The internet and social media have made supposedly high returns investment schemes go viral pretty quickly. Folks are looking for outlets to invest in, especially with the recent crash of money market rates and the downturn in the economy occasioned by the covid-19 pandemic.
A lot of dubious companies ride on forex to perpetuate their scams, creating Ponzi schemes and hoodwinking the gullible not only to bring in their hard-earned money but to cajole their friends and family to do the same.
Make high returns and make even more money by recruiting others
Their modus operandi is simple – stimulate your greed by offering mouth-watering returns way beyond the range of conventional markets whereby you double your money in less than a year. For many such companies, their vehicle of choice or smokescreen is forex. They promise to trade forex on your behalf and deliver a certain return per working day while all you have to do is watch some forex videos and recruit friends and family.
Their leadership and personal development training are all about setting financial goals and recruiting enough people to meet that goal. They encourage you to seek out your long lost friends and recruit them to join in the bounty of depositing money and waiting for the returns.
I allowed myself to be persuaded to join one sometime last year. It has been an interesting experience. The company claims to be a forex training academy which also uses some of your deposit to trade on your behalf. The money earmarked as tuition fees are used to pay commissions – to your recruiter, his team and the company. The ‘school’ is a couple of videos with less content than what you will find for free on YouTube.
The more you look, the less you see
They supposedly have experts trading for you. You cannot see any details or evidence of such trades. Their live trade panels only show an empty chart with prices fluctuating. To make it more interesting, they only deal with bitcoin (BTC). This means you have no evidence of payment since the transaction is anonymous. You don’t know their bank account or proof of address. They are virtually anonymous. Even images of their head office look like stock photography, not a real building.
To make matters more interesting, the financial services authority in their home country (our equivalent of the securities and exchange commission) issued a disclaimer that the company is not licensed to provide financial services hence anyone that deals with them do so at his or her own risk.
That is when it dawned on me that I did not do a thorough investigation before allowing myself to invest. I have since recovered my capital through profit payments while waiting for what is left of my capital to be returned to me. The snag is, with the CBN ban on banks rendering services to cryptocurrency exchanges, holders of bitcoin and other cryptocurrencies may have to wait out the ban or find someone to sell to, who can pay in dollars or any other agreed currency.
This is what I think is going on.
The company is duly registered as a company (an educational company) but is not registered with the SEC or its equivalent. That means all investment products offered to the investing public is illegal, hence the disclaimer from the authorities.
I also doubt if experts are trading with the money as claimed. The focus is more on network marketing than teaching members how to trade profitably. That means you can be a student for donkey years without acquiring the skills to trade by yourself.
It looks like the daily profits announced with fanfare is derived from money from new investors; a pyramid scheme sustained by new inflow from recruits. That is why every meeting is about how to bring in more people. Even Christians who have not shared the gospel in ages become evangelists overnight, looking for recruits to earn commissions and rewards that come with climbing up the pyramid.
Pyramids built with nothing eventually collapses
Like every pyramid, the inflow of recruits eventually reduces to a trickle. Everyone who is inclined to join has been evangelised. There are now so many people to payout. The company, which is essentially a website and a bunch of people working from home can simply evaporate into the thin air.
You have no one to report to. They are not registered with a regulator empowered to handle your complaint and effect redress. You cannot complain to their bank. Their bankers are not known, thanks to cryptocurrency. They can simply melt into the thin air.
The same scenario is playing out with some Nigerian based companies. They may not be as sophisticated to hide under cryptocurrencies or run a virtual office. They may have an actual office with staff and make the same investment promises. They will brandish their CAC certificates and are silent on SEC which regulates financial services. Which means their operations are illegal. They know that few people know this, or bother to find out.
I ran into a video on YouTube of investors carrying placards to a popular church, asking the Pastor to tell him member to return investors’ money. This member, the owner of the dodgy investment company not registered by SEC used investors’ money to make a mouth-watering donation to his church while telling his investors to be patient, he will pay them when money becomes available.
Some people love scams
Many people do not mind investing in illegal schemes or scams, as long as they get the promised returns. They are not interested in how sustainable the illegality is. They believe they will get their money out before the house of cards come tumbling down. That is a personal choice. I don’t invest with non-licensed companies as a principle. They may be good people or scams, I don’t want to find out. The issue for me is not about pulling stunts to make money but making money legitimately and sustainably.
Take time out to investigate before you invest. Do not suspend your thinking faculties and common sense in pursuit of high returns. If someone is making good money by himself, why does he need yours to multiply also, and is ready to break the law for the love he has for you?
If you do not know what to do with your money, there is a line of people waiting to get their hands on it. Invest in knowing what you are doing before you invest. It will save you a load of heartache.
Photo: vecteezy.com
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