11 February 2013

Zimbabwe: Econet Warns On Pyramids

Pyramid schemes, schemes that make a few people rich and a lot of people poorer, have once again entered Zimbabwe with this time the con artists using Ecocash to get the gullible to transfer money to their account.

Econet yesterday hastily warned people against participating in illegal money pyramids schemes.

In a message sent out to its mobile service customers, Econet distanced itself from the money pyramids who who are using its Ecocash as a platform.

"Econet advises customers against participating in pyramid money schemes. Econet will not be held liable for any loses incured from such schemes," read the mesage sent out to subscribers of the mobile operator yesterday.

Operators of the illegal pyramids promise participants huge and easy profits to "investors", though they eventually collapse as the numbers required to feed the new people joining first exceed the population of Zimbabwe and then the population of the world.

Only those in the first few stages of such pyramids can ever win. Such schemes are well-known around the world and are often called Pnzi schemes, after one of the greatest con-artists of all time.

Early "investors" have reported rich pickings after participating from the schemes but as soon as they become well-known they all fall apart as millions of new members are required to feed the system.

Investigations have shown that there were two most popular organisations administering the schemes along Kwame Nkrumah Avenue and Central Avenue where hundreds have thronged the offices to register.

People who throng to the offices to regsiter range from civil servants, to office workers, foreign currency dealers and vendors.

The schemes use Econet's Ecocash facility as a medium for prospective members to deposit US$5 into each account of five exsting members listed on the card and have to pay another US$5 administration fee to the scheme operators.

Those regsistered for the scheme would have to recruit more members for them to start benefitting.

The pyramid operators say one would be removed from the list after realising US$15 000 and this can be done within a short time.

After registration, one is subjected to a verification process, where representatives of the club check the cash transfers code numbers to ascertain authenticity.

Once endorsed with a signature, the prospective member takes the names of the five members he/she would have deposited the money together with a US$5 administration fee to the owners of the scheme.

After completing the initial process, the prospective member would have to wait for at least two days to receive five cards bearing the members' name and the four existing people who would have received the money deposited through Ecocash. Unfirtunately many are now finding that there simply are not enough new people joining to feed those already in.

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