ROSCA Fraud (Tontine / Paluwagan / Stokvel)
Fraud within rotating savings and credit associations — community money-pooling groups known regionally as tontines, paluwagan, stokvels, sou-sou, chit funds, or committees — where an organiser absconds with the pooled fund or runs the group as a disguised pyramid scheme.
Also known as: tontine fraud, paluwagan scam, stokvel fraud, sou-sou scam, chit fund fraud, money circle scam
Last reviewed: 27 July 2026
A rotating savings and credit association (ROSCA) is a long-standing, mostly informal way communities save together: members contribute a fixed amount each cycle, and the whole pot is paid out to one member in turn until everyone has received it once. They go by many regional names — tontine in parts of Africa and France, paluwagan in the Philippines, stokvel in South Africa, sou-sou in the Caribbean, chit fund in South Asia, and 'committee' in parts of the Middle East and South Asia. Legitimately run, they build savings and provide credit where banking is scarce.
ROSCA fraud exploits the trust that makes them work. A dishonest organiser may collect contributions and disappear before paying out, manipulate the payout order to favour accomplices, recruit far more members than the model supports, or reshape the group into a recruitment-driven pyramid or 'money circle' / 'blessing loom' that inevitably collapses, leaving late joiners with nothing.
The safeguards are the group's own discipline: known and trusted members, transparent record-keeping, a fixed and fair rotation, and deep suspicion of any version that pays 'returns' or requires recruiting others rather than simply rotating a shared pot.