What We Fail to Learn From Nigerian Ponzi Schemes

Ponzi schemes are not new to Nigeria, yet they continue to thrive with every passing year. The formula remains unchanged, only the names, faces, and formats evolve. 

From Nospetco to MMM, to CBEX and countless others, each new scheme promises unbelievable returns, and despite widespread awareness, people keep falling for them.

The uncomfortable truth is that many investors recognize the red flags. They know the returns sound too good to be true. 

They understand the risks. Yet they still choose to dive in, driven more by greed than ignorance. While some genuinely unsuspecting victims exist, the majority are fully aware they are taking a gamble.

Research supports this reality. Studies have shown that education does not necessarily protect people from falling victim. In fact, individuals with higher levels of education sometimes fall faster, believing themselves too smart to be scammed. 

Even more striking, research reveals that many people who have previously lost money to Ponzi schemes are still willing to invest again. Knowledge of the risks is often no match for the lure of quick, effortless profit.

Every time a Ponzi scheme collapses, blame is quickly passed around to regulators, banks, advertising agencies, and the government. All these institutions indeed have roles to play. Regulators must act faster. 

Banks must strengthen KYC processes and monitor suspicious activities. Media platforms must take responsibility for the schemes they help promote. New tools, like the SEC’s planned SMS verification system, could also make it easier for the public to check if an investment is legitimate.

However, no matter how tight regulations become, Ponzi schemes will never be completely eliminated. The reason is simple: no law can regulate human greed. Greed is the fuel that keeps Ponzi schemes alive.

Operators of these schemes use calculated strategies to attract victims. They offer extraordinary returns with little or no risk. They build appearances of legitimacy with registered companies, professional websites, and formal office spaces. 

They also exploit personal trust networks, convincing people through friends, family, religious leaders, and colleagues who unknowingly become ambassadors for the scam.

In a tough economy where hardship is common, the promise of quick wealth becomes even more seductive. 

Many people would rather cling to hope than accept the slow, difficult reality of building wealth over time.

If Nigeria is serious about reducing the number of Ponzi victims, investor education must become a national priority. Awareness campaigns need to move beyond occasional social media posts and reach into schools, workplaces, religious centers, and marketplaces. 

Banks must proactively report suspicious activities, not just wait for disasters to unfold. Easy-to-use verification systems must be promoted and widely adopted.

Yet, the most important step is personal honesty. Nigerians must confront the reality that no legitimate investment guarantees consistent high returns without extraordinary risks. When an offer seems too good to be true, it is.

Until greed is addressed at its root, Ponzi schemes will continue to thrive—not just because scammers exist, but because too many people willingly suspend their judgment for the chance at easy money.