Public warned of U-Care operations
The Bank of Namibia together with the Namibia Financial Institutions Supervisory Authority (Namfisa) has warned the public against dealing with a South African registered “charity organisation”, U-Care.
In a joint media statement released this week, the central bank and Namfisa said the operations of U-Care in the country are in contravention of both the Banking Institutions Act, 1998 as amended and the Long-term Insurance Act, 1998, as amended.
The statement read: “On 27 April 2011, BON directed U-Care to refrain from pursuing any further business activities in Namibia. Despite this directive, U-Care continued to operate in Namibia under the radar.”
According to the statement, the business model of U-Care was found to be in contravention of section 55A of the Banking Institutions Act of 1998, as amended based on the following key principles:
“The core activity is to introduce new members of the public to the business practice, whereby money in the form of a monthly fee per member is regularly accepted from members of the public. Participants are then encouraged and required to introduce or recruit new members of the public to the network in order to earn monetary rewards and progress in status. The funds so obtained from the public are then allocated to participants as rewards, which principally come from the monthly contributions received from existing and newly recruited members.”
U-Care also stands accused of contravening the amended Long-term Insurance Act by acting as a funeral insurance intermediary without approval from the Registrar of Long-term Insurance.
Members of the public who have joined U-Care have been warned to discontinue their membership with immediate effect while those who have intentions to join should desist from doing so forthwith.
“By transacting with or getting involved in the business practices of U-Care, such participating members of the public may equally become liable, since they will be contravening the Banking Institutions Act and the Long-term Insurance Act and this could result in prosecution under these laws.
“In addition, charities and other organisations who were enticed to accept and receive donor funding from U-Care are also cautioned to relinquish their relationships with U-Care Namibia, since any involvement with U-Care may present them with reputational and legal challenges,” the media statement said.