Its Ponzi Scheme again, this time, it came as Pxes.
Nigerians appear not to have learnt enough from the repeated collapse of investment schemes that promise extraordinary returns.
The latest case involving PXES is another painful reminder of how quickly the desire to make money can override caution. Investors reportedly put between tens of thousands and millions of naira into the platform after being attracted by returns said to range from 25 to 50 per cent, with some packages reportedly offering as much as 120 per cent.
For some investors, the attraction was not simply the promise of huge profits. It was social proof.
People saw friends, customers or colleagues receiving payments and concluded that the scheme was legitimate. Once early investors were paid, confidence grew. More people joined. Some reinvested their earnings or committed larger amounts.
That is one of the oldest tricks associated with Ponzi schemes: paying some participants early can create the appearance of a successful business and encourage others to bring in more money.
The PXES experience also raises another important question: why would anyone believe that an investment could consistently generate returns as high as 50 or even 120 per cent?
High returns are not automatically proof of fraud. But exceptionally high and seemingly regular returns should trigger serious questions about where the money is coming from, what the underlying business is, who regulates the operation, and whether the promised returns are economically realistic.
There is also the problem of financial desperation. In an economy where salaries struggle to keep pace with living costs and many people are searching for additional income, an offer of quick and substantial returns can be difficult to resist.
Then comes the power of testimonials.
“My friend invested and received his money.”
“I have been paid every week.”
“Look at my account balance.”
Such evidence can feel more convincing than official warnings, especially when the person making the recommendation is someone we know and trust.
But a person receiving money from a scheme does not necessarily prove that the underlying investment is sustainable.
The painful part of the PXES case is that some victims reportedly invested money they could not afford to lose. One investor reportedly put N200,000 into the platform after seeing three friends receive returns, while another said he invested N65,000 only for the platform to become inaccessible shortly afterwards.
The reported looting of PXES offices in Adamawa and Kogi also shows how quickly financial losses can turn into anger and desperation.
But the bigger lesson should go beyond PXES.
Before putting money into any investment scheme, Nigerians need to stop asking only, “How much will I make?” and start asking, “How exactly will this money be made?”
Who owns the company?
What does it actually do?
Who regulates it?
Where is the investment going?
Can the business model survive without new investors bringing in money?
What happens if withdrawals suddenly stop?
If those questions cannot be answered convincingly, the promised profit may not be worth the risk.
The tragedy is that Nigeria has seen this movie many times before. MMM, MBA Trading and Investment, Ultimate Cycler, Chinmark, Forsage and several other schemes have left thousands of people counting losses.
Yet each time a new platform appears with a convincing story, attractive returns and early success stories, people line up again.
Perhaps the lesson Nigerians have not learnt is not simply “don’t invest in Ponzi schemes.”
If an investment opportunity sounds too good to be true, don’t let somebody else’s successful withdrawal convince you that it is safe.
