The Bank of Tanzania has distanced itself from fraud allegations against Leo Beneath London, a company accused of running a Ponzi scheme. Law enforcement has arrested 17 individuals tied to the scheme, which misled participants into making financial deposits under false pretenses. In response to increasing fraudulent activities, the central bank proposed new regulations for microfinance operations to enhance oversight and consumer protection.
The Bank of Tanzania has distanced itself from recent online fraud allegations involving the company Leo Beneath London (LBL), accused of running an illicit Ponzi scheme disguised as a movie promotion agency. Police have arrested 17 individuals linked to this scheme, which reportedly solicited deposits from customers under the pretense of a program for viewing movie clips and trailers, promising significant financial returns.
The scheme allegedly enticed participants by suggesting they could earn money not only from viewing content but also by recruiting others into the program, indicative of a pyramid scheme. Hundreds of individuals reportedly fell victim to this operation, prompting law enforcement to investigate the total amount of money extorted.
As the situation unfolds, the Bank of Tanzania is responding to mounting pressure to enhance its regulation and oversight of fraud in the microfinance sector. In a public notice, the bank clarified that it did not authorize LBL’s operations and has initiated legal action against its officials for conducting unauthorized financial activities.
Recently, the Bank proposed new regulations for digital and non-deposit taking microfinance services, with a deadline of June 30 for public feedback. These regulations aim to improve licensing requirements and operational standards, and they will replace the existing regulations established in 2019, addressing unfair lending practices and compliance with consumer protection laws.
The proposed rules stipulate that all primary database servers must be located within Tanzania, and lenders are prohibited from operating multiple platforms simultaneously. Additionally, non-Tanzanian business operators in the microfinance sector will need to register local companies and adhere to specific employment restrictions, thereby prioritizing local employment.
In summary, the Bank of Tanzania’s response to the LBL fraud scandal illustrates its commitment to combating digital fraud and enhancing financial regulations within the microfinance sector. The proposed regulations aim to bolster consumer protection, ensure financial transparency, and uphold the integrity of lending practices in Tanzania. This proactive approach is crucial for restoring public confidence in the nation’s financial systems and mitigating the risk of future fraud.
Original Source: www.zawya.com
