MZANSI people need to learn how to find the right investment scheme amid all the fake and fraudulent ones.
According to the South African Banking Risk Information Centre, fraud investment schemes are either Ponzi or pyramid schemes. Although they have different names, they work in the same way – pyramid schemes target informal markets and Ponzi schemes target the formal markets.
Spot a fake investment scam
- It pays out double-digit returns.
- It is an opportunity of a lifetime.
- The people behind the fraud investment schemes often claim the schemes are stokvels or savings clubs but there is no clear explanation of how the scheme generates money. They avoid questions or produce confusing and complicated charts and graphs with fast and fancy technical words. They may use intimidating jargon like virtual money or cryptocurrency, and throw around words like BitCoin, blockchain and tokens.
- It is not a registered product or a product of a registered financial services provider.
The scheme has different levels of membership, all generating increasing funds the longer the cash is left invested.
- Returns are increased by recruiting new investors to the scheme.
- Beware of any scheme that rushes your investment – “you need to act NOW!” – or you will miss your chance.
- Speak to financial advisers or fraud specialists at a local bank or ask the police.
