Windhoek — MyLife Change247 (MLC247), a South African-based company that describes itself as a peer-to-peer global funds exchange community, has been deemed illegal in Namibia because it contravenes the provisions of the Banking Institutions Act.
The business, which recruits new members and seems to operate solely online, resembles the operations of a pyramid scheme, which is illegal in Namibia, it has been found.
An assessment by the Bank of Namibia (BoN) concluded that the company's business model, which is based online, contravenes Section 5 (1) (b) and 55A of the Banking Institutions Act.
"Based on the bank's assessment, the business model of MLC247 is not sustainable and may result in the loss of public funds. The Bank would like to appeal to members of the public to refrain from participating in the promotion of activities of MLC247.
"Further, by transacting with or getting involved in the business practices of MLC247, such participating members of the public are committing an offence in terms of the Banking Institutions Act 1998... as amended and if convicted may be subject to a fine or imprisonment as prescribed in the Act," BoN's deputy director for corporate communications Kazembire Zemburuka warned.
MLC247's website indicates that it can provide 75 percent monthly compounded growth.
"Become part of a community full of great and selfless people willing to help one another achieve their dreams. Join a digital platform which allows you to be part of a global mutual aid using the latest technology of digital currency i.e. BitCoins in free yourself from the world of greedy and selfish monopolies promoted by the world leading paper money systems that tie us in debt and poverty," reads the company's website.
"With a minimum of R200 you can be part of the community right away. No joining fees are charged initially or in a long run [sic]. Dreams range from 1 to 6 months waiting period. So, feel free to choose a period that will suit your dream and targets," reads the South African-based website.
MLC247's business model was, however, found to be in breach of the Namibia's banking laws due to the high returns it promised within a short periods to potential members.
The company accepts deposits from members as a regular feature of its business and further extends these funds to other members. MLC247 is also in violation of local laws, as it does not hold a license to take local deposits.
Zemburuka added that the company encourages members to participate in a referral system, where income potential is subjected to the successful direct and indirect referral of new members, for which commissions are accepted as a regular feature of the business.
"The company does not seem to sell any products, and if so, it is not the main feature of the business. The principle feature of the business is a financial scheme and the referral system, which involves attracting and encouraging members to invest and recruit more members with the possibilities of making commission," Zemburuka explained.
BoN also called on the public to remain vigilant when participating or investing in online financial schemes.