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humaila Anwar, a resident of Makkah City on Satiana Road, said she invested her life savings amounting to Rs 350,000 in a scheme after her husband’s death on the advice of a relative.
According to Shumaila, she was still in shock and grief when a relative convinced her that she really needed some form of financial security in her life now that her spouse had passed away. The relative said that there was an investment scheme through which she could do that.
“He [the relative] told me the scheme was called One Queen, One Life. I was promised that my investment would grow to Rs 1.8 million in six months. If I brought in new members, I would get a bonus,” Shumaila recalled.
She was still not convinced. When she expressed her doubts regarding this “scheme,” her relative assured her that he had invested with the same company under the same scheme and had doubled his money within a few months. He said he could personally vouch for it.
Shumaila said she took his word for it. “I was in dire need of money. If such a scheme existed, I thought, I should go for it,” she said. “I made a mistake. I trusted my relative.”
When the stipulated time passed and Shumaila demanded her money back, the company’s representatives began making excuses for delay and her relative stopped answering her calls.
“One day, a company representative named Razzaq Shah called me to his office. He physically assaulted me, sexually harassed me and forced me to sign blank stamp papers,” she said.
Shumaila said that, after the incident, she stayed silent out of fear. “I still regret my decision to trust my relative and sign up for this scheme.”
Muhammad Sajid Qayyum, a resident of Madina Town, was also made a similar offer. He told The News on Sunday that, in spite of his gut feeling that something was wrong, he signed up for it, because he had been looking for ways to earn an extra income to meet his household expenses that were growing.
Sajid fell for the scam but was fortunate enough to recover Rs 2.1 million, thanks to timely action by the National Cyber Crime Investigation Agency.
“I frequently received WhatsApp messages saying that I could make good money through online work from home,” he said. “One day, I clicked a Telegram link. It led to a page named Upwork Pakistan, which had over 32,000 members.”
Soon, a woman named Alice Garcia, claiming to be a company representative, briefed Sajid on WhatsApp and told him he would make Rs 100 for completing each online task. He was then added to a Telegram channel and given YouTube links to subscribe to.
“I completed 15 to 20 tasks that same day and received the payment instantly. Later, I was told I had been promoted and placed in the company’s VIP task group,” he said.
Before starting the new tasks, he was told to buy a task package. “Excited about earning easy money from home, I immediately paid for the package and continued sending money whenever they asked for it.
“They asked for a lot of money for subscription so, to make this initial payment, I had to gather my savings, sell my wife’s jewelry and borrow from friends and relatives,” he said. “Soon after making the payment, I noticed that my number had been blocked,” Sajid said.
“I was deep in debt, so instead of staying silent, I approached the law enforcement agencies for help,” said Sajid. “Thanks to my complaint, the NCCIA not only recovered my money but also helped many other people get their funds back from these fraudsters.”
In July 2025, the NCCIA arrested a gang of 150 suspects - local and foreign - involved in large-scale financial fraud and investment scams from the residence of former FESCO chairman Malik Tahseen Awan in Chak 54-RB Sarhali, a suburban area of Faisalabad.
According to NCCIA officials, the suspects included 131 men and 18 women. 48 of them were Chinese, eight Nigerians, six Bangladeshis, four Filipinos, two Sri Lankans, two people from Myanmar and one person from Zimbabwe.
The agency registered eight FIRs against them for their involvement in Ponzi schemes and investment fraud.
The alleged ringleader, Malik Tahseen Awan, and some several other key suspects have since been released on bail. The charge sheets for three out of the eight FIRs have been submitted in court and hearings are currently under way.
Selling dreams
A Ponzi scheme is a fraudulent investment model that pays returns to earlier investors using the capital provided by new investors rather than legitimate business profits. Such schemes are illegal worldwide. Fraudsters initially build trust by offering unusually high returns and then disappear with the money once a large number of people have made the investment.
In Pakistan, these scams are often disguised as multi-level marketing (MLM) programmes that focus on recruiting new members rather than selling a real product. Most participants end up losing their investments, as the structure collapses once the recruitment slows down. The term Ponzi scheme is named after Charles Ponzi, an Italian swindler who orchestrated the first such scam in 1920.
