Unlicensed entities scammed people by promises of astronomical interest rates in Maputo

Entidades não licenciadas burlaram pessoas por promessas de juros astronómicos em Maputo

Several people have been scammed in Maputo in schemes involving deposits with promises of high interest by unlicensed entities, leading the Bank of Mozambique to express ?concern about the proliferation? of these ?criminal? businesses.

One of the victims, a civil servant, told Lusa that her savings worth 100 thousand meticais ?evaporated? when an institution that she thought was legal ?disappeared? with deposits from dozens of people who put their money there with the promise of exorbitant interest.

With 100,000 meticais, they promised me interest of 100% in two months, but I was left without the capital and without the interest," he said, speaking anonymously, because now he knows he was involved in a crime.

The fact that this entity operates in daylight, in offices located in the center of Maputo, led many people to believe that it was an activity licensed by the Mozambican financial regulator.

?that company's premises were always full of people who went there to place their cash?

A man who also fell for the fraudulent deposit scheme narrated that he bet on a term deposit of 20 thousand meticais, to receive 60 thousand meticais, in three months, but lost everything, because the people who made him this promise disappeared.

?when suspicions began to arise, because the first people who were supposed to receive principal and interest only received interest, the owners of that institution stopped being seen in the office? he narrated.

Another victim said that dozens of people are looking for a woman who ran away with more than a million meticais in deposits, after convincing victims to hand over their money under promise of repayment accompanied by large loans.

What she promised was not payment with interest, but that each person who was part of the business would receive the payments from all the others at once, and then pay monthly until everyone in the group received. It was a 'rotating xitique', explained the woman, a circular model of deposits and loans, a typical savings model in Mozambique and neighboring countries.

The cases have emerged and led the Bank of Mozambique to issue a statement last week, expressing ?concern about the proliferation, in the market, of entities engaged in capturing deposits from individuals, without being licensed to do so?

The communiqué asks that, before making any deposit, investors or savers consult the list of authorized institutions on the Bank of Mozambique's portal - in the 'area of operation' section.

At the same time, the regulator listed 10 signs that should motivate mistrust.

The central bank made the alert for the usual profile of the hoax: ?Usually, institutions that act illegally in the financial area adhere to the financial pyramid scheme. They are characterized by the promise of short-term gains, usually in the form of interest on the amounts deposited?

The gains on capital promised by these unlicensed institutions are ?much higher than the market average and increase with the acquisition of more depositors," he warned.

The Bank of Mozambique also pointed out that the promoters use depositors to attract more customers, promising these intermediaries fat commissions: the entry of new people into the scheme makes it appear that the income for older depositors increases, but then the model becomes unsustainable.

One victim said she was attracted to this type of financial product by the expectation of easy high earnings, far above the interest paid on time deposits in licensed financial institutions and without bureaucracy.

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