By Ivan Mwine
The Uganda Police in conjunction with the Capital Management have warned Ugandans about Alliance Global International and other private saving schemes that are not regulated by the Bank of Uganda and Financial Intelligence Authority (FIA) that they risk losing their hard-earned money.
The warning was echoed by Charles Twine Mansio, the Spokesperson of the Criminal Investigations Directorate (CID) and Miriam Musaali, the Director Legal of Capital Markets Authority (CMA), who were speaking during a press briefing on Monday, at the Uganda Media Centre, Kampala.
“Given the likely economic impact of Covid-19 on business enterprises and the economy, a number of people are bound to be desperate for survival owing to the spillover effects of the epidemic which include loss of jobs and reduction/ loss of incomes. We would like to re-assure all Ugandans that the Capital Markets Authority (CMA) is continuing to monitor all activities in Uganda’s capital markets to ensure order, fairness and transparency. Our primary objective remains protection of investors at all times,” Twine said.
He added that; “If you are not sure about a scheme’s legitimacy, contact the CMA or check the CMA website to confirm its existence before you place any investments with them. While investing in any product, avoid making direct payments to the scheme representatives. All deposits should be made through traceable financial channels such as commercial banks, and mobile money.”
He noted that 2,925 victims lost more than Shs41 billion through pyramid schemes and cybercrimes in 2019 and many more have lost money this year through gifting circles and the illegal financial advisory called BA Verve Cards.
Ms. Musaali on her part called upon Ugandans to watch out for saving schemes like Alliance Global International, which she said have exploited thousands of unsuspecting Ugandans.
“The Capital Markets Authority has warned Ugandans to be wary of a surge in economic crimes, especially illegal fund managers, and pyramid and ponzi schemes that are doomed to collapse,” Ms. Musaali said.
“The Capital Markets Authority (CMA) has noted with great concern that a company holding out as “Alliance Motion Global” is illegally offering shares and providing investment advice to members of the public,” she added.
Important things to consider before joining a saving scheme
According to the Capital Markets Authority, here below are very important things to look out before anyone considers joining a savings scheme in Uganda in order to avoid being cheated;
If the marketing of the scheme is too aggressive, i.e. making regular cold calls, numerous unsolicited SMS and WhatsApp messages, etc; and yet the firm’s representatives are not willing to address all the queries you have before you invest;
If the scheme claims to be licensed or approved by an Authority or agency unknown to you and cannot produce proof that they are licensed to operate in Uganda;
If the return on investment is “too good to be true”. For example, if they promise returns which are way above what the rest of the market if offering on the same product; or if they promise high daily/ monthly returns or dividends
If what you are buying or investing in sounds ambiguous and does not make sense to you;
If they ask you to make a down payment – usually an affordable sum of money so that they can register you or send information about their product;
If the scheme sounds like it is a causal-related scheme that aims to help disadvantaged or underprivileged people;
If the scheme’s major claim to legitimacy is their affiliation to influential persons in the political, religious or business space;
If the firm /scheme claims to be registered outside Uganda and has no clear operations as per the Ugandan laws;
If the scheme operators use force or intimidate you into investing in their scheme products.
Therefore, before investing through any scheme, always endeavor to establish that:
The sponsor of the product or security is licensed or approved by CMA or any other clearly known regulatory body in Uganda. An up-to-date list of firms/ schemes approved by the CMA can be accessed from our website, www.cmauganda.co.ug;
The sponsors or advisors provide you with balanced information about their product, which includes both the advantages and disadvantages of undertaking the investment;
While investing in any product, avoid making direct payments to the scheme representatives. All deposits should be made through traceable financial channels such as the bank, mobile money, etc;
If you are not sure about a scheme’s legitimacy, contact the CMA or any other financial sector regulator to confirm its existence before you place any investments with them.
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