Bank Fraud Schemes on the Rise in Samoa, Warns Commerce Ministry

The Ministry of Commerce, Industry and Labour (M.C.I.L.) has issued a stern warning against illegal pyramid schemes and “get rich quick” scams in Samoa. The move comes after the Central Bank of Samoa ordered the shutdown of Smart Finance Limited, a Savai’i-based investment company.

Pyramid Schemes: A Growing Concern

Pyramid schemes are prohibited in Samoa under section 65 of the Competition and Consumer Act 2016. These illegal schemes promise financial returns to members who pay an upfront fee for registration, with the guarantee that they will make money by recruiting more members.

• Despite high upfront fees, consumers are promised guaranteed returns, which is a classic characteristic of pyramid schemes.
• Pyramid schemes are illegal and can cost our friends and family their hard-earned tala.

Smart Finance Limited Shutdown

The shutdown of Smart Finance Limited, operated as part of J & J Electronics, was prompted by concerns that it was promoting an investment vehicle that promised investors guaranteed returns. The company’s owner, Busuyi Johnson Olarewaju, defended the business model, claiming it was a legitimate investment opportunity.

However, experts warn that pyramid schemes eventually collapse when the recruitment of new investors stops, leaving those who invested their money with significant financial losses.

Central Bank Intervention

The Central Bank is advising those who invested in Smart contracts to seek a refund of their investments. The bank will continue monitoring the accounts until everyone has received their refunds and ensure that all legal requirements are met by Smart Finance.

• The Central Bank has determined that Smart Finance Ltd needs to cease their investment operations and activities until they have sought proper Central Bank licensing requirements for these investment activities.
• The bank will monitor the accounts until everyone has received their refunds and ensure that all legal requirements are met by Smart Finance.

The Growing Problem of Financial Fraud Schemes in Samoa

This latest development highlights the growing problem of financial fraud schemes in Samoa, with many investors being duped into putting their money into illegal pyramid schemes. As such, it is crucial for individuals to be vigilant and avoid investing in schemes that promise guaranteed returns or require high upfront fees.

Tips for Investors

• Be wary of investments that promise guaranteed returns.
• Avoid investments that require high upfront fees.
• Do your due diligence before investing.
• Report any suspicious activities to the authorities.

The Ministry of Commerce, Industry and Labour has warned that these schemes are illegal and can result in significant financial losses for those who fall victim to them. It is essential for investors to be aware of the risks involved and take necessary precautions to protect their investments.