All that glitters is not gold

Thousands of would-be investors are counting the costs after another Ponzi scheme collapsed, leaving a flood of tears.

It is not the first time that such a scheme has collapsed. It will certainly not be the last. More will come in various forms disguised as investment platforms and one seeking partners or employees.

The collapse of E-Creator would not have come as a surprise. The signs were everywhere with critics warning the unsuspecting public of the dangers of putting their hard earned monies in such a scheme.

But the company had charmed the public with offices at a prime location in one of the most sought after places in Harare’s central business district.

It was also getting prime spaces in newspapers and airtime on television. It seems the brains behind the million-dollar heist had invested in perception management, hiring top local social media influencers in a bid to win

the hearts and minds of “employees”. And it worked. The arrest of E-Creator team Zhao Jiatong, Trymore Tapfumaneyi and Justin Kuchekenya and their appearance in court will lift the veil on the operations of the company and how thousands would have been scammed.

The collapse of E-Creator comes barely two years after another fraudulent scheme, Beven Capital, left over 2000 people stranded after salting away with about US$20m.

Like what happened during MMM and Beven Capital, authorities were slow to react.

The regulators in the financial sector were caught napping. While there were questions on the operations of E-Creator, they did not take action until after the company had closed shop.

The Financial Intelligence Unit (FIU) last week sprang into action pointing out some red flags investors should look at before investing their monies.

While the action by the FIU could be akin to closing the stables while the horses have bolted, it will go a long way in educating citizens on the dangers of investing in too good to be true schemes.

Work is cut out for regulators such as the Reserve Bank of Zimbabwe, FIU, the Securities Exchange Commission of Zimbabwe and the Insurance and Pensions Commission to educate the public on what to look out for when choosing investment platforms.

There have not been any serious awareness campaigns hence the sprouting up of pyramid schemes, salting away millions. The authorities should roll out programmes on the red flags to look for when presented with investment options.

The police have asked those that lost money to come forward which would help the law enforcement agents to carry out their investigations.

There is nothing to be ashamed of in giving the police the right information. The buck also stops with those that lost their hard earned money. If something seems too good to be true, it probably is a scam. They should take this as a learning curve and when such Ponzi schemes resurface in future, they will run away with their hard earned money. Once bitten, twice shy.

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