CAPITEC has closed 2 000 bank accounts linked to the Ponzi scheme MMM.
Capitec CEO Gerrie Fourie told Fin24 on Friday that the drastic action was taken to protect the bank’s clients.
“The Ponzi scheme MMM had a big impact on us,” he said.
A Ponzi scheme is an organisation that operates through fraud. Investors are tricked into thinking they can get quick returns on their investments. At first the organisers do pay people out, encouraging others to invest. Eventually the scheme collapses and the organisers flee with the remaining money.
Fourie said that after becoming aware of the scheme, the bank monitored the MMM transactions, before freezing the accounts early in 2016. “We actually closed over 2 000 accounts involved in the scheme,” he said.
“Some of the clients became extremely violent and we had to bring in security guards.”
Fourie criticised the South African Reserve Bank for not acting faster, after it informed them earlier this year about MMM. “It is important for the regulators, when we inform them of certain things, that they react much quicker, to make certain that people are protected,” he said.
“We reported MMM and it took four or five months before we got an answer,” he said. “We would like to see Sarb and banks working together to make certain we protect our clients.”
http://www.fin24.com/Companies/Financial-Services/exclusive-capitec-has-closed-2-000-mmm-bank-accounts-20160530
