The clues are there

Despite everyone’s efforts, people are still falling for a variety of scams. Not in foreign countries far away, but people here in Botswana. Our relatives, friends, colleagues and neighbours are still falling scams that are leaving them poorer and unhappier people.

A couple of weeks ago a reader contacted us saying:

“I have a friend I met when I was in South Africa. We had a chat and we exchanged numbers, and he was calling me everyday now he asked me what can he send to me I said anything. Later he sent me a receipt from Fastlink Couriers. Now I'm asking whether these things are for real or are they scammers. They called and I have been told that my parcels are in South Africa in Johannesburg and I have to clear them. I didn't give them anything I told them I will send but that I will contact you first. Please help me.”

I suspect that most people reading this will have heard the story many times before. You know this is a fairly common scam these days. We know that that there is no package, the courier company doesn’t really exist and that in most cases, even the friend doesn’t exist. The slight novelty with this case is that the friend is a real human being, someone she actually met “in the flesh”. Despite that I think it’s safe to assume that the name he gave her was false. Everything he told her about himself will have been lies.

I don’t know how far things went between them when they met in South Africa but I know of other cases where things went a lot further. Let’s say that we’re used to scammers screwing their victims financially but on these occasions they had other ways of doing so.

They’re not just scammers, they’re rapists as well.

Sadly we didn’t quite get to this case in time. She told me:

“I sent them 500 Rand and when they called for the second time then I started to have that belief that they are scammers. Till today I didn't send anything they are calling me everyday to process the payment.”

Luckily it was only R500 she lost. Subsequently they’ve asked her for payments of R1,600 and then R2,500 because they claim her parcel “has overstayed”. Unfortunately for the scammers she’s not planning ever to pay them anything again.

It’s not just conventional “advance fee” scams that are conspiring to steal your money. There are various “investment” schemes that are just as suspicious. A member of our Facebook group recently asked us about a scheme calling itself “Easy Wealth” which offered some remarkable profits. Their page claimed that for a “Donation” of R5,000 and a monthly fee of R400 the donor would experience “monthly growth” of R3,000. According to these people if you’re prepared to be offer a donation of R40,000 each month and pay the fee of R4,000 you’ll get a growth of R31,650. That’s a monthly return of 79%.

Their advertisement says:

“Saving Plan allows you to let your money grow and choose a certain amount you want available every month! contact us for more details Easywealthfnformation@gmail.com
Easywealthregister@gmail.com
whatsapp-+27627523935”

Can you spot the clues that this is a scam?

Firstly, any money-making scheme that includes the word "easy" is a scam. Making money is never “easy”, it requires either hard work or very smart investing. Secondly, any scheme that says you can have "growth" of 79% each month is a scam. Thirdly, any money-making scheme that operates from a Gmail address is a scam. Fourthly, any money-making scheme that operates from a Vodacom cellphone number is a scam.

Finally, any money-making scheme that adopts the same model as MMM Global is a scam. Like MMM Global is. Or was.

MMM Global is a classic Ponzi scheme that was created by a Russian called Sergei Mavrodi. They claim they are “a mutual fund exchange network where people provide financial help directly to each other in automated Private Offices via the internet. You Provide Help to someone else (donate) then get rewarded with 30% every month on the amount you Provide Help with (donate). You then get an opportunity to Get Help (withdraw your funds) you have Provided Help. The Power of Giving lets you receive in 23 times more than you gave to others in a year!!!”

Mavrodi isn’t new to this business. He’s already spent several years in a Russian prison for running an identical scam there. Clearly this is a vocation to him, not just a job.

Image of Mavrodi being escorted to prison in Russia c/o Mail & Guardian

Of course MMM Global is nonsense. Like “Easy Wealth”, getting returns of 23 times your investment is ridiculous and only Ponzi schemes make such claims. Schemes like Eurextrade did the same, and they survived for a couple of years before they collapsed as all Ponzi schemes eventually do.

Remember that Ponzi schemes, like pyramid schemes, always collapse when the supply of new victims dries up. Ponzi schemes rely on those new members because that’s where all the “growth” comes from. There is no real investment or growth in a Ponzi scheme, only money flowing from new members to older ones. And of course the largest proportion of the money that flows to the founders of the scheme.

The bad news for the victims that joined MMM Global is that this scheme now seems to have collapsed. Some reports say that Mavrodi is on the run again.

When you know a little about scams, the clues are obvious but the best clue of all is implausibility. If it sounds too good to be true then you can bet that it IS too good to be true. That works for advance fee scams but also any investment that offers enormous returns.

Just look out for the clues. Please. If you are ever in doubt, you know you can contact us. For free.