NDIC
The Nigeria Deposit Insurance Corporation (NDIC), has listed greed and desperation to make quick money as reasons people fall prey to Ponzi schemes.
This is as the corporation maintained that ignorance, financial illiteracy, bullish risk appetite, regulatory arbitrage and failure of information were part of what sustains ponzi schemes in Nigeria.
Speaking at the 2022 workshop for Journalists in PortHarcourt on Monday, Mr. Micheal Oladele, the Director, Bank Examination Department (BED) of NDIC, said constantly building both human and regulatory capacities to meet up with evolving activities of ponzi schemes was necessary.
Oladele said that the Corporation was also encouraging the public to report such schemes known as ‘wonder banks’ via the NDIC website.
The director in a lecture with the title ‘Rising Ponzi Scheme and Investment Scam in Nigeria: What we need to know’, advised the public to only patronise regulated entities and always conduct due diligence while trying to invest.
He said the Corporation was a member of the inter-agency committee on illegal fund managers including the Central Bank of Nigeria (CBN), and the Securities and Exchange Commission (SEC), among others.
Oladele said Ponzi was an aspect of investment fraud, saying that there was paucity of data for Ponzi scheme frauds in the country.
The director listed some of the method of operations of Ponzi schemes to include offering of abnormal return on investment and desperate search for new investors.
He suggested stiffer penalties for operators of ponzi schemes.
According to him, women are mostly being used to perpetrate Ponzi schemes and advised them to desist from being used as ambassadors for such scheme testimonials.
Ponzi scheme, experts say is a form of fraud in which belief in the success of a non-existent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.
Historically, Ponzi schemes in Nigeria were common in the 1980s and early 1990s.
The earliest in the recall were the Umana-Umana investment platform in Port Harcourt and Calabar, the Planwell scheme in Edo State, and the Nospecto in Lagos.
Other ponzi schemes in Nigeria include, MMM, Twinka, Ultimate Cycler, Givers Forum, Crowd Rising, Clarrita, among others.
