EurExTrade. Get out now. If you can.

I’m really, really worried. For once I think it might be too late to prevent a series of minor disasters.

I’m not talking about the inability of certain monopolistic utility companies to get their billing systems working (I haven’t had a power bill since January) [see correction below], nor am I talking about the 800 loan sharks who’ve gone underground since NBFIRA got tough with them. I’m not talking about the traditional “healers” with their fake concoctions that injure and kills our neighbours, friends and relatives. This time it’s a rip-off financial scam that is getting out of control.

I’m not exaggerating, about a quarter of the emails we get at the moment are about the same thing: a scheme called EurExTrade.

The first time I heard of EurExTrade was about a year ago when we were asked by a reader if they should “invest” with them. He’d heard that people were making lots of money from the scheme and was now tempted himself. My reaction then was that it seemed too good to be true and I wouldn’t risk any of my own money in such a thing. Over the year since then, we’ve have more and more people get in touch asking for advice.

My advice is simple. EurExTrade is a scam. It’s a Ponzi scheme. You are giving your money away if you “invest” with them and you won’t get it back.

A Ponzi scheme is (to quote Wikipedia):

“a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation.”

The clues are quite clear if you look for them and if you look past the frankly amazing claims they make. On their web site (which used to be eurextrade.com but is now eccpub.com) they clearly that you can earn “up to 2.9% daily”. This is simply impossible. Earning 2.9% per day and reinvesting the earned interest comes to an annual percentage rate of over 3,000,000%. There is no legitimate investment scheme that consistently makes that sort of profit. There isn’t, there never has been and there never will be. If there was such a scheme don’t you think the banks, the bankrupt Greek Government and investment companies around the world would be doing it as well? It really is too much to ask that the owners of a web site have accumulated more financial wisdom than all the financial experts in the world.

You have to ask yourself this: How do EurExTrade say they can possibly make this sort of money? Again we only have their web site to rely on. They explain their business using phrases like “short term, technical analysis based positions” and “longer term, global events driven long term profitable projections” and “in house developed trading algorithms” but that’s all claptrap, just a sequence of clever-sounding words. In fact all they are doing is taking the “investment” from you to pay something to the person who joined last week. Of course they’re keeping the majority of it themselves. That’s how a Ponzi scheme works. It’s a scam. Most importantly all Ponzi scmas eventually collapse. Sooner or later they run out of gullible new victims and the cash flow stops. When the investors want either earnings or their money back there’s nothing left and people end up either in poverty or prison.

One of the readers who got in touch reported that many senior citizens in her home village had each been persuaded to send P3,000 to invest in EurExTrade using Western Union not to Panama, where they claim to operate, but to a recipient in Novosibirsk in Russia. That’s way too suspicious to be credible.

Ironically there’s even a slight pyramid scheme element to the them as well. They announce on their web site that their “affiliate program pays up to 10% on deposits of referred members.” So you get paid for recruiting other victims, presumably your friends, colleagues, neighbors and relatives? That’s not a good way to make yourself popular, is it?

This is all fairly straightforward. It’s a fairly traditional Ponzi scheme, nothing inherently surprising. Until you dig just a little bit deeper.

On their web site they give a long list of contacts, people you can reach if you fancy being recruited and giving them all your money. The list shows 53 contacts, 1 each in Panama and Dominica and others in a variety of countries. There’s just one contact for all of South America, likewise one each for India, the USA and the UK. However the thing that interests me most is the number of contacts in Africa. There are three for South Africa and eight contacts in Nigeria alone. Get this. There are ELEVEN contacts for Botswana. Even the contacts for Zimbabwe, Namibia, Lesotho and Tanzania have Botswana cellphone numbers. Two of the contacts in South Africa have Botswana numbers.

In total 40% of all the worldwide contacts for EurExTrade are in Botswana. What’s going on? Is this actually a scheme being run from Botswana or are we being targeted specifically? If so, why? Are we naturally gullible? Are we seen as a country most likely to fall for scams?

That’s the worst possible explanation, that we are seen as a country of gullible fools. We need to change that perception before more of our neighbours, family and friends fall for things and lose everything.

The advice is simple. Whatever you do, avoid any scheme that looks like EuExTrade, sounds like EuExTrade or is called EuExTrade. Anyone who tells you that you can make nearly 3% interest per day is either a fool, a liar or perhaps even both. Either way they can’t be trusted, certainly not with your money. If you’re already in the scheme do your very best to get your money out now, today, before it’s too late.

[Correction: My mistake, I meant water bill, not power.]