E-Creator Zimbabwe: E-Commerce Platform, Ponzi Scheme, Scam, Pyramid Scheme
Allegations of Fraudulent Activities
In an official statement released by E-Creator, it was revealed that Zhao Jiaotong had engaged in a series of fraudulent activities within the platform. These activities primarily involved the misuse of funds and deceptive practices. Jiaotong allegedly utilized Ecocash agents in Harare to withdraw funds from E-Creator, subsequently transferring the money to his personal Ecocash account. Additionally, he allegedly employed various methods to deceive E-Creator employees into providing him with funds. These actions are said to have led to significant financial losses, exceeding 1 million US dollars.
Plea for Public Assistance and Founder’s Escape
As the alleged intentions of Zhao Jiaotong to leave Zimbabwe became apparent, E-Creator made a desperate plea to the public for assistance in apprehending him. The company urged individuals to remain vigilant at airports and along border roads, offering a reward for any information that could lead to the recovery of the lost funds. The plea aimed to mobilize the community and increase the chances of catching Jiaotong before he could escape with the stolen money. However, despite these efforts, Jiaotong reportedly managed to successfully flee the country, resulting in the closure of E-Creator.
Devastation and Loss of Trust
The closure of E-Creator left a significant impact on the Zimbabwean population, particularly those who had trusted the platform and invested their hard-earned money. Many individuals found themselves in a state of devastation and financial distress as their investments vanished overnight. E-Creator had previously reassured its users that their funds were secure, despite experiencing withdrawal delays a few days prior. However, the revelation of the fraudulent activities shattered the trust that users had placed in the platform. Zimbabweans were left grappling with the devastating consequences of the scam, facing substantial financial losses and a sense of betrayal.
Warning Signs and Scam Indicators
Prior to its closure, E-Creator exhibited several warning signs and indicators that suggested it could be a scam. It is essential to be aware of these indicators to protect oneself from similar fraudulent schemes in the future.
Unrealistic Returns on Investment
E-Creator promised its members the possibility of doubling their investments every month, by offering a commission of 4 percent daily, an excessively high and unrealistic return which translated to 120 percent per month. Such promises are typically associated with Ponzi schemes and raise suspicions about the legitimacy of the operation.
Fake Reviews and Unethical Practices
The main activity of E-Creator involved posting fake reviews on e-commerce sites Lazada and Zalando, in exchange for monetary compensation. Fake online reviews are deceptive marketing practices that are considered unethical and illegal in many countries. E-creator members were required to post ten fake reviews per day and were promised around 100% of their principal investment in commissions each month. Engaging in such practices undermines the integrity of online commerce and should be approached with caution.
Deposits and Lack of Licensing
E-Creator demanded members to deposit money and maintain a balance to receive the promised commissions. However, the platform was not licensed by the Reserve Bank of Zimbabwe to accept deposits. This lack of licensing raised concerns about the legitimacy of their operations and the security of users’ funds.
Lack of Transparency and Red Flags
E-Creator exhibited a lack of transparency in its operations, raising red flags about its legitimacy. Some of these red flags included:
- Lack of Registration: The organization’s registration with government agencies was questionable, as it was not registered with any official government agency, casting doubt on its legal standing.
- Misspelled Web Address: E-Creator’s web address contained a misspelling, with “e-creatoerzw.com” instead of the intended “e-creatorzw.com.” Such errors can indicate a lack of attention to detail or unprofessionalism.
- Ties to Questionable Organizations: E-Creator’s app, available on Android, bore a resemblance to a Nigerian company called Amita E-commerce, known for its similar business model. Reports suggested that Amita E-commerce was struggling to meet customer withdrawal requests, raising concerns about the credibility of E-Creator.
- Unexplained Business Model: Despite claiming to offer a range of services for e-commerce entrepreneurs, E-Creator’s core business model revolved around posting fake reviews. The vague description of their services and lack of clarity raised suspicions about their true intentions.
How E-Creator Tried To Look Legitimate
Here is how E-Creator tried to pass the legitimacy test.
- Company Registration: E-Creator was officially registered as a limited liability company in Zimbabwe on 7 February 2023. The registration certificate was proudly displayed on their website, suggesting an attempt to appear legitimate.
- Physical Address: E-Creator provided a physical address, located on the 10th Floor, Offices 15 and 16 at Joina City in Harare. This allowed potential investors to visit the premises and verify the existence of the company.
- Visible Leadership: E-Creator showcased its “visionary CEO, Justin Kuchekenya,” and the company’s office manager, Abraham Mutambu. Kuchekenya had even made appearances on national television to promote the business. However, it remained unclear if Kuchekenya was genuinely the driving force behind the business or merely a figurehead for the real owners.
E-Creator’s Business Operations
E-Creator claimed to engage in global internet operations, promotion, and retail services. However, a closer look at the company’s activities revealed a focus on rating products online. According to E-Creator’s office manager, their job was to rate products online and receive daily commissions. The company disclaimed involvement in selling or promoting products directly. Instead, they focused on providing “order advertisement campaigns,” which essentially involved posting fake reviews on e-commerce platforms.
The Influence of Fake Reviews
Fake reviews play a significant role in online commerce globally. Sellers often incentivize individuals to post favorable reviews on their products and services, creating a false sense of popularity and reliability. The direct influence of fake reviews on global online spending has been estimated at a staggering $152 billion. E-Creator aimed to exploit this market by recruiting individuals to post fake reviews on e-commerce platforms, such as Lazada and Zalando.
Financial Operations and Membership Levels
To participate in E-Creator’s scheme, individuals were required to deposit money with the company. The amount of the deposit determined the membership level and the corresponding commission rates. For example:
- VIP 1: Deposited $15-$100 granted up to 4% in daily commissions for posting 10 fake reviews.
- VIP 2: Deposited $100-$500 and recruited 5 active VIP 1 members, upgrading the membership level and increasing the commission rate to 4.5%.
- VIP 3: Deposited over $500 (up to a maximum of $2000) and had 5 VIP 2 recruits, elevating the membership to VIP 3, where the commission rate further increased to 5%.
E-Creator also offered bonuses and incentives for recruiting a significant number of members. For instance, individuals who successfully recruited at least 50 people at any level became managers and received a $400 monthly bonus in addition to their own commissions.
However, it was important to note that maintaining the minimum balance required for each level was necessary to remain in the program. Additionally, recruits had to remain active to retain the corresponding membership level. E-Creator claimed that members could withdraw both the principal and earned commissions at any time and exit the program.
Limitations and Regulation
Regardless of the membership level, each individual was restricted to posting 10 fake reviews per day. This limitation might have been imposed to evade detection by e-commerce platforms’ algorithms that could flag E-Creator’s reviewers. The company justified this limitation as necessary for “regulation purposes.”
The Ponzi Scheme came to an end in July 2023 after one of the directors ran away with a million dollars and left investors crying. The Chinese nationality and other directors of the company were arrested and are yet to be sentenced by a court of law.
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