Capitec Shuts Down Thousands Of Accounts Linked To MMM

MMM South Africa, gained media attention after Capitec Bank started freezing accounts associated with the scheme in early 2016. Accounts were frozen amid apparent fraud concerns. Supporters of the scheme say that it operates like a stokvel, and is based on donations. Members have slammed the banks, and financial regulators for getting involved, saying that it is up to the individual to decide what they do with their money.

Over 2000 accounts linked to MMM have been shut down. The CEO was speaking in an interview with Fin24 , and said that the bank had earlier in the year started freezing accounts associated with the scheme, before reporting it to the South African Reserve Bank.

MMM, which was  started by convicted Russian fraudster, Sergey Mavrodi, guarantees a return of 30% on any fees put into the system – which is 20% above the repo rate, and one of the key signifiers of a multiplication scheme.

The scheme is currently under investigation by the Hawks, while its widely accepted label as a Ponzi scheme is being challenged by one of its members in the High Court.

The NCC as well as the South African Reserve Bank have issued warnings around the scheme – and others like it – calling on the public to proceed with caution when dealing with their money.