How Do People Fall for Ponzi Schemes? Ask These 7 Nigerians

September 28, 2022

Ponzi schemes pop up every few years in Nigeria before disappearing again with billions of naira in people’s funds. We spoke to seven Nigerians about the times they fell victim to these schemes.

Joshua. 25

“I thought if it had been paying my friend for so long, it had to be be legit somehow”

I lost my job in 2020 due to the COVID lockdown and started looking for other means of making money. A friend of mine had been investing with this forex investment scheme for about six months, and he was being paid 20% every month. He’d tried to get me into it, but I was skeptical. 

After I lost my job, I needed money to come in from somewhere. I already had about ₦3 million saved up, so I thought to take some risk with the investment scheme my friend was into. I was still skeptical, but I thought if it had been paying him for so long, it must be legit somehow. So, I put ₦1 million into the scheme in October 2020 and I was paid a ₦200,000 return in November. 

The following month, they started having issues with paying out. They said the markets were down, but they had enough reserves to keep up with payments. LMAO. Nobody saw anything. After two months of nothing, people went to the head office of the firm to protest, and it was empty. That’s when everyone got to know what had happened. We’d been scammed. 

We eventually saw videos of the main guy who was the face of the business on the internet. Man was on vacation. I eventually got a much better job in March 2022, so I recovered.

Dapo, 22

“I saw my friend make ₦104,000 within two weeks after investing only ₦13,000. At this point, the pressure started getting wesser”

There was a stupid Ponzi scheme in my school one time that everyone knew was a scam but we somehow rationalised it as “investment”. It was called Loom. 

Loom had the structure of a bunch of concentric circles, just like this.

The whole point was that there’s a race to the center of the circle, and how fast you moved depended on how many new people you signed up. These new people would “invest” some money, and that funded the exit of older members. Once the outermost circle gets filled with eight people, the person at the center cashes out and leaves the loom so others can move up. These schemes were peer-to-peer and ran on Whatsapp groups.

When I first heard of it, I thought it was clearly stupid. But it quickly became popular in my school as people were investing as little as ₦13,000 to cash out ₦104,000 in the space of a few weeks. The pressure was hot. My friend changed his phone within a week of joining the scheme, and at that point I just thought, “Well, it’s just ₦13,000. Let me do it too.”

I think I probably have very badluck when it comes to get-rich-quick schemes because when everybody was doing it, they were eating good. But the week I joined, the admin of the group closed the group and all our money disappeared. I haven’t gotten an explanation till today. It burnt me because that was supposed to be a part of my allowance, but I moved on sha.

Jane, 24

“MMM promised me 30% returns, and I said ‘take my hostel fees’.”

You know how you get into university and you’re high on the amount of money you just started getting from home? That was me in 2016. I’d just started school and MMM was the popular thing. It wasn’t even just among students. I had way older cousins who did this thing. But never felt the need to do anything because I had money. 

My second semester started and money got a bit tight at home. I went from collecting ₦50,000 to collecting ₦25,000 every month. I started running out of cash too soon and found myself needing more before the month was up. That’s when I had a conversation with my friend who put some of her hostel fees into it and made about ₦60,000 in profit after a month. That was a 30% return on ₦200,000. My brain lit up. I decided I was going to do it too.

My hostel fees for the second year came early, and I put it all into MMM. This was around November 2016. In December, they stopped paying out money to people. The site became slower, people started panicking because they thought it would crash, and they were right. I lost all the money I put in without making ₦1. And on top of that, I was going to be homeless. 

Ruth, 27

“I knew it was a Ponzi scheme from the start, but I just wanted to cashout before it crashed”

I joined Racksterly in 2019 before they crashed and came back to life as Racksterli. It was clear to me that it was a Ponzi scheme from the start. But I just thought I had to be smart about joining them. I’m usually on the lookout for these things. 

The hack is to join when it’s early and leave when the hype starts gaining momentum. That’s what I did with the first one. I put in ₦1,200,000 and earned daily rewards for doing tasks like sharing an ad on Facebook. At the end of the month, I got ₦1.6 million in total. I reinvested my capital and did this for about five months before deciding I’d had enough. By that time I’d made over ₦2 million in profit alone.

In 2021, I joined Racksterli with about ₦2.8 million with the same plan and same calculations. I thought I’d be able to make it big before it went bust. LMAO. My calculations were off. The site blew up really quickly because they started using artists and influencers to promote the site. Within two months, problems started. 

People couldn’t withdraw their money, and it went viral online. That further fuelled the fear of people who’d put money in it and everything just scattered. 

I knew I had messed up, but I didn’t bother trying to get my money. 

It’s been a year and nobody has gotten their money back. I know I was greedy sha. I should have just enjoyed the money I made the first time and moved on.

Elvis, 32

“I thought I should take small risk and succeed”

Sometimes, looking for money too much makes you lose money. I did a crypto investment thing in October 2021. I wanted to “blow” and I felt like I was running out of time. So I thought I should take a small risk and succeed. That’s when I took most of the savings I had, ₦1.2 million, and put it in a crypto investment scheme that I found on a Telegram channel. They said I’d get 20% returns every month, and I could withdraw my capital whenever I felt like it. 

I invested in the thing, and I got a 20% return after thirty days. That was about ₦240,000. I was already gingered for more. I kept my money in and we did this for about 5 months. By this time, I had already put in an additional ₦1 million. I was basically reinvesting all the money I had made, as per, investor wey sabi.

When the market crashed around May/June, they started delaying payments. Some people received their pay while others didn’t. I thought it was normal. Until one time when one angry investor actually sent a message on the Telegram group asking everyone who hadn’t been paid to signify. I did that and left my phone for a bit. When I came back 30 minutes later, I had over 200 hundred messages from the group alone. I just knew everything had scattered. An argument started in the group between the members and admins, and they eventually just closed the group and deleted everything else. I took my L and moved on.

Chika, 35

“I was looking for something to invest in, but I didn’t like my options”

My case was funny because I saw an ad online in 2021 and actually went to look for these people. I was looking for something to invest my money in, and I didn’t like my options at the time. Mutual funds were offering 10% annually, bonds were doing 5%, and I didn’t understand crypto. But there was an agro-investment “company” that was promising 30% returns on a monthly basis for any investment I made. It looked like a sweet deal, and a part of my brain thought it made sense because it’s agriculture. 

The firm eventually went bust after 3 months, and I lost around ₦5 million. I took my L and moved on. It was a lot of money, but I knew better than to stress over something I’d never get back.

Right now, if I want to invest in anything and someone says 30% monthly ROI beside me, we’ll fight.

Jamal, 27

“Everything about it was giving Ponzi, but I didn’t mind”

I was introduced to 86FB by a friend. It was supposed to be an investment platform that focused on football, but everything about it was giving Ponzi. The main gist was that I’d be earning 3% interest daily, and that could translate into a lot of money depending on how much I put in. So I decided to do it with a little amount of money. I initially put in ₦10,000, but because I wanted more profit, I increased my investment to ₦100,000. My plan was to double the money and withdraw the profit. But when I’d doubled it and the thing hadn’t crashed, I reinvested the whole thing. 

The problem started with payment delays. I hadn’t been paid for about three days after requesting withdrawals. Then, they cancelled withdrawals. Last last, I made ₦600,000 that I couldn’t withdraw, and I lost my initial investment.


NEXT READ: How to Recognise a Pyramid Scheme from Afar


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