Reputable and regulated financial services providers will never sell policies or investments via a WhatsApp group, Telegram, a social media platform, email or an unsolicited random phone call, according to a consumer alert from the Association for Savings and Investments South Africa (ASISA).
Jean van Niekerk, convenor of the ASISA Forensic Standing Committee, says member companies have seen a sharp rise in fraud committed via social media channels in recent years, prompting the warning to consumers.
“ASISA members have shared heartbreaking examples of how financially vulnerable consumers are frequently tricked into parting with the little money they have left. Most recently, a large asset manager alerted us to a WhatsApp scam using the profile and photo of the company’s CEO and targeting members of a support group for unemployed teachers.”
Van Niekerk says scammers create false marketing material using the logos of well-known regulated companies and often the profiles of their executives. This is distributed via social media, Telegram, and WhatsApp groups with promises of never-to-be-repeated investment returns.
“When you are desperate, and you see the CEO of a big financial services company promise huge investment returns, validated by fake testimonials, it is easy to throw caution to the wind and click on a link or make an investment,” says Van Niekerk. He adds that, unfortunately, this often leaves people already struggling financially completely destitute, and usually, there is no recourse.
He stresses that the CEOs of reputable companies will never promise investment returns to sign up investors or sell policies. “If you come across a group where the CEO of a financial services company appears to punt investment returns, you can be absolutely sure that this is a scam,” says Van Niekerk.
According to Van Niekerk, companies usually find out about the scams conducted in their name when desperate consumers turn to them for help once they are ghosted by the scammers after handing over the money.
“Our appeal to consumers is to make an effort to check with companies before handing over money and not once it is too late,” says Van Niekerk.
“Consumers are quick to turn to social media platforms and WhatsApp and Telegram groups asking whether something is a scam instead of calling the company under whose stolen identity the fraud is being perpetrated. Instead of making an effort to establish whether you have been scammed once it is too late, do your homework before clicking on links or paying over money.”
Van Niekerk offers the following pointers to avoid falling victim to a social app or platform scam:
Van Niekerk says while the chances of recovering your money are slim once you have been scammed, it is worth alerting the company in whose name the fraud was committed. This enables the forensics department of that company to investigate and alert other consumers. The company will also alert the industry regulatory body, the Financial Sector Conduct Authority (FSCA), which will alert consumers via the media.
If you have fallen victim to a scam, it is critical that you immediately alert your bank as well as the bank used by the scammer to receive your money via the bank’s fraud hotline, adds Van Niekerk. “If you act quickly enough, the bank may be able to help you recover your money. If this is not possible, at least the bank can take action against the scammer and close the account to prevent the scammers from targeting more honest and hardworking consumers.”
