Morocco’s central bank, Bank Al-Maghrib (BAM), and the Moroccan Authority for Capital Markets(AMMC) released on Monday a joint statement warning against pyramid selling and ponzi schemes.
The press release noted that despite past warnings from the two institutions, companies continue to obtain money from consumers by promising “exceptional” results.
The release pointed to the internet and social media in particular as places where these shady companies continue to put unrealistic promises, incentivizing users to invest money in products or services.
Any activity which asks citizens to invest money or enroll in investment schemes has to be licensed by relevant authorities, the statement said, urging citizens to diligently check for any missing licenses or certifications when asked to invest money.
Such research can be done through the two institutions’ websites where a public registry of licensed companies is available, the press release specified.
It warned citizens against investment schemes that promise “exceptional” returns that are much higher than other available options in the market.
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Bam and AMMC specifically warned against Ponzi schemes, where investors are promised unrealistic returns, while the money being paid out to older investors is only coming from newer contributions, without a sustainable product to keep business afloat. The two institutions urged citizens to be alert to companies that continue to engage in this “illegal and predatory” practice.
The press release concluded by warning against pyramid schemes, reaffirming that it’s also illegal in Morocco. Pyramid schemes, also known as multi level marketing schemes, involve companies getting profit not by directly selling to customers, but instead by marketing to regular people to act as their salespersons.
For a regular person to make a profit in such systems, they need to recruit other salespeople, making them more vulnerable also to bear the brunt of the losses if they fail to do so.
SOURCE: Morocco news
