Some of the common investing scams
There are dozens of ways for crooks to gain access to people’s accounts, often masquerading as financial institutions, says Ramesh Ramdeen, fraud manager at FNB Wealth and Investments and Ashburton Investments.
“Investors must be vigilant. If anything seems strange or strange to you, stop what you are doing and contact your financial service provider or financial advisor directly. Never feel like you have to do something right away, ”Ramdeen said.
Here are some of the most common investment scams in South Africa:
High yield investments: This type of fraud usually involves an unauthorized person convincing an investor that an unregistered investment can produce a high return with little or no risk. If you are approached online to invest in any of them, you should use extreme caution – it is most likely a fraud. If it sounds too good to be true, it probably is.
Closely related, many scammers claim to work for an asset manager and even use fake copy websites with the names of real staff members of legitimate companies. Always check with different sources before parting with your money.
Advance fees: Scammers can ask for an upfront payment to grant access to a supposed good deal. They can even go so far as to pose as professionals in the financial services industry, such as a broker, to make investors feel more comfortable with them. Investors should be aware that scammers can even use official sounding email addresses. To avoid the ploy, investors should seek advisers.
Pyramid schemes: Although a pyramid scheme may seem similar to a tiered marketing program where income is based on the amount of sales, it is an illegal practice.
“Participants in this program can only earn money by recruiting new participants and they also have to purchase a large inventory of one or more products,” Ramdeen said.
Internet and social media fraud: Scammers use social media to appear legitimate through newsletters and blog posts. They also use it to collect sensitive information about you and spam you with unsolicited offers.
Just because someone is on social media doesn’t mean it’s a legitimate business. Social networks are increasingly fertile ground for crooks.
Phishing: People are tricked into clicking links in emails or messaging apps that introduce malware to their devices, allowing fraudsters to gain insight into their confidential information such as banking and investment information.
They then use this information to communicate with financial institutions to make withdrawals from investments and bank accounts.
The best way to protect yourself is to “think before you click”, use anti-virus software, check the full name of the message, check the sender’s email, check some details on the email. -mail and keep your phone and computer operating systems until Date.
Identity theft: Identity numbers are stolen and used to commit fraud, such as taking out loans, taking over accounts at financial institutions, and withdrawing funds. To best protect yourself against identity theft, keep passports, ID cards, driver’s licenses, utility bills, and bank statements in a safe place or destroy old statements you don’t want. need more.
“We urge all investors to remain vigilant at all times. If you are not sure, your financial advisor or the investment institution has fraud hotlines that you can contact to verify information or report fraud, ”Ramdeen said.