Fