Private Legal Practitioner, Christian Malm-Hesse has stressed the need for financial sector regulators – Security and Exchange Commission (SEC), and the Bank of Ghana (BoG) to be proactive and swift in dealing with the issue of money doubling in the country. And that, the situation is becoming rife and poses huge threats to the financial sector.
Mr. Malm-Hesse, aired his opinion on TV3’s New Day show where he posited that regulars in the financial sector are not doing enough to swiftly tackle that canker that is rapidly inundating the financial sector.
“Money doubling is becoming a growing canker and if authorities do not act, it will become something else. The enforcers (i.e. the regulators) are not doing enough to deal with these people.”– Christian Malm-Hesse
The concept of money doubling has been a major issue in the financial sector since time immemorial, where the perpetrators who often present their products in the form of derivatives or huge interest on depository accounts promise investors to doubling their money for them. These juicy offers always lure the vast majority of people who are desirous of making huge returns on their money within the shortest possible time. In the long-run, the depositors or investors normally end up losing their money in these schemes due to their collapse or the perpetrators abscond with these peoples’ money. In some rare cases, the perpetrators pose as spiritualists who have the power to double peoples’ money for them.
Some of the money doubling schemes that have countenanced outright rejection and rebuff from the regulators over the years are menzgold, cryptocurrencies, and now, CHY-mall. Oftentimes, it is too late for many victims to realised the deception and fraudulent activities of the so-called money ‘doublers’, and they become helpless at the hands of such people who perpetrate these acts using radio, television, billboard publicity, and social media.
Last year for instance, the Minister of Information petitioned the Bank of Ghana and the National Media Commission about the activities of money ‘doublers’. In response, the Bank of Ghana served notice to all media outlets not to allow the broadcast of illegal money doubling and credit card loading schemes on their platforms, since they have not been duly licensed to engage in that business.
The BoG in a statement explained that “Money Doubling”, “Card Loading” and “Credit Card Loading Systems” amount to deposit-taking, under the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) and under Section 4 of Act 930 only entities licensed by the Bank may carry out deposit-taking business.
“By this notice, the Bank of Ghana informs the general public that the Bank has not licensed any entities or individuals engaged in ‘Money Doubling’, Card Loading’ and ‘Credit Card Loading Systems’. The said individuals and entities in question, commit an offence and will be required to return all funds received,”
“Members of the public are reminded to place deposits only with institutions licensed by the Bank of Ghana, in order that they may be accorded the protection available under the banking laws.”
“The Bank of Ghana wishes to notify all media outlets including radio, television and online channels NOT to permit the advertisement of ‘Money Doubling’ and ‘Card Loading’ or ‘Credit Card Loading Systems’ on their platforms. The media is encouraged to verify the licensing status of such entities with Bank of Ghana, before advertising their products and services. The general public is encouraged not to engage in such activities and to report such illegal activities to the Bank of Ghana”– Bank of Ghana.
The act of money doubling has the potential of ruining the financial system as people may become disillusioned, loose trust in the financial system, and become unwilling to deposit in any financial institution; and this may cripple the smooth operation of the financial sector.
It is on this basis that Mr. Malm-Hesse stated the need for regulators to liaise and work together to properly regulate the financial sector. And that, the regulators need to be proactive by enacting laws to regulate various forms of financial activities such as cryptocurrency and other forms of derivatives in order to avert any potential fraud with these instruments.