SWAZILAND:MTN’s Mobile Money hijacked

 A rather good initiative by MTN Swaziland to allow their registered customers to conveniently transfer sums of money to their relatives in faraway places has been hijacked by certain syndicates to con unsuspecting members of the public.

This newspaper can this week reveal that MTN’s Mobile Money service has now become the latest conduit for emerging pyramid schemes to move monies between depositors who are part of their ever growing membership despite various warnings that such schemes are illegal and risky. 

The words to ‘con unsuspecting members of the public’ have been deliberately selected because the subject of this story has left some members of the public, who are its customers, with more questions than answers following its sudden collapse.       

With the Central Bank of Swaziland (CBS), particularly having opened its eyes widely where it concerns the operation of pyramid schemes in the country, they have centred their battle against these schemes on commercial banks, which have been used to transfer monies between depositors. 

Several Ponzi schemes have mushroomed in recent months in the country touting their members to make deposits through mobile money instead of commercial banks where deposits and withdrawals are otherwise easily traced by the watchdog; the CBS in cases where they suspect Ponzi schemes activity is ongoing.     

Just like the fast becoming famous MMM, which has taken the country and many in the region by storm, a number of mushrooming Ponzi schemes promise huge profits to their depositing members. 

These schemes promise as much as 50% interest with some as much as 100% depending on the period taken before receiving the investment return. It has, however, been easy to trace these schemes for the Central Bank as the money used to be deposited in one central account. One such scheme that was nabbed by the CBS and labelled a pyramid scheme during a marathon court case is the once famous Channel S Club, whose monies still remain frozen by the bank with its members still in the dark on how they will eventually get their returns who deposited money into the scheme.

Making members to deposit their money in the central account was always going to be a tall order for the mushrooming schemes hence they were forced to look at other ways they can grow their schemes. 

The Central Bank, with the assistance of the commercial banks, found it easy to trace the pyramid schemes by following the trace of the monies deposited in the central account. 

A new way of continuing with the schemes without necessarily being traced was coined and it has worked for the pyramid schemes. This time around it has become a mammoth task for the commercial banks to trace money deposited into the schemes as they no longer operate using a central account. 

In a funny way, it is just like people transferring money to each other, which seemingly are innocent transactions that banks just cannot keep watch over. The money is now moved through investors and not the central account.

As if that was not enough, the local Ponzi schemes have gone a further step to ditch the various banks as they are now operating using MTN’s Mobile Money service. One such scheme is the Money Flight to 2022, which originated at Ngogola past Mafutseni in the Manzini region. 

Having been started just two months back, its membership had grown very fast and now boasts of close to 800 members. It operates through Whatsapp social media platform where information about the scheme and where money should be deposited is disseminated to the members.  

In its manifesto, the scheme is described as a daily stokvel (scheme) that is trying to empower its members financially. They say even though it was started in Ngogola, everyone is welcome to join as they share and grow their wealth. On a daily basis when there is need for money to be transferred, any of the scheme’s administrators post a list of names with numbers next to them. 

These numbers show the amount of money that should be deposited.  The other members then choose from the list and reflect their choices in the group to allow the scheme to be up to date with all the necessary information. 

Upon choosing that particular member they are then paid through mobile money after going to the verification group to seek their mobile money numbers. 

After the payment is complete that particular member returns to the verification group to reflect payment stating all the details of the payment and the one receiving the payment also reflects having received the money on their mobile money account. 

On the following day the name of the one that made the payment the previous day appears reflecting the money that should be paid to them with a 20% return included and the very same process starts and is repeated the following day.

One member of the Money Flight 2022 scheme, who preferred anonymity, lamented how members were lured into the scheme.  

“What is of great concern, is that once members are lured into joining the pyramid schemes, they view them as the next best thing to investment yet when such schemes close down reality then strikes that all is lost. We are lured into investing huge sums of money that even go up as E10 000 to E20 000 depending on how long we have been with the scheme and have gotten used to the idea of getting rewards just by depositing money. We all start small, but end up investing huge sums of money as the returns are quite good at the start up until we realise they are being conned once the membership enlarges,” disclosed the member.