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A deliberate policy action to stop Ponzi and Pyramid schemes from rebranding and continue their operations is needed, says Bankers Association of Zambia.

A Ponzi scheme is a fraudulent investment scam promising high rates of return with little risk to investors.

On the other hand, a pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of product.

BAZ Public Relations Officer, Mirriam Zimba, observed that Ponzi and Pyramid schemes were in the habit of re-branding and coming back with a similar product under a different company name.

“There are a lot of organisations that are Pyramid or Ponzi schemes, and the moment they are flagged, there may be need for a deliberate policy action to stop these companies from simply re-branding and continuing their operations.

“This is because they re-brand and come back with a similar product under a different company name,” Ms Zimba said in an interview.

Ms Zimba believed that having a regulation in place would protect consumers.

“We need something which is regulatory in nature either from the Ministry of Finance, the Bank of Zambia or other regulatory bodies.

“We are calling for enhanced public awareness but also need support to be backed by policy so that if a company is known, it should be able to be flagged completely and not rebrand or operate illegally,” she said.

Meanwhile, BAZ Fraud Prevention and Security Committee Member, Saviour Musonda, recently indicated that Commercial banks were working around the clock, enhancing security while others were changing systems in an effort to fight fraud.

Mr Musonda said fraud was revolving and becoming sophisticated each day and therefore mitigating it needed concerted effort.

He said institutions were alive to the risks associated with fraud and were working around the clock, enhancing security controls, while others even changing systems.

“With the sophisticated network behind The Internet of Things, many have suffered the reality of what it means to be scammed or simply defrauded.

“While some have awakened to a shudder in their daily lives, the majority have simply described it as a tragedy,” he said in his write-up on fraud in Zambia.

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