How We Got Scammed Our Life Savings Through Chamas - (5 Victims Tell Their Story)

Imagine working hard to make a living and then sacrificing to save and then one day, you wake up and all your savings are gone. You are back to zero. 

This is the story of people who have fallen victim to chama scams. These are savings schemes created online and coordinated by individuals who are popularly known as the “admins”. They start well but after some time, the members of these chamas are left in tears and regret.

Here is how some Kenyans have fallen victim to fraudsters who take advantage of the popularity of the chama model. 

Patience (Lost Ksh468,000)

Patience, aged 36, joined the mitumba business in her early 20s and has climbed the ladder. She now runs a wholesale mitumba business. 

With her business growth and means expanding, she felt she needed a car. A car would make it easier for her to run her errands. When she shared this with a friend, the friend told her of an online chama where young ladies have come together to buy cars for each other.

She went on Facebook, and truly, she saw the group existed and the members of these groups were saying good things about the chama. When she inquired about joining, she was put on a waiting list since the first round of ladies getting the cars was almost being concluded.

After a few weeks, she was added to a WhatsApp group. In this group, there were 14 of them. They were supposed to contribute Ksh 52,000 every month. They would then buy a car each month for one of the chama members. The amount totaled Ksh 700,000 per month. If one wanted to buy a car worth more than Ksh700,000, they would add that out of pocket.

The chama started and ran without hiccups. Every month, they would celebrate a new car for one of their members. Although they were mostly strangers, they had since become “girlfriends” - united by their big dreams. 

Unfortunately, this only lasted for about seven months. The eighth and ninth months had hiccups, with the cars being bought later in the month than the agreed period. 

But soon the coordinator disappeared, not to be traced. Patience and four others had not gotten their cars yet. The group disintegrated and that is how Patience lost Ksh468,000. 

Vacation Dreams Shattered

Julia was saving for a vacation. She had just received a work promotion that coincided with her sister finishing school. 

Since Julia was the one supporting her, it meant that her paycheck was now free of a huge expense. 

She thought this would be a good time to enjoy a vacation. As she was contemplating the vacation, she came across a Facebook group where people saved for travel and vacations. She followed the group and, as part of her due diligence, inboxed some of the members who claimed that they had successfully saved with the group and got to travel.

She was sold on the idea and started saving. She would contribute Ksh5,100 every month for eight months. Her vacation was meant to be in Mombasa. 

As her payout neared, she was surprised when she came across a WhatsApp status from one of her colleagues in the savings group - demanding that their famous admin be arrested. 

Soon, the news of their admin’s arrest went viral and after months of following up with authorities, it was apparent that she wasn’t going to get her money back. 

Read Also: 8 Online Scams That Robbed Many Kenyans

School Fees Gone

Patience and Julia are not the only victims. James, who is a taxi driver, was also involved in an online Chama, where they contributed Ksh520 daily. The chama had 30 members and a member would receive Ksh15,000 every day. 

James had joined this chama to save for his children's school fees. As soon as it was his turn, he would get the money and offset the school fee deficit.

The chama ran for a few months without hitches. When some members started delaying their contributions, the group coordinator assured the other members that he was on top of the issues. However, complaints started appearing in the group that some members who were due to receive their share, never received it. James would also experience this when his day came. Before they knew it, they had been defrauded.

Read Also: Guarantor and Guarantees: Know When to Say No

Group Admin Missing in Action

Margaret and Josephine were also victims of similar schemes. Josephine's story is similar to that of James. But she contributed Ksh220 daily. When it was her turn, she never received any money. When she complained to the group, she was removed. 

The admin also blocked her on all social media platforms, and Josephine had no way of following up on her money.

As for Margaret, she was in a chama where they contributed to buying home appliances. She had successfully purchased some appliances, such as her fridge and microwave, through the scheme. 

However, one day she woke up to a barrage of complaints in the WhatsApp group from fellow group members. They had been defrauded.

Why Do Online Chamas Exist?

• They try to replicate physical chamas: They evolved from chamas from the village. Unfortunately, chamas in the village were formed by people who lived together and shared a social bond. Online chamas sometimes replicate the operations of the chama without the social fabric.
• They offer a sense of camaraderie: When people are saving together, it can motivate someone to stick with their savings goals. Unfortunately, that can also backfire if you are not able to get the money you have saved in the chama, or someone else refuses to honor their obligation.
• They give the illusion of financial progression: Whereas online chamas allow you to save towards your goals, they do not offer any interest on savings. They are even costlier considering administration and transaction fee

How To Avoid Chama Scams

• Always save with a registered organisation: The chama can be registered as a self-help group. This will help in the recovery of your money in the event of fraud or loss of savings. 
• Use chamas for short-term savings: The longer the chama runs, the greater the risk of dubious activities. People get complacent when the chama has been running for a long time and they start missing payments, and such mishaps, can deteriorate the credibility of the savings scheme.
• Join chamas with people you know: If you want to use chamas as part of your savings strategy, then join chamas with people you know and can easily access in case of any issues.

Wrapping Up

Social media is a powerful tool that brings people with similar interests together. Sometimes it facilitates relationships that become success stories, similarly, it has produced frustration for many alike. Therefore, it is important that you become vigilant of opportunities you come across online, such as online chamas.

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