Fast money schemes are a perennial problem in Papua New Guinea (PNG) that has recently resurfaced. Australian pyramid scams operated there during the colonial era, but in more recent times a much larger rush of fast money schemes has swept through Port Moresby, the other urban centres, and out into rural areas. These scams, such as U-Vistract and its sister scheme Money Rain, promised their investors ludicrously high returns on their ‘investments’ (typically 100 per cent per month) and often spread through church networks, especially the large Pentecostal congregations of Port Moresby. Hundreds of millions of kina were lost, largely by the working class, many of whom withdrew their ‘rainy day money’ (typically PGK1000–3000) from their bank accounts or the wads of cash hidden around the house. These schemes use the money deposited by later investors to pay earlier investors, but early investors are often part of an ‘inside track’, with shared political interests. Stories abound of ‘high-level’ people winning very large sums of money in the early days of the fast money schemes.
A letter to the Post Courier equated fast money schemes and loan sharks:
Legitimate payouts must not be cancelled
It’s about time someone in authority came out and assisted the police, courts and Bank of Papua New Guinea take a stance against loan sharks and fast money scams. Both types are fraud activities preying on the unsuspecting employees both in the public and private sector and the churches. Fast money schemes get money from the public by false promises of large returns and con the bulk of the people by making large initial payouts to demonstrate their scheme then they fail to pay back any money they receive from their so-called investors. Many of the money scheme operators have made their money from the gullible and foolish public and they have taken your money and fled.
U-Vistract has not been brought to justice and is still operating today, using its internet presence to defraud American and Australian investors. The longevity of fast money schemes is due not to a ‘gullible and foolish public’, but reflects the ingenuity of fraudsters who are able to insert their scams into popular narratives of how wealth is (or should be) produced and accessed.
In the way fraudsters groom their victims, they play upon widespread aspirations among the working class to benefit from the economy by managing personal finances as entrepreneurial ‘investments’. In doing so, they are responding to near-ubiquitous ideas of business, investment, and economic growth. Where a previous generation of salary earners was encouraged to develop their savings, now formal financial institutions, such as the Port Moresby Stock Exchange, are redefining ‘bank accounts as unproductive (by comparison with investment in shares)’. Indeed, the returns on savings accounts in PNG (and beyond) are low and certainly provide no encouragement for those hoping to supplement their salaries with interest payments. As formal institutions fail to meet people’s expectations of prosperity, the stage is set for unscrupulous informal (now illegal in the case of U-Vistract) alternatives to develop. These alternatives are often much more accessible, particularly when they make use of personal contacts and social networks such as churches.