CBL warns of resurgent fraudulent schemes



MASERU – Central Bank of Lesotho has warned the public against illegal financial activities that have sprung up amid the COVID-19 crisis in the country. Ephraim Moremoholo, Public Relations Officer at the Central Bank of Lesotho said this week companies running illegal activities are taking advantage of financial challenges people are facing as a result of the nationwide lockdown enforced by the government to combat the spread of the pandemic. Many have lost their jobs or taken pay cuts, while many SMEs have either closed or are struggling to stay afloat.

Moremoholo said these illegal activities are meant to defraud the public of their hard-earned money by luring them to invest in fraudulent schemes with the promise of abnormally high returns. “These illegal schemes usually take the form of pyramid schemes (commonly known as push-push), benevolent ‘donations’, foreign exchange trading, cryptocurrencies, stokvels and other money circulation schemes. “Members of the public are therefore advised to desist from investing their hard earned money with illegal financial institutions that are not licensed by the Central Bank of Lesotho,” he said.

As the financial sector supervisor and advisor to government and the people of Lesotho on economic and financial matters, CBL continuously monitors the environment to determine risks and opportunities that may impact, both negatively and positively, the stability of the financial sector, he noted. He said it was during the execution of these mandatory processes, as well as through other sources of information such as public enquiries and social media, that they noticed an increase in the promotion and operation of unlicensed financial institutions in the country hence the warning.

Moremoholo said the public should demand from these entities a valid licence issued by any authorised Ministry or department or agency of government, along with the one issued by the Central Bank of Lesotho to verify its authenticity and legality before they can join its dealings. Moremoholo noted that in other cases, a license is issued by the Central Bank alone. “The CBL license, among others, can be identified by the following features: a logo of the Bank duly signed by the Commissioner of Financial institutions or Regulator; and shows dates of issue and or expiry/validity period.

“This license shall be displayed in the office of the institution offering financial services. If not visible, client/customer can demand the service provider to confirm registration. “Verification can also be done with CBL in case of doubt on the legitimacy of any provider of a financial service at 22232094/2461/58880647,” he said. He added that reference can also be made to CBL’s website and its social media platforms, for further information on the list of licensed financial institutions: www.centralbank.org.ls/ https://web.facebook.com/CentralBankofLesotho.

He added CBL has and continues to work jointly with other law enforcement agencies such as the Financial Intelligence Unit (FIU), the Directorate on Corruption and Economic Offences (DCEO) and the Lesotho Mounted Police Service (LMPS) to track and bring perpetrators of such illegal activities to justice. Operation of unlicensed financial institutions is illegal, he said, therefore perpetrators of such acts can be prosecuted for contravening the Financial Institutions Act, 2012, Money Laundering and Proceeds of Crime Act, 2008, and the Penal Code Act, 2010. He said it was regrettable that the majority that may have lost money will prefer to keep such information private which makes it is very difficult to determine where the rest of the money goes.


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