Namibia: Bon Warns Against Pyramid Schemes

7 January 2022

Bank of Namibia governor, Johannes !Gawaxab warned the public on the matters of investing their hard-earned money in illegal schemes in a statement released by Bank of Namibia yesterday.

He said the illegal financial schemes contravene the Banking Institution Act of 1998 and they threaten the financial stability of the country.

These are illegal financial schemes that usually start with one person that recruits a few other people to join in what is regarded as a great investment.

The bank said, "pyramid schemes may seem enticing to participate in, however, they are unsustainable, illegal and do not guarantee profit to participants. These are usually established by individuals or unlicensed and unregistered companies.

"Do not invest your hard-earned money in illegal schemes. Protect yourself and those around you from falling victims."

!Gawaxab said, "at some point when you are unable to recruit any members, the scheme leads to financial losses for participants."

These illegal schemes are designed to steal people's hard-earned money.

The scams make no money by providing actual value to anybody; their only business is to recruit new unsuspecting people and charge them membership fees.

In other cases, the schemes are tied to products to make them appear legitimate, but the items do not have any actual value.

The true goal of the scheme is to attract as many individuals as possible in order to profit.

The fees invested by new members are used to pay old members to keep the illusion of real profits and to keep people signing up.

These pyramid schemes come in many different forms which makes it difficult to spot for regular people.

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