Many times I wonder, are Ugandans too gullible, easily excitable or we simply love quick unrealistic returns on our money and as a result get defrauded so many times over again without giving up?!
How would you explain a new pensioner carrying his entire ‘nest egg’ and throwing it into a get rich scheme which promises to pay him 5% every week as returns.
Before one can throw their money into a scheme that promises to pay as much as 25-30% a month, it’s only prudent to find out what exactly this entity does with this money and if the entity actually exists legally if so, what is the track record of it’s directors and management.
My few encounters with the people who run what look like easy get rich quick schemes in Uganda is they are in the same circles, many of them have committed similar crimes before, have records of being wanted by the police or have actually served time in jail for similar crimes.
Funny thing about these guys is they seem to refine their trade and selling points the less backlash and odds they face. They always find new and old gullible people to rob from whenever they are back on their feet.
From the days of Dutch International which was over a decade ago, to the more recent one coin and BLQ to the not so prominent ones in between like Aoz international, Crowd 1 to mention but a few, the lure for quick effortless gains never ceases to appeal to Ugandans.
It raises the question, do we get enough financial education any where or we only pick professional and vocational skills from our academic institutions only to come out get the jobs, start the businesses, make the money and get defrauded when we are tempted to try and grow our small savings 10x like 10 million to 100 million in a few months?
And the penalties given to these fraudsters when they reach the courts of law that is if they do which is very rare are laughable as well, they hardly get beyond 5 years in jail while some smart ones who know the loopholes in our legal justice system sneak out of the country on tip offs from insiders and others only get arrested for a couple of days and weeks only to get bonded and nothing ever happens because they bribe well!
What is interesting though about Ugandans and their relationship with fraud is the way many of them ignore the risk and never really ask the hard questions when it comes to trying to make quick unrealistic money.
I have encountered very responsible people who took out sizeable loans and mortgaged real assets to get money and throw into Ponzi schemes yet they can’t do the same to invest in a regular business that has real chances of succeeding over the disincentive being time and personal effort.
My simple understanding of money is that most times passive investments generate earnings at a return lower than businesses where personal effort and daily supervision is involved so if any ‘investment scheme’ promises you returns above 30% a year think twice and consult widely before venturing.
In relation to that, look at the returns on government paper, other fixed income investments offered by private legal and well regulated entities, they should give you an idea of what kind of passive income may come your way.
The other thing you can look at is what commercial banks charge as interest on the loans they disburse to us which is usually about max 25% per annum considering the average of the past few years and could drop to as low as 16% for very credit worthy entities and low risk individuals.
Given their knowledge of the financial markets, they very well know money can not generate the kind of 10x and 20x over months or even a year in normal circumstances that’s why their interest rates lie with in those limits.
Fraudsters have also mastered the art of creating similarities to established entities and systems for example after the success of Bitcoin and a few core coins in the crypto space across the globe, many fake coins have come up without any real use or value beyond the hype and investors have lost money.
Similarly, there are a number established names in the space of network marketing especially selling nutrition and health related products like Neo life, AIM Global, Tianshi and others through a network marketing model. These have real products and real proper businesses that thrive on individual sales efforts and ability the ability of independent distributors to build teams. It takes good salesmanship and team building abilities to thrive in them.
However, some cunning people misrepresent these businesses as get rich over night opportunities and some even go an extra mile and establish real fraudulent entities they claim operate on a similar model which they don’t even understand fully. This creates a bad name for the entire industry even tarnishing the serious companies which are doing things right.
Any ways let’s be on the look out for the too good to be true deals and investments and also endeavor to educate ourselves about investment and finance to avoid being scammed come 2023.
Our government should also be more vigilant on dealing with scammers and fraudsters, the penalties should be severe so as to deter as many people from getting involved in these schemes.
A happy scam and fraud free festive season to you all.
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