Too Good to be True? Signs It’s a Get-Rich-Quick Scheme, Scam

The lure of making millions coupled with the economic impact of the Covid-19 pandemic, has resulted in hundreds - if not thousands of Kenyans falling victim to elaborate get-rich-quick schemes.

Seemingly at an all-time-high as a result of millions of Kenyans turning to online platforms under the new normal, countless harrowing stories shared by victims have been popping up at alarming rate.

As recently as a week ago, Citizen TV’s Waihiga Mwaura detailed how his name had been used to append legitimacy to an online cryptocurrency scam named Bitcoin Code.

“I sighed with concern because I knew he [a medical doctor who had called him] had fallen victim to a two-year-old online scam which alleged that along with a local billionaire, I had endorsed a cryptocurrency trading platform.

“Despite my best efforts to warn Kenyans about the scam via my social media platforms, it seems that the conmen had kept changing web addresses and strategies to target vulnerable Kenyans, who wake up hopeful that the day will bear better tidings,” Waihiga narrates in the BBC’s Letter from Africa series. 

Several names of Kenyan celebrities and public figures including businessman Chris Kirubi, Manu Chandaria and Capital FM presenter Fareed Khimani have been in a variation of the same article to promote the scam. The site that clones existing legitimate news websites also claims the platform is endorsed by among others Richard Branson, Elon Musk and Bill Gates.

On May 29, 2021, the Directorate of Criminal Investigations (DCI) announced the arrest of a suspect believed to have fleeced millions of shillings from Kenyans in a fraudulent scheme disguised as an e-commerce referral app platform known as ‘Amazon Web Worker’.

By the time of the arrest, hundreds of Kenyans had flooded social media platforms to vent their frustrations, with some lamenting that close friends and family had introduced them to the ‘investment opportunity’. Some said they had deposited as much as Ksh300,000 in the app that promised payments for referring others to join - with juicy promised returns of up to 38% in a week!

The latest incidents prove that fraudsters are continuously coming up with new tactics to swindle people. As technology advances, so does the level of sophistication used to lure people into parting with their money or assets. 

It is therefore wise to be alert and cautious about the information you receive or any solicitations geared towards getting you to share personal information or invest in certain schemes.

These con artists have come up with creative ways to lure unsuspecting Kenyans, from dodgy farming investments, suspicious off-plan housing sales, to the latest cryptocurrency mining scams.

How to Spot Get-Rich-Quick Schemes 

It’s important to arm yourself with knowledge on how this new crop of fraudsters go about their ‘business’.

This could potentially save you from losing your hard-earned money to the creative thieves.

If your answer is yes to any of the statements laid out below, alarm bells should be going off, as you are likely to be walking into a scam.

Have you:

• Been promised a high return at no risk whatsoever if you invest in a particular scheme?
• Been asked to invest in an institution or scheme which is neither regulated by, nor registered with, a regulatory body.
• Been promised higher returns the more people you recruit into your investment scheme?
• Been lured into an investment scheme with extraordinarily high returns?
• Been pressured into making an investment decision because the opportunity will close, or because the first investors make much higher returns than later investors?
• Been asked to invest in a scheme whose owners are murky, or unclear?
• Been guaranteed a high return, regardless of circumstances?

• Been bombarded with testimonials, especially from people who have made a lot of money, or who constantly seem to be on holiday, or surrounded by expensive cars and houses?
  

Additionally, you may also be about to lose your money to fraudsters if any of the scenarios applies to you. 

Have you:

• Received an email or mobile phone text message informing you that you have won a certain amount of money, yet you did not enroll in any competition? Were you asked to act immediately to avoid losing the opportunity to get a particular prize?
• Been asked to pay some money or fee for a free gift or access to some unclaimed money?
• Received an email requesting you to assist someone (usually a foreigner) to access funds in an account that someone inherited?
• Received a call from someone purporting to be from a particular company, and who asks you for personal information such as your PIN, password, bank account details, credit card number etc?
  

If your answer is yes, you might want to as fast as you can from the supposed opportunity. 

Common Types of Financial Scams in Kenya

Pyramid Schemes 

These are fraudulent schemes that promise high profits to investors. However, this is reliant on the ability of the recruit to enroll more people to join the scheme. 

The next level of recruits is also expected to recruit more investors, and it thus becomes a chain of recruitment. Some schemes may indicate that they have a product they are selling, but this is usually a front to entice consumers and hide the pyramid nature of the scheme. 

At first, the scammers may appear to pay investors on time, but they eventually stop and disappear without notice.

Ponzi Schemes 

These schemes promise high short-term rates of return or dividends to investors. Investors pay money to a portfolio manager with the understanding that they will receive payment at a later date. The investors are usually under the mistaken belief that they are investing in a product or service.

Unlike a pyramid scheme however, the investor in a Ponzi scheme is not expected to enroll new recruits in order to get paid. When an investor wants their money back or a dividend is due, they are paid using the money received from new investors. 

Similar to pyramid schemes, the fraudsters use the money collected from the initial investor to pay subsequent investors. The cycle continues until the organizer once again flees with the money, which normally happens when there are no new investors being brought on board.

Advance Fee Scam 

In this type of scheme, a scammer will send an email, letter or make a phone call to a potential victim offering them a large sum of money, service or goods. 

The catch, however, is that one is expected to part with a fee before you can access whatever is being promised. The scammer may indicate that the fee is for taxes, shipping costs etc. 

The unsuspecting victim will be requested to wire the money or send through a mobile payment platform. However, once the payment is made, the scammer disappears.

There are countless other schemes, as fraudsters keep re-inventing themselves in order to appear as legitimate ‘investment opportunities’.

With this in mind, it is important to know how to protect yourself against being scammed or defrauded.

Below is a checklist to adhere to when dealing with potential get-rich-quick opportunities.

1. Do not respond to unsolicited emails, letters or calls promising you some form of benefit.
2. Do not share personal information online (website, social media), by email or over the phone.
3. Do not use the same password for various accounts. Where possible, have multi factor authentication for sensitive accounts.
4. Do not include too much personal information in your social media profile. 
5. If someone you appear to know requests for monetary assistance through email or text, call them first to confirm if it’s a genuine request. It may be someone impersonating them,
6. Exercise caution when making online payments with your bank card. Countercheck if the person or company is genuine before providing details or making payments.
7. Do not click on email and text message links or attachments that request you to log in or verify your password. You should go to the official/legitimate website and log in from there.
8. When in doubt about an issue, person, company, investment etc., seek a second or third opinion from someone else who is not associated with whoever is corresponding with you.
   

All in all, if you feel like the deal sounds too good to be true, you’re probably right. Trust your instincts.