Loading...

MMM scam victim warns of renewed hype, scare tactics

Jul 10 2017 13:04
Matthew le Cordeur

Cape Town – A victim of the MMM scam has issued a warning that the online scheme is growing through its rebooted pyramid in South Africa, while those who lost thousands of rands are verbally abused for speaking out.

MMM shut down last year as users failed to feed the bottom of the pyramid with points collected from cash donations from members. It is unclear how much money South Africans lost in the scheme, as many are too embarrassed to speak out. In any case, they have no legal recourse against the scheme.

When people stopped donating and the points dried up last year, MMM simply froze the system and called the accrued points “Old Mavros”. It then relaunched a new MMM in 2017, with a completely fresh pyramid to work from.

Old Mavros can be retrieved by giving more money to others in the rebooted system. For every R100 you give to someone else, you are supposed to get R10 back in points from the old MMM. This concept does not make sense and is not working, according to a victim of the old MMM scheme. The name of the victim, which is known to Fin24, is being withheld for safety reasons.

Kissing Old Mavros goodbye

He told Fin24 that he has decided to write off about R65 000 after realising it is game over. Other friends have lost over R100 000, he said.

“They told us we would get our money back in three months, then they said six months and now it’s been one year and four months,” he said.  “I am writing that money off. All the Old Mavros are lost.”

Now, he said door-to-door salespeople from the new MMM come to his business premises looking for new recruits. “They are promoting heavily,” he said. “There are currently 143 schools for guiders to teach MMM to get new members.

“With all the new people in the scheme, it is strong again. What will happen if it crashes again?

“I am sick and tired of people being played for fools,” he said. “There are new members with the audacity walking around and getting new members. Yet, existing members have nothing to show after last year. No one can go to the police – we were the dumb nuts investing in this.”

He said there are many disgruntled members who are too scared to speak to the media, because they get bullied by members higher up in the pyramid.

“I was kicked off the MMM WhatsApp group two days ago,” he said. “Before that, they tried putting me on a guilt trip and said if I went to the media I would be responsible for someone not getting to school or a heart transplant.”

Understanding MMM

While the collapse of a normal pyramid scheme would have seen serious consequences, the online structure of MMM is so alternative that it can set its own rules. No financial or government regulator currently has shown authority over the Russian-created site.

While the Hawks have begun investigating MMM, a group of users took the matter to the Pretoria high court in 2016, where it seems to have sat in limbo. Hawks spokesperson Brigadier Hangwani Mulaudzi told Fin24 recently that they cannot act until that matter is resolved.

With MMM, users can get points on the online platform for giving money to others (mostly via the users’ personal bank accounts), promoting the scheme on social media, or recruiting members any way they please.

These points can then be used to seek larger amounts of cash from other users. That’s how people see growth of between 30% and 50%. The higher up you are in the hierarchy, the more points you earn and the more you can ask for.

Growth circulates via points among users in the closed system. The only way to keep the growth occurring is to keep getting more users giving cash to add their points at the bottom of the pyramid. Users at the top of the pyramid are able to milk the system, making millions from the users at the bottom, the “dumb nuts” who eventually lose out.

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter:


Follow Fin24 on Twitter, Facebook, Google+ and Pinterest. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

mmm  |  scam  |  pyramid scheme

NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Are you participating in #BackFriday sales?

Previous results · Suggest a vote

Loading...