NDIC Warns Nigerians Against Rising Wave of Fraudulent Investment Schemes

The Nigeria Deposit Insurance Corporation (NDIC) has issued a strong warning to the public over the growing number of fraudulent investment schemes targeting unsuspecting Nigerians with promises of unrealistic returns. The corporation cautioned that such schemes, often operating under various deceptive names and business models, have continued to defraud individuals of their hard-earned money despite repeated public sensitization.

In a recent statement by the NDIC’s Director of Communication and Public Affairs, Bashir Nuhu, the corporation urged Nigerians to be cautious and conduct thorough due diligence before committing funds to any investment platform. The NDIC emphasized that these illegal entities are neither licensed financial institutions nor insured by the corporation, meaning that depositors have no protection under Nigeria’s financial safety net if such platforms collapse.

According to the NDIC, the trend of fraudulent investment schemes has worsened due to the current economic climate, where many people are seeking quick financial relief. The corporation noted that scammers exploit the desperation of individuals by advertising schemes that promise daily, weekly, or monthly returns that far exceed market realities. “These fraudulent schemes operate without authorization, regulatory oversight, or transparency, and once they collect money from unsuspecting victims, they often disappear,” Nuhu stated.

The NDIC further clarified that only financial institutions licensed by the Central Bank of Nigeria (CBN) and insured by the corporation are legally allowed to collect deposits or offer savings and investment products to the public. The organization listed commercial banks, microfinance banks, mortgage banks, and a few fintech institutions as legitimate operators under its insurance coverage.

The corporation reiterated that Nigerians can easily verify whether an institution is insured by visiting the NDIC website or checking the list of licensed banks published periodically by the Central Bank of Nigeria. This, it said, is a simple step that can save individuals from financial loss. The agency also urged members of the public to report any suspicious investment platforms to the relevant authorities for prompt investigation and possible prosecution.

The NDIC’s renewed warning comes on the heels of several recent reports of large-scale Ponzi and pyramid schemes collapsing across the country. Many of these schemes, often disguised as cooperative societies, digital trading platforms, or crypto investment outlets, have defrauded thousands of citizens of billions of naira. The NDIC lamented that despite multiple arrests and prosecutions, new fraudulent schemes continue to emerge, adapting their strategies to exploit unsuspecting Nigerians through social media, influencer marketing, and digital advertising.

The corporation noted that social media has become a major breeding ground for such scams. Many perpetrators use flashy lifestyles, fake testimonials, and celebrity endorsements to lure victims. NDIC therefore advised Nigerians to ignore such marketing tactics and instead seek financial advice from licensed professionals or reputable institutions.

The Director of Communication also reminded the public that the NDIC’s deposit insurance scheme is designed to protect depositors of licensed financial institutions in the event of bank failure — not participants in unauthorized investment platforms. He stated that once a scheme is not recognized by the CBN or insured by NDIC, investors stand no chance of recovering their funds when it collapses.

Beyond public warning, the NDIC revealed that it is working with the Central Bank of Nigeria, the Economic and Financial Crimes Commission (EFCC), and other regulatory agencies to track and shut down unregistered financial operators. The corporation stressed that a coordinated regulatory effort is necessary to protect consumers and maintain confidence in Nigeria’s financial system.

Industry analysts have commended NDIC’s proactive stance but also called for greater public education on financial literacy. They argue that many Nigerians fall victim to fraudulent schemes due to lack of awareness about how the formal financial system works. Strengthening community-based financial education and digital safety awareness, they say, would go a long way in reducing the incidence of financial fraud.

In addition, the NDIC encouraged Nigerians to consider legitimate investment opportunities through regulated channels such as treasury bills, mutual funds, or licensed stockbroking firms. These, it said, may offer modest returns compared to fraudulent platforms but come with transparency, accountability, and the protection of financial regulators.

The corporation concluded by reaffirming its commitment to protecting depositors and promoting stability in Nigeria’s banking sector. It warned that anyone caught operating an illegal deposit-taking or investment business would face legal sanctions in line with Nigerian financial laws. “We will continue to monitor the financial landscape and take appropriate action to safeguard public trust in the banking system,” the statement read.

With the proliferation of online scams and fake investment outlets, NDIC’s warning serves as a timely reminder that financial vigilance remains essential. Nigerians are urged to be wary of offers that seem too good to be true — because, in most cases, they are.