WSU ACADEMICS SHED LIGHT ON THE MECHANICS AND DANGERS OF PONZI SCHEMES

A study by two WSU academics, Dr Oyewumi Agunbiade and Professor Enongene Sone delves deeper into how Africans can identify and avoid being swindled through the ever-changing tricks of Ponzi schemes.

In the research titled “Ponzi Schemes as Africa’s Twenty-First Century Shylocks,” published in the Africa Today, the researchers embark on a historic unravelling of the Ponzi scheme by tracing it to sixteenth-century Venice where lending and interest were a major concern.

“The research aims to address new trends in social engineering and the lack of previous research focusing on African contexts. Additionally, it seeks to respond to the cries of individuals who have suffered losses due to Ponzi schemes,” said Agunbiade.

The scholars aim to provide Africans with cyber and literary intelligence as Ponzi scammers often use online platforms to deceive victims. They believe their research findings will reduce Ponzi fraud incidents.

According to their findings, scammers have a classical reputation for being villains: vicious, controversial, problematic, paradoxical, manipulative, and vindictive. The name shylock thus personifies anyone exhibiting these attributes while intending to lend money at high interest and hoping to collect more from desperate borrowers. 

“In this study, such acts have been established as the foundation of Ponzi schemes; however, in Ponzi schemes, instead of lending, the schemer receives deposits and in turn promises a high rate of return, which serves as bait for gullible investors. This is a clever revision of exorbitant scripts and principles, described by Mervyn Lewis as new dogs with old tricks,” said Sone.

Agunbiade and Sone added that Shylocks are also seemingly generous and willing to help financially in a time of need, but are cancerous as they take more than they bring to the table in the long run. The same is the attitude of perpetrators of Ponzi schemes towards money.

“The findings also indicate that Ponzi schemes target when there is a pressing need by an individual, community or nation. By pressing need, this does not mean only a time of recession as it applies to both cash crunch and abundance time. Hence, such time requires utmost care and intelligence against schemers,” said Agunbiade.

Agunbiade and Enongene concluded that the responsibility is on African literary artists to convince the African masses about these connections. Most existing works on Ponzi schemes are in the social sciences, which have been unable to keep Africans from falling for the irresistible return on investmentof Ponzi schemes.

“To preserve its place among world literatures and cultures, African literature and its writers need to bridge this gap with creative dedication, which will result in works capable of enlightening the people against Ponzi and other get-rich-quick schemes,” said Agunbiade and Sone.

By Anita Roji