Thousands of Kenyans are lamenting after losing their hard-earned money to a Ponzi scheme that, as always, was too good to be true.
Amazon Web Worker Kenya had charmed its way into their wallets with offers of quick riches. For people desperate for a quick route to success, this was the perfect opportunity.
To earn a commission, members were to deposit any amount starting from Sh300 and complete certain tasks at different levels. One could also earn either through referrals or by locking the money for a specific period.
For instance, funds saved for seven days promised a return of about 24 percent and, if you extended the period to a month, you had a 50 percent profit.
To hoodwink investors that they were linked to Jeff Bezos’ E-commerce company Amazon, they plastered the company’s logo on their landing pages. To gullible Kenyans, that was enough proof to have them register and persuade others to join. Investors are now crying foul that they can no longer make withdrawals and the firm’s support staff are unreachable.
The application, launched in Kenya last month with over 100, 00 downloads, has already been deleted from Google Play store. The developer’s details have also been erased online.
“I have been defrauded. I joined AWW, as we call it, last week, at the influence of my friend who termed it a good platform to make money. To invest, I borrowed Sh8,000 from Safaricom’s Fuliza,” said David Kamau, 35.
In just a week of joining and having earned Sh2,000, Mr Kamau was hooked. He even created a WhatsApp group to attract new investors.
“My plan was to maximise on the platform and make good money before it vanished. I knew it was just a matter of time because this is not the first time I am joining such schemes. This time, I joined too late and it went down too soon,” he said.
Amazon Web Worker might be the latest financial scam but definitely not the first. It has only added its name to a list of Ponzi schemes, such as Crowd1, Public Likes, Bold Cashers and Petron Pay. Mr Robert Ochieng, a Nairobi-based finance and investment advisor, said platforms promising investors high returns in a short period of time are mostly pyramid schemes.
“In a Ponzi scheme, the earliest investors are paid using money from joining investors. The scheme continues to grow as many individuals join, then it crumbles because it cannot sustain itself,” he said.
Last year, financial sector regulators, including the Central Bank of Kenya, the Capital Markets Authority and Retirement Benefits Authority, warned of a rise of fraudulent and unregulated schemes.
“Watch out for companies that promise high and consistent returns. The likelihood of this happening is slim and being asked to bring other investors on board could be a red flag,” said Mr Ochieng.
“Second, you should insist on examining financial statements or records of such companies and have a proper understanding of how the returns are generated. Being told there is a smart proprietary way of generating returns is not good enough,” he added. You also need to check whether the company is regulated.
“With some of these firms, all you need to do is search them online and you will find multiple red flags. It could be in their location or grammatical errors in their posts,” said Mr Ochieng.
