Nigerians took to Twitter on Sunday to tell painful experiences dealing with companies they had thought were legit investment platforms that turned out to be anything but what they expected.
It began with a tweet from Kalu Aja, a personal finance expert, asking his followers to share their experiences if they had been duped or their money stolen by an “investment”, “Ponzi” scheme.
By Tuesday, that tweet has received over 989 quotes and over 3000 replies. The stories are as diverse as they are almost unbelievable. But many of the victims have proof of the transactions. There also some lessons to be learnt.
Nigerians are stashing emergency funds
Poverty may be rising in Nigeria, but many more people are stashing cash they hope will bail them out should the economic situation gets too out of hand. In the meantime, they are willing to push some of those funds in any business that can guarantee them huge returns.
A follower named @_Being0 claims to have invested N4 million and also convinced the sister who just lost her job due to the COVID-19 to put her N500,000 in a company called MBA Forex. While MBA Forex paid a return on investment to @_Being0, the sister is yet to get both the capital or the interest.
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“Since November till date, we haven’t been paid. My sister has attempted suicide twice because she has absolutely nothing. My husband has stopped talking to me because it was his money I used to do the investment thinking I will return the capital since it was all his savings for the past 3 years of hard struggle,” @_Being0 tweeted.
Another follower Adekunle Agbede claimed he lost N26 million to Wales Kingdom Capital Limited, a company that was allegedly into forex, real estate, and automobile.
“Most of the monies were given to me by some friends to invest on their behalf. My own personal money was N2 million,” Agbede tweeted.
Deolu, who identifies as @Tioluwase also claimed to have lost N7 million to Wales Kingdom Capital. Abiola Fash, another follower, said she invested N15 million with the same company through an affiliate.
Nigerians love higher-yielding investments
The approved minimum rate by the Central Bank of Nigeria (CBN) is 1.15 percent. Out of the 21 deposit money banks that published their rates as of March 5, 2021, Heritage Bank pays the higher interest rate on savings at an average of 4.2 percent.
With most bank interest rates below 5 percent, Nigerians are always on the lookout for investments promising good returns. On many occasions, those “good” returns are outlandish yield promises that often end badly.
Christian Omorogie claims he invested N200,000 in a company known as Ortseam Evolution Ventures which issued him a certificate promising to pay him N30,000 on the 16th of every month with N90,000 as total returns for three months.
@Jaiye_jaye claims he invested an unspecified amount of money in B2 Consult with a promise of a monthly 10 percent ROI. Another company, Clickella offered investors a 50 percent return on investment in seven days.
“I know of one that gives 50 percent in 9 days,” says @Olu_GG. He claims to have benefited from the company as he has learned to invest as “early” as possible.
Most investors don’t do due diligence
The majority of those who said they were scammed were either referred by their friends, a relative, or a church member. Generally, most of the people who got burned from bad investments were introduced to it by those close to them, whose words carry a measure of trust.
Kayce Chikadibia says his mother was introduced to a company known as DW-Arerben Global Investment Limited by her church members. The mother invested an unspecified amount of millions of naira which was never repaid.
“I didn’t even know about this until I decided to check her financials when she started subtly complaining about being broke,” Chikabidia said. Church members also introduced the mother to another company called La Buena Vida.
“It is wise to verify business opportunities before you “invest”,” says Adeti Toyo, a digital marketer, “I particularly hate giving people money to do business on my behalf. I also know that everyone wants to make more money. As a rule of thumb, profitable ventures will demand that you do some work.”
Kalu Aja says people should always do some due diligence before investing in any business or venture. It always helps to find out the company registration status of the entity. For crowdfunding platforms, an SEC registration certificate helps to separate the fake entities from the real ones.
“All and any companies that seek to collect funds from investors to invest in Nigeria in any investment scheme must have a Securities and Exchange Commission (SEC) licence, no exceptions,” Kalu Aja said.
Repeat scam victims
Many of the respondents to Kalu Aja’s tweet have been scammed more than once.
A follower, @therealasp1 said he thought he was spreading his investment when he invested N4 million in Wales KingdoM Capital and Quintessential.
@oka4Nwa lost N13.5 million investment capital to MBA forex and Wales Kingdom Capital and has been nursing a mental breakdown for the past three months.
“I literally lost all my money in 2020 to MBA, Mapng, Tonso Elites, and for Cashfx, I had to withdraw my little money before I was scammed,” said Ugochi Uruakpa, another follower.
