Scams in Nairobi have been on the rise. A previous article about hyped investments on this blog remains relevant today. Beyond financial scams, there are other scams that still negatively impact an individual’s bottom line. In her book, Happiness for all?, Carol Graham states that costs of poverty go beyond lacking physical resources and are more about stress, insecurity and lack of hope. The lack of hope is made worse by social media which enables comparison between the ‘haves’ and the ‘have nots’. Such interactions lead to desiring quick wins, instant wealth and willing to try anything to get there. Scammers with fake rugs-to-riches story are having a field day with such people on and off social media.
From forex trading training, sale of trading bots, sale of fictitious land to flashy influencers faking their life on instagram to attract young people keen on making quick money, there are people out here who have perfected this art and are mostly targeting the youth – a vulnerable group due to their impatience and time inconsistent preferences. The interview below summarises a few common ones flagged by Llewellyn Ouya.
Common Scams:
Forex trading (sale of bots & training) – On @Kafuri_fx verified page on instagram, you’ll see him posing with various high end cars, pictures of his successful forex trading classes and him casually holding hundreds of thousands in cash and attributing it all to forex trading. The youth buy into the fake curated life style and are ready to invest to become rich like these influencers. Due to the hopelessness in their lives – high unemployment rates, poverty – this looks like a low hanging fruit to them. Kafuri’s classes are free, designed to attract as many people as possible and hopefully get a few willing to take the conversation further. They convince their followers to get a trading bot that will help them trade better and earn lots of money. Such people make easy money by selling bots as sure bets and offering trainings. Other such influencers are @_kenyanprince, @spongebob.fx._ all instagram verified pages. What role can consumer protection play here?
Job Scams – For instance, posting fictitious vacancies that target desperate job seekers. After making an application, the job seeker receives a response that they’re are a good fit. The response is accompanied with a list of documents or materials that you need before starting the job and an option to send the person money for facilitation of those requirements. On sending the cash, they go silent – obviously! Another job scam involved First Choice Recruitment Agency that allegedly conned 8000 youth from Uasin Gishu between Kes. 40,400 to Kes. 150,000 each claiming it would help them secure jobs abroad or opportunities for further studies. The victims said they had seen local leaders at the launch of First Choice agency which built their trust in the agency. Later, the victims complained bitterly to the leaders – having sold their assets e.g. land, taking loans and their life savings only to discover it was a scam.
Digital marketing scams – Using web based channels e.g. instagram, facebook to market non-existent products to potential customers or fake products. The prices are extremely affordable which in most cases attracts victims. They also pretend to have physical shops to win trust. They ask their customers to pay first (pay with order) for the product to be delivered and disappear after receiving payment. Online marketers also give false information about products i.e. quality and quantity. Upon delivery, what you get vs what you ordered is completely different – not forgetting their harsh terms and conditions like no refunds and returns. Others mentioned were Aim Global, a direct marketing company that seeks investors to buy their products and introduce at least 3 people before getting the said products.
Medical scams (fake laboratory results) – A medical clinic in Kariobangi called CEFI targets patients who have gone to the hospital for treatment. Blood, urine and stool samples are taken but no tests are done as they do not have a laboratory. They then provide fake results and prescribe expensive medicine that can be purchased from their pharmacies. That’s how they make their money. There is no regard to the patient’s condition, medication side effects and the consequences of non-treatment.
Kamiti prison scams – These scams have been around for a while. Inmates working with prison officials call and text unsuspecting customers requesting for money for relatives, children in school or informing them that they have won a bet or a competition and they just need to send some money. The scams keep changing once the market starts flagging them. According to a recent news article, it seems various parties both inside and outside the prison are involved to make it seamless.
Land scams – Unsuspecting customers buy land that is on road reserves, or belongs to others, are promised title deeds in the future but the arm of the law gets to them first. Their loss is two fold – initial cost of the land and demolition of homes they’ve built as seen below. They are left with stress, mortgages and land loans to pay as they hustle to get a place to stay. There is no form of consumer protection for such people leaving them to face the consequences alone.
The scams in Kenya are diverse. They do not sit under one regulatory body and there’s no central complain centre where affected individuals can report. In fact, most individuals end up not complaining since they believe nothing will be done – the fraudsters will just bribe their way out leaving citizens with losses that loom large in their lives which is unfair. There is need for consumer protection for investments and also policies that protect vulnerable groups who easily fall into dark nudges. In the mean time, raising awareness and issuing alerts may help the buyers to be aware.