Reports from the Zimbabwean media have disclosed that the MMM Global Zimbabwe has collapsed; causing thousands of people in the country to lose their hard-earned money put into the scheme.
In Nigeria, the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) have warned Nigerians not to subscribe to the programme, calling it a Ponzi scheme. However, some Nigerians have ignored these calls, investing millions of Naira into the programme, which promises about 30% to 50% profit monthly. According to a Zimbabwe’s newspaper, IHarare, thousands of dollars have been lost by the country’s citizens to the online pyramid scheme.
It was reported by the paper that “the social financial network, which relied on an accelerating number of new members to pay off the old, abruptly terminated its services last week leaving participants stranded.” It explained that the Reserve Bank of Zimbabwe had warned Zimbabweans that the scheme was fraudulent and that there was no legal recourse in the event they lost their money, but that was ignored, causing some of them to lick their wounds in secret now.
“The participants are made aware that they make their money by recruiting new members who in turn must recruit more members,” the Central Bank had warned. This development comes as Econet’s mobile financial service platform, EcoCash, distanced itself from the pyramid scheme. Participants had claimed they were using EcoCash for their transactions.
“We have noted that some of these pyramid schemes are allegedly advertising in a manner that suggests that the Ecocash facility is a medium for prospective members to deposit their money. This is not correct.
“We advise our valued customers and all stakeholders that Ecocash is a licensed mobile payment platform that enables customers to make financial transactions such as sending money, buying prepaid airtime as well as paying for goods and services within the confines of the law of Zimbabwe. “EcoCash promotes safe and legal transactions but will not be held liable for any losses arising from the use of EcoCash to engage in illegal activities such as Ponzi schemes,” EcoCash had said.
MMM stands for Mavrodi Mondial Moneybox and takes its name from its founder, Sergei Panteleevich Mavrodi of Russia. He founded MMM in 1989 and the scheme was declared bankrupt three years later leading to the disappearance of Mavrodi until his arrest in 2003. The scheme advertises itself as a mutual aid fund under which recruited members contribute money to assist others and are promised investment returns of 30 percent per month. Some of the people left counting their losses told The Herald that they received emails that the scheme had been suspended until September 15.
“All along things were moving in the right direction and we now have nowhere to claim our investments,” said Mr Tinashe Muza of Harare.
“When we started putting our funds in the scheme one could get assistance within seven days but things later changed to 14 days and when we were shut out the waiting period was 21 days. What it simply means is that the number of people in need of help has outnumbered the number of people joining. Right now we have nowhere to get our money which we invested.” Another victim, Mrs Rosemary Mawonde said: “We never thought the scheme would end this way as we believed that by using EcoCash to do the transactions, things were in order. I am surprised that EcoCash is also distancing itself from the scheme and it is clear that I will never recover the $300 that I invested.”