They come and go, lie low for a season and then come back again; investment schemes that promise rates of return way above money market rates. While conventional rates are per annum, they promise returns at rates per month, per quarter etc. You get to double your money in a year or less. You make more money when you bring in more people. If it sounds too good to be true, it usually is.
It keeps coming back like a bad coin, in different names and guises but the same thing – ponzi or pyramid schemes. The modus operandi is the same. You pay money to join, make more money as you recruit more people.
There is no underlying business generating the cash flow. Income is basically from fees collected from new recruits. This is used to pay ‘investors’ whose investment is mature for payment. So long as enough money comes in to cover payments due, the party goes on. As each person is paid, he becomes an evangelist and goes to town to tell friends, family and foes. People who ordinarily wouldn’t reach out to friends or neighbours readily go on evangelism to grow their down line. As the word goes round, new hopefuls rush in to have a piece of the action. A time comes when the word has gone round and anyone interested in such a scheme has subscribed. That becomes the tipping point. The wave of new recruits starts to die down. Cash flow slows down, making payments a challenge. The main actors close shop and vanish into thin air, looking for another location to fool gullible folks.
Same old tricks
Schemes like these are not new. They come and go. I remember my early years in the university. Then it was bonds. You are recruited by a class mate or roommate. When you sign up, you are given one card with three names on it, with the name of your recruiter at the bottom. During processing of your membership application, your fee is broken into three parts, one goes to the company, one goes to the number one name on the card and one goes to the person who recruited you. You are then given three cards with your name at the bottom while other names move up (since the top name has been paid out). You are to go win more ‘souls’. Sign up three fellow students and in the process recover your membership fee, and wait till your name gets to the top to reap a bonanza.
Same old tricks
Schemes like these are not new. They come and go. I remember my early years in the university. Then it was bonds. You are recruited by a class mate or roommate. When you sign up, you are given one card with three names on it, with the name of your recruiter at the bottom. During processing of your membership application, your fee is broken into three parts, one goes to the company, one goes to the number one name on the card and one goes to the person who recruited you. You are then given three cards with your name at the bottom while other names move up (since the top name has been paid out). You are to go win more ‘souls’. Sign up three fellow students and in the process recover your membership fee, and wait till your name gets to the top to reap a bonanza.
By the time your name is on the top, it will be on 3 x 3 x 3 (27) cards. For a student, that was a good pay day. The problem was, only those that went in early witnessed the bonanza. Those who got evangelised later arrived late at the party. Most of the people you try to talk to have either subscribed, or heard of it and want to have nothing to do with it. By the time the dust settled, I ended up with three useless cards. I learned my lessons since then.
Many variations have come and gone since then. Some transformed into wonder banks with glittering offices. I remember 2007 as if it was yesterday. One such wonder bank was at its peak. In the office I worked then, the place will turn into a ghost town during lunch time as most employees have gone to this wonder bank to invest, take others to invest or collect their money. Their operations were more polished. Deposit some money and get up to 40 per cent returns in less than six months. A few brave souls tried it out and found it to be true. They went on evangelism and recruited more colleagues and neighbours.
Many variations have come and gone since then. Some transformed into wonder banks with glittering offices. I remember 2007 as if it was yesterday. One such wonder bank was at its peak. In the office I worked then, the place will turn into a ghost town during lunch time as most employees have gone to this wonder bank to invest, take others to invest or collect their money. Their operations were more polished. Deposit some money and get up to 40 per cent returns in less than six months. A few brave souls tried it out and found it to be true. They went on evangelism and recruited more colleagues and neighbours.
I remember one close friend came to evangelise me. I asked him what business the company did to make such money and such handsome payouts. He told me that they took money from the public to invest in downstream petroleum marketing and other such businesses that yield high returns. I then asked which businessman would take money at more than 80 per cent per annum to do business when he can get a loan at less than 35 per cent per annum from the bank. He told me that the company wants to help people by using their money to invest and sharing profit with them. I did not buy that. I was not surprised when the CBN closed down that wonder bank and returned depositors money.
- Usiere Uko
- Usiere Uko
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