By Helen Paul
The news of another Ponzi scheme, CBEX swindling Nigerians of their hard-earned money running into trillions of naira is quite disturbing. How we continue to cheaply fall victims of these get-rich-quick schemes needs to be studied, particularly amid this critical economic hardship. I have seen depressing videos of some victims on social media lamenting how they invested and lost millions to the scheme. A particular victim even attempted suicide. Can we ever learn?
A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi schemes are named after Charles Ponzi. In the 1920s, Ponzi promised investors a 50% return within a few months for what he claimed was an investment in international mail coupons. Over the years, Nigerians have fallen victim to a series of Ponzi schemes that promised quick riches but ended in devastating losses. From the infamous Mavrodi Mundial Moneybox, popularly known as MMM that crashed in 2016, leaving millions of investors stranded, to the recent collapse of CBEX and other crypto-based platforms, the allure of high returns with little risk has continued to attract unsuspecting citizens. MMM, arguably the most notorious of them all, swept through Nigeria like wildfire, with participants earning huge profits early on before the eventual crash wiped out billions in personal savings. Since then, similar schemes such as Loom, Ultimate Cycler, Twinkas, and MBA Forex Trading and Investment Limited have followed the same pattern—initial payouts to lure in more people, followed by an inevitable collapse.
With the harrowing experience of MMM and the likes, I would have sworn that my fellow Nigerians would never fall victims of any Ponzi scheme again, but here we are, still vulnerable to this colossal fraud. As Nigerians, we are one of the smartest people in the world, but I’m curious to know why we kept falling into this same ditch repeatedly. Economically, I understand that the government must have failed us in some ways, but with our resilience, good plan, and hard work, we can choose to liberate ourselves from the claws of poverty. It’s a gradual process. Come to think of it, can we say someone who invested a minimum of five million naira on Ponzi is poor? No! There are people who invested as much as fifteen million naira or more on the fraudulent schemes. These people are not poor. The problem here is not ignorance. It is greed and covetousness.
Thank God that the Economic and Financial Crimes Commission (EFCC) has promised to recover the monies from CBEX, we can only pray and hope that it yields a positive result.
There are some reliable investment schemes we can patronize online, but we need to be very careful, especially when they promise to double your investments within a short period of time. Below are some of the red flags we can watch out for before investing money on anything:
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Unrealistic returns: Promises of high, guaranteed profits with little or no risk.
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Vague business model: No clear explanation of how the money is being invested.
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Pressure to recruit: You earn more by bringing others in.
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Difficulty withdrawing funds: Delays or excuses when you want your money back.
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No registration or licenses: Not recognized by financial regulators.
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Secretive or exclusive opportunity: “Only for a few,” “Act fast,” or “Insiders only.”
You can also ask these questions before you invest:
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What exactly does the company do to make money?
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Is the investment registered with the SEC or other financial regulators?
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Can I easily withdraw my money at any time?
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Why am I being asked to bring in others?
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Who runs the company and are they known or traceable?
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Can I see audited financial reports or business records?
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Have I done a background check on this opportunity?
