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The case of the amazing disappearing bank

Here at Finextra we often cover clever, tech-driven scams dreamt up by criminals looking to part people from their money.

Sometimes though, the simpler a plan the better, as a gang of crooks in Uganda has demonstrated.

The group set up a bank, Visa Finance, in the town of Malaba on the Kenyan border. They rented an office and began advertising on local radio. Business started to boom and the 'bank' took around $100,000 in deposits.

Then the crooks did a runner, leaving a note saying: "Sorry the bank operations have been moved to a new place."

As news of the scam spread, crowds of victims - mainly retail traders and small-scale farmers from surrounding villages - descended on the fake bank's office but to no avail. Their money was gone.

According to allAfrica, the town council was aware this outfit was operating without a license and eventually threatened to close the thing down but the gang decided to shut up shop themselves and scarpered.

When I first read the story it bought a smile to my face - you have to admire the simplicity and bravado - but when you think of the devastating effect this will have on the victims it's not so funny. I'm guessing many of them will never trust a bank again which is a shame, because there's some really good work being done in microfinance to help small business owners in Africa.

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Comments: (1)

A Finextra member
A Finextra member 26 July, 2009, 01:59Be the first to give this comment the thumbs up 0 likes

I noticed that they even took the carpets, I'd say it will soon be the case of the 'reappearing bank'.

There isn't anything out of the ordinary in that MO (in banking terms) is there?

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