Money Week spotlights illegal schemes

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Deputy Govenor Dr Masilo Makhetha
Deputy Govenor Dr Masilo Makhetha

Bereng Mpaki

THE Central Bank of Lesotho has underscored the need for financial education to protect the integrity of the country’s financial sector from the challenges posed by criminals.

Acting Central Bank Governor Dr Masilo Makhetha made the call this week during the launch of the 2016 Money Week campaign in Maseru.

He identified the depositing of counterfeit money into mobile money platforms and the proliferation of illegal investment schemes as major challenges besetting the country, adding there was need for financial literacy and inclusion to mitigate their negative effects on the country’s economy.

Now in its fifth year, the two-week campaign, which is held in collaboration with financial institutions and other partners, is aimed at promoting knowledge and skill of handling financial issues by the populace and ensuring they are included in the financial system.

Held under the theme “Take Part, Save Smart,” this year’s campaign seeks to raise financial awareness through various interactive activities targeting different sectors of society.

The activities include school competitions on financial matters, dissemination of messages through mass media and round table discussions among stakeholders.

“The 2016 campaign held under the ‘Take Part, Save Smart’ theme comes at an opportune time when we are living in an era characterised by an unfortunate emerging trend where criminals take advantage of the ignorance of some members of the public about financial issues,” Dr Makhetha said.

“Notably, this campaign, under the above-mentioned theme, comes at an opportune moment when criminals are out to defraud the public of their hard earned financial resources. For instance, there are reported cases of attempts to deposit counterfeit currency into mobile money accounts at some agents’ stores and subsequently withdrawing good money from other agents’ stores. In case where this is successfully executed, agents do lose money,” Dr Makhetha said.

He said the second group of criminals promoted illegal investment schemes intended to defraud the public by luring them with a promise to repay their money at very high rates of return such as pyramid and other money circulation schemes.

“The most common financial crime comes in the form of illegal investment schemes, which promise excessively high returns to attract unsuspecting investors; and then defraud them of their savings. Therefore, I would like to take this opportunity to, once again, warn members of the public that these activities are not only illegal, they are designed to deceive.  “Forewarned is forearmed”, don’t fall victims. (I know temptation can sometimes be high, say NO!),” he added.

Dr Makhetha indicated the scams had the following characteristics which made it possible for an informed public to identify them:

  • They are not licensed to operate in Lesotho;
  • They promise unusually high returns;
  • Their underlying product is unclear;
  • The manner in which they are administered is complicated;
  • Their identity in terms of ownership, physical address, and financial details are usually obscure;
  • Their transactions do not offer any legitimate documentation in the form of share certificate that gives the transaction legal standing; and
  • Any other details that suggest that the entity is questionable.

“In light of this, I would therefore take this opportunity to once again alert members of the public that these activities are illegal and negatively affect the economy,” he said.

The acting governor said it was in the general public’s interest to “save smart” by dealing exclusively with licensed financial institutions and desist from investing in illegal entities such as pyramid schemes and other money circulation schemes.

For his part, Standard Lesotho Bank Chief Executive Mpho Vumbukani said the Money Week also helped create public awareness on the financial services offered by different financial institutions in the country.

“Knowing what financial services are available for the people makes it easier for them to make informed calls on their financial matters,” Mr Vumbukani said.

 

 

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