Public warned of new pyramid scheme trading as a gift club on social media
The Capital Markets Authority (CMA) has cautioned the public to beware of a pyramid scheme that is operating on social media as a gift club.
According to the CMA communications and public education officer, Samuel Sanya, the new Ponzi scheme trading mainly on social media promised prospective investors gifts worth shs2 million which is 10 times their initial contribution of shs200,000 in a few hours or in less than a week.
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“The money is mostly being wired through mobile money. Information so far received also indicates that mobilization of new members is being done via Snapchat and Telegram internet applications and through Instagram influencers to form groups of four,” Sanya said.
“The applications then buzz with board messages to encourage the new members to gift their savings to older members and to recruit additional members.”
He warned that the so called gift club is simply a fancy name for the old pyramid schemes that take money from newcomers and gift it to those that joined before them.
“Inevitably, there comes a time when there are no new members and the scheme collapses leaving many newcomers in ruin.”
“These pyramid schemes do not have an underlying service or product and they do not create any new wealth. I urge all Ugandans to reject and report such schemes,” he added.
The Capital Markets Authority urged the public to only deal with persons licenced and approved when receiving financial advice and investing in securities including shares, bonds, derivatives, commodities, unit trusts or collective investment schemes and, other financial instruments as provided for in the CMA Act.
A number of Ugandans have in the past lost huge sums of money to pyramid or Ponzi schemes that have existed in the country.
Ponzi schemes like the World Global Mobile Network, Telex Free, Adfast Inc, World Ventures, Viral Angels, Prosperity club, Global finance, D9 Club, One Coin, DAG Coin, First Coin, Bux Coin and Alliance in Motion have fleeced Ugandans of their hard-earned money , before the owners vanished in thin air.
https://nilepost.co.ug/2018/12/09/the-18-pyramid-schemes-that-have-fleeced-ugandans-of-billions/
