Caveat emptor (buyer beware)

June 2016 Editor's Choice, Security Services & Risk Management

More frequently, ordinary South Africans are losing their money by being misled by rogue individuals or con artists, cyber crooks, fraudulent Ponzi or pyramid schemes and those misrepresenting themselves as financial service providers (FSP) or authorised representatives of an FSP.

Not only are these incidents collectively costing South Africans millions of rands, they are also discrediting authorised financial services providers and contributing to wasteful expenditure in respect of valuable resources set aside to investigate such matters.

Many people also fall victim to online company websites and email phishing scams whereby fraudsters contact the public posing as a credible financial provider.

As an example, the integrated financial services provider Momentum, was recently alerted to individuals misrepresenting themselves as authorised representatives of a company, identified as Momentum Investment Holdings. This entity was purporting to be a registered financial service provider. The problem is that despite certain similarities to other entities associated with the Momentum brand, this specific entity does not exist nor is it registered with the FSB. Furthermore, the persons representing this entity were fraudsters conducting illegal business on the back of a well-established brand.

South Africans are warned to be particularly vigilant when they are approached by people in person or online who make grandiose promises about quick and easy ways to make money.

Fraudsters are continuously reinventing themselves, creating an impression that they are authorised financial service providers linked to a legitimate service provider.

In this regard, the public is reminded that various methods are available to them to assist in verifying the details provided by an individual presenting him/herself as an authorised FSP or representative. All entities or representatives providing financial services must be registered with the FSB.

The verification of a FSP licence number is possible via the FSB website or a phone call to the presented FSP’s compliance officer is recommended prior to engaging with a person representing an entity.

Extra caution is further recommended when transacting via email and where a financial institution requests you to divulge your personal details, bank account details, log-in credentials or passwords. It is recommended that you take the time to familiarise yourself with the types of fraudulent conduct and email phishing tactics.

The public may verify the details of whether entities are registered and regulated by contacting the FSB at or 0800 20 20 87.

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