It is difficult to estimate the number of victims or the financial losses from Ponzi and MLM scams in Pakistan, as many victims hesitate to report such cases to law enforcement agencies. However, according to the Securities and Exchange Commission of Pakistan Annual Report 2024, 20 companies found guilty of illegally collecting public deposits were fined a total of Rs 4.735 billion. 42 of their directors were barred from holding directorships or forming new companies. Additionally, SECP issued 4,197 dissolution orders against non-listed companies, imposing fines amounting to Rs 6.57 billion.
“Victims of such scams often suffer psychological distress in addition to financial losses, as they feel ashamed or fear being blamed for their misfortune.”
In a recent development, the National Accountability Bureau recovered and returned Rs 3.7 billion to 17,500 victims of the B4U Ponzi scheme.
The SECP continues to warn citizens against investing in entities that promise unrealistic profits through Ponzi or MLM-style operations. The commission urges the public to verify the registration and legitimacy of any company with the SECP or other relevant authorities before making financial investments.
The State Bank of Pakistan has a crucial role in curbing Ponzi and multi-level marketing scams through regulation, enforcement and public awareness. As the regulator of banks, microfinance institutions and non-banking financial entities, the SBP monitors and takes action against any organisation that illegally collects deposits or offers unauthorised investment returns under the guise of financial services.
The SBP also seeks to promote financial literacy and public awareness about safe banking practices and the risks associated with illegal investment offers. In addition, the central bank collaborates with other institutions, including the SECP, the NCCIA and the Pakistan Telecommunication Authority, to detect and investigate unauthorised financial operations.
The PTA, too, has a significant role in preventing Ponzi and MLM schemes that operate through digital and telecom platforms. According to the PTA’s 2024 Annual Report, fraudulent investment schemes promising unrealistic profits or rewards through fake messages and calls have increased alarmingly across mobile and online networks.
In response, the PTA blocked 5,294 mobile numbers and 4,507 IMEIs over the past year, blacklisted 113 national identity card numbers and issued warnings to 19,730 mobile users. To prevent misuse of lost or stolen devices, 27,351 mobile phones were blocked.
The PTA has also launched public awareness campaigns to educate users on identifying and avoiding such scams. Officials say broader awareness efforts, localised campaigns and legal reforms are necessary to better protect telecom consumers and empower them against digital fraud.
Fiaz Ahmed Butt Advocate says that, under Section 301 of the Companies Act, 2017, referral marketing, Ponzi and MLM schemes are illegal in Pakistan. “According to Section 84 of the act, only licensed or specialised companies are permitted to accept deposits or provide financial services such as leasing, financing and investment deposits. Running such schemes without authorisation is unlawful,” he said.
Fiaz said that despite a clear legal framework, the rise in financial fraud stems from a lack of public awareness, poor financial literacy and weak enforcement mechanisms. “To prevent such scams, public education through media and community engagement is essential. The government should also help improve the business environment and expand employment opportunities,” he added.
Fiaz said Ponzi schemes exploit citizens’ financial hardships by preying on their desperation for quick profits. “Victims of such scams often suffer psychological distress in addition to financial losses, as they feel ashamed or fear being blamed for their misfortune,” he said.
He urged the victims to come forward instead of staying silent and to file complaints with the relevant agencies to help prevent others from falling into the same trap. “Authorities must also act proactively rather than waiting for complaints, implementing preventive measures to shield citizens from such financial exploitation,” he said.
The growing tide of Ponzi schemes and online investment frauds in Pakistan reflects both the country’s rapid digital expansion and the lack of public awareness about financial safety.
Despite the legal frameworks and actions taken by the SECP, the SBP, the PTA and the NCCIA, fraudsters continue to exploit loopholes and public trust, particularly targeting low-income and digitally uneducated citizens.
Experts say effective prevention will require a multi-pronged approach—combining regulatory vigilance, improved digital literacy and proactive enforcement with mass awareness campaigns.
They also say the fight against financial fraud demands an informed and cautious public.
The writer has beenassociated withjournalism for the past decade. He tweets naeemahmad876