Scam Investments Where Kenyans Lost Millions of Savings

  • An image of an holding a stash of cash
    Kenyan bank notes held in hand.
    Simon Kiragu
  • It takes a lot of months or years of sacrifice for any individual to save up money in the hope of investing it and finally buying a home, a car or even land.

    However, some fraudulent mouth-watering deals may come in the way of your future dreams, leaving you bleeding after losing your lifetime savings.

    A number of Kenyans have fallen prey to such deals, leaving them with the only option of demonstrating on the streets, in the hope that somehow justice will be served and they will get back their hard-earned cash.

    Ekeza sacco members queue at the DCI offices on Monday, march 18, 2019.
    Ekeza sacco members queue at the DCI offices on Monday, march 18, 2019.

    Below are scams that some Kenyans have endured;

    1.) Land deals

    Numerous cases have been reported where businessmen and women save up money to buy a parcel of land but end up losing millions to unscrupulous dealers. These are the most common with the conmen advertising on popular radio and TV stations to net as many investors as possible. 

    "I once bought a parcel of land worth Ksh6.5 million and was given a fake title deed. I only got to learn later when the real owner presented the original title deeds and we had to go to the relevant authorities. You can image how I felt," a culprit told this writer.

    It is advisable to do a survey as well as involve a lawyer before acquiring a parcel of land to avoid falling into traps of  such deals. Before purchase, go to the Ministry of Lands and buy 2 maps, one showing the exact measurements of the piece you are buying (called mutation) and the other showing the neighbouring lands. Each costs Ksh 350.

    After any land purchase, book a meeting with the Lands Control Board (LCB) to issue consent for the land to be sold. They meet once a month and costs Ksh 1,000. You can also book a special LCB meeting for Ksh 5,000.

    A sign post showing that the land is not for sale
    A sign post showing that the land is not for sale

    2.) Home developers

    Here, investors make house deposits as per the sale agreement, but no activity is witnessed for several months. They keep enquiring but nothing happens.

    Noticing this, they stop making payments in installments as indicated in the sale agreement. However, what most Kenyans may not know is that time based installment is not pinned on development progress.

    The developers wait for their customers to breach the contract by refusal to pay subsequent payments. From here on, the customers will try to chase to the developers for their money but to no avail. Many Kenyans especially those in the diaspora have fallen prey to this trick.

    3.) Saccos

    Most Kenyans, especially women, have benefitted from joining saccos, which help in easily accessing loans at low-interest rates, limited liability, saving and other advantages. 

    However, some saccos have been associated with mismanagement, fraud and bad loans leading to members losing money that has been saved for a number of months.

    When in search of a sacco, look for one that is not caught up in politics, poor management and inhouse wrangles, to avoid losing money. 

    File image of Kenyan banknotes
    File image of Kenyan banknotes

    4.) Greenhouse investment deals

    Some Kenyans have been conned of their money after investing in greenhouses with contracts that promised rich returns, only for them to fail to meet their promises.

    Victims who have gone through such experiences narrate that investors promise returns after a number of months but sadly, they do not keep their promise.

    "I once worked in a building in Westlands where a woman was so frustrated that she smashed a computer at the reception area in the next office. On being asked why she was causing a commotion, she stated that the greenhouse had been taking her round in circles for a number of years," Mercy Wambui stated.

    5.) Cryptocurrency

    Fraudsters may lure innocent Kenyan investors into the world of cryptocurrency, promising high returns, or cash flows, only for them to make away with the money. Although there are legitimate cryptocurrencies, lack of knowledge about this new technology leaves many people exposed and at risk of investing in fake coins.

    The firms market themselves heavily, with the catch being that you have to give up something of value, such as a membership fee, or regular recurring payments into an account.

    The unscrupulous dealers end up vacating offices, changing mobile phones, leaving the investors in distress.