Key highlight
- Many Nigerians are losing money to fraudulent investment schemes because they fail to look at the glaring red flags.
- Dayo Ayeni said one of the signals includes the promise of high returns with little or no risk.
- He, however, noted that some people invest in fraudulent schemes with plans to get out before it collapse.
The Chief Innovation Officer at BusinessPlus Limited, Dayo Ayeni, has said that many Nigerians continue to fall the victim to fake and fraudulent investment schemes because they fail to take note of the warning signals.
This is even as he pointed out that the high rate of inflation, economic hardship, and greed are pushing some Nigerians into fraudulent schemes.
According to the News Agency of Nigeria, Ayeni said that these vulnerabilities have exposed many Nigerians to become targeted by investment fraudsters.
While noting that some of the perpetrators of these heinous acts sometimes promote adverts on social media with a promise of higher returns, he said Nigerians looking for easy ways to double their little income easily become their prey.
How fraud schemes operate
Explaining the modus operand of the fraudsters, Ayeni said: “Most people initially receive unrealistic returns from these firms to give the impression that their trading has been a success.
- “They will then be encouraged to invest more money or introduce a friend or family member and eventually the returns stop. Customers’ accounts are suspended and there’s no further contact with these firms.”
According to him, these scammers prey on people’s trust and greed to strip them of their life savings, and victims are thrown into perpetual poverty, while those that borrowed money to key into these schemes become indebted.
What to look out for
According to him, to avoid falling victim to fraudulent investment schemes, it is imperative to check the body regulating the investment company and ensure it is registered with the Securities and Exchange Commission (SEC).
- Ayeni said that one could also spot an investment scam once a firm uses pressure tactics, ranging from limited offers to timed gifts or rebates.
- He also noted that one should always be suspicious of any investment opportunities that promise a high return with little or no risk.
He, however, observed that many people get into these investment scams with unrealistic returns, knowing it is a fraud. This is with the hope that they are early enough to make some profits before it crashes. Ayeni said that the high number of investment fraud cases shows that Nigerians are not risk-averse.
The Director of the Bank Examination Department, the Nigeria Deposit Insurance Company (NDIC), Michael Oladele recently disclosed that no less than N911.45 billion has been lost to various Ponzi schemes and related frauds across the country in the last 23 years.
