said MMM, which advertises its operations through a website and recruiting agents, was not a registered or regulated entity. EcoCash yesterday said: “We have noted that some of these pyramid schemes are allegedly advertising in a manner that suggests that the Ecocash facility is a medium for prospective members to deposit their money.
This is not correct. “We advise our valued customers and all stakeholders that Ecocash is a licensed mobile payment platform that enables customers to make financial transactions such as sending money, buying prepaid airtime as well as paying for goods and services within the confines of the law of Zimbabwe. EcoCash promotes safe and legal transactions but will not be held liable for any losses arising from the use of EcoCash to engage in illegal activities such as Ponzi schemes.”
The Nigerian Securities and Exchange Commission (SEC) had also cautioned investing public on the activities of illegal capital market operators in the country. SEC in a notice obtained by this newspaper said its attention had been drawn to the activities of an online investment scheme tagged ‘MMM Federal Republic of Nigeria (nigeria.mmm.net).
The apex market regulator said the platform has embarked on an aggressive online media campaign to lure the investing public to participate in what it called ‘mutual aid financial network’ with a monthly investment return of 30 per cent.
“The Commission hereby notifies the investing public that the operation of this investment scheme has no tangible business model hence it’s a PONZI SCHEME where returns are paid from other people’s invested sum. Also, the Commission does not register its operation.
“The general public is hereby advised to distance themselves from this online scheme. Please note that anyone that subscribe to this illegal activity does so at his/her own risk,” SEC noted.
The scheme advertises itself as a mutual aid fund under, which recruited members contribute money to assist others and are promised investment returns of 30 per cent per month. Some of the people left counting their losses told The Herald that they received emails that the scheme had been suspended until September 15. “All along things were moving in the right direction and we now have nowhere to claim our investments,” said Mr Tinashe Muza of Harare.
“When we started putting our funds in the scheme one could get assistance within seven days but things later changed to 14 days and when we were shut out the waiting period was 21 days. What it simply means is that the number of people in need of help has outnumbered the number of people joining. Right now we have nowhere to get our money which we invested.”