On one shiny Monday morning, a 21-year-old young man left his home in search of a job opportunity – he had learnt through a social media platform – in Lahore’s Defense Housing Authority (DHA). When he reached there, he was greeted by some ‘foreign’ citizens, who asked him to hand over his identity card first. He was offered a ‘hefty’ amount as salary on a monthly basis and asked to work on a chatting platform posing himself as a girl to those persons who take interest in chatting.
After working for a few days, the young man learnt that they had built such an online system that any person could be deprived of his finances if he was trapped through chatting by young boys who used to present themselves as girls. The young man stated that they were asked not to tell their location to anyone while working there. Sensing danger, he quit the job after a few days. This is a novel form of digital fraud similar to many others.
Digital mafias are busy luring ‘unprivileged’ citizens into various scams by offering them exorbitant profits and earnings against meagre investments and petty jobs. Their modus operandi is simple. They put enticing advertisements in the social media with claims of offering money on a daily basis against marginal investments. NFT – a Ponzi scheme – is getting ‘famous’ in Pakistan, for making payments in dollar currency to those investors, who make an initial investment of almost Rs 15000/-.
SECP issues a warning to public about perils of investing in Ponzi and pyramid schemes
The company has been working since 2022 and offering ‘generous’ rewards on a monthly basis. Like other Ponzi schemes, NFT is paying existing investors with funds collected from new investors. Usually, this goes on for few years and after that such sites vanish all of a sudden devouring all investments made by the citizens. Reportedly, data compiled by Ponzitracher showed that 66 Ponzi schemes were uncovered in 2023, which were nearly double the amount of the schemes uncovered just two years ago in 2021.
In today’s world, individuals who seek quick and effortless paths to grow their wealth often fall prey to the Ponzi schemes. These deceptive ploys are orchestrated by unscrupulous individuals who take advantage of people’s mindset, promising substantial returns on investment and ensnaring the public. With the rise of the digital era, these fraudsters can easily conceal their identities while swiftly depriving hardworking investors of their earnings.
Amidst the rise in fraudulent schemes, the Securities and Exchange Commission of Pakistan (SECP) has issued a warning to the public about the perils of investing in Ponzi and pyramid schemes. Adding complexity to the investigation, the masterminds behind the scam are reported to be dual nationals residing in foreign countries. In response, SECP has disclosed a list of companies engaged in unauthorized activities, such as illicitly gathering deposits from investors through false promises of unusually high returns.
The scheme lures investors with the promise of incredibly high, and often unattainable, returns on their investment. Legitimate opportunities offering such high returns are scarce, so the scheme relies on using new investors’ money to pay off earlier investors. Eventually, the scammers vanish, fleeing with the investors’ funds and leaving a trail of victims in their wake. The plethora of such cases highlights how effortlessly deceitful individuals exploits the masses.
It’s imperative to set an example by holding these fraudsters accountable for consistently deceiving the public. Despite inherent challenges in investigating these cases, prosecutors must exhaust all avenues, including leveraging existing extradition treaties and issuing warrants for the masterminds who are evading justice in foreign nations. The public should exercise caution when encountering schemes promising unreasonable profits in exchange for investments. Verifying credentials and promptly reporting any suspicious activities to the relevant authorities is crucial.