TIRANA, Feb.28 -The frightening phenomenon of the pyramid schemes otherwise known as Ponzi schemes is back in Albania. The two owners of a factory in Korca after borrowing money from 20 different businessmen have disappeared. The phenomenon of pyramid schemes thus makes its first comeback in the city of Korca. The two owners have borrowed at an interest rate of 12 percent but their business “Interkonfeskion” has closed down in 2007 and they have not paid back their debt. The creditors will appeal their case in court. More than 100 creditors are reported to be involved in this fraud.
Pyramid schemes
The phenomenon of the pyramid schemes was the cause of the political and economic collapse of Albania in 1997 which cost more than 2000 lives. No example was taken and reported by the administration from the previous similar experience of regional countries such as Bulgaria.
The proliferation of the fraud financial mechanisms, almost 20 of them by the end of 1996, which promised to yield unprecedented rates at and above 30 percent for deposits, crashed to the ground months after operation and took away the savings of the majority of Albanians. To the present day transparency on the issue is not complete and those firms whose assets were sold have returned no more than 3 percent to their creditors.
