SOUTH AFRICANS WARNED OF COMMON FINANCIAL SCAMS

South African investors are being warned to be on high alert for a surge in potential investment scams. Financial experts have identified several common types of fraud that could leave victims out of pocket.

Be Cautious When Dealing with Investment Opportunities

According to Ramesh Ramdeen, head of Fraud at FNB Wealth and Investments and Ashburton Investments, scammers are using increasingly sophisticated methods to gain access to people’s accounts. “We urge investors to be vigilant and cautious when dealing with any investment opportunities,” said Ramdeen. “If something feels or looks suspicious, stop what you’re doing and contact your financial service provider directly or seek advice from a trusted advisor.”

Common Types of Financial Scams in South Africa

Here are some common types of financial scams currently prevalent in South Africa:

1. High-Yield Investments

Scammers promise unusually high returns with little to no risk, often using unregistered investment schemes.
“If it sounds too good to be true, it probably is,” said Ramdeen.

2. Advance Fee

Fraudsters ask for an upfront payment to access a supposedly great deal, using excuses such as regulatory fees or taxes.
Investors should research advisers and never part with money without verifying the authenticity of the opportunity.

3. Pyramid Schemes

Participants are recruited and promised earnings based on sales, but in reality, they only make money by recruiting new participants and buying large quantities of products.
Be skeptical of stories about people making money through investment programs, Ramdeen warned.

Scammers use social media to appear legitimate and collect sensitive information from investors.
Just because someone has a social media presence doesn’t mean they are a legitimate business.

5. Phishing

Fraudsters send emails or messages with links that introduce malware on devices, allowing them to access confidential information such as banking and investments details.
Ramdeen advised investors to think before clicking on links and use antivirus software.

6. Identity Theft

Scammers steal identity numbers and use them to commit fraud, such as taking out loans or withdrawing funds from accounts.
To protect against identity theft, keep sensitive documents in a safe place and shred old statements.

Protecting Yourself

Ramdeen emphasized that the best way to protect oneself is to be cautious and vigilant when dealing with any investment opportunities, and never feel pressured to act quickly.