There is no law regulating financial schemes like the pyramid schemes
Members of Parliament have expressed concern over increasing fake financial schemes through which Ugandans are defrauded with promises of making quick profits.
The youth MP for the western region, Mpaka Mwima, Gomba woman MP Silvia Nayebare, and the Kumi County MP Silas Aogon addressed the media on Friday at Parliament during which they called upon government to swing into action and ban these schemes.
The MPs’ call for immediate action from government is premised on a report from Criminal Intelligence and Investigations Directorate (CIID) Cyber Crime Unit, which points out the various scams of companies and individuals who fleece Ugandans of their money.
The MPs said they are working on a motion which they would present before Parliament in the course of this week for Parliament to pronounce itself on the matter.
“Most of the people defrauded are the youth and women. This fraud of pyramid schemes must be stopped by Government. When one scheme collapses, the same individuals form another one. The culprits must be arrested by government,” Nayebare said.
Mwima stated that the since there is no law regulating financial schemes like the pyramid schemes, there is need for government to come up with a law to regulate such businesses.
“Right now we are using the Computer Misuse Act and the Penal Code Act which are not adequate to deal with these new ways of defrauding people,” Mwima argued.
Last year, Bank of Uganda cautioned the public against getting involved in such schemes.
The MPs listed some of the companies they said need to be investigated by government and be held accountable. Some of them include Inofunds, Amazon Traders, Busycoin, Firstcoin, Prosperity Club, Global Finance, Emaar Ventures, Excel Wealth Corps, 99 Traders, Zinc 7, Quastra World, D9 Club, Development Channel, Onecoin, and Adfast.
The MPs revealed that the report they got from CIID indicates many of the culprits have been apprehended and others are being investigated after their victims reported to Police.
“It is important to note that most of the pyramid schemes in Uganda are hosted online and these websites are developed by ICT experts who sale the same to the proprietors to market fraud. Once the business succeeds in getting victims, the proceeds are shared between the proprietor of the fraudulent company and the developer of websites,” Mwima explained.
In most of these pyramid schemes, members are promised to get huge profits continuously and they are required to recruit new members to earn more.
The minister for investment, Evelyn Anite, told New Vision that her ministry has already swung into action against some of these companies and they have so far closed three companies including Development Channel.
“We have frozen the accounts of Development Channel. The owner is a Nigerian. He is under surveillance by Police. I asked him why he does not go and help his people in Nigeria who are poor. I told him to stop the illegality. We will not allow these pyramid schemes to operate in Uganda,” Anite stated.
The minister said they would do everything possible to ensure that the victims whose money has been taken are refunded by the culprits.
Anite revealed that last week, she directed the Financial Intelligence Authority and the Capital Markets Authority to sensitise Ugandans against the fake financial schemes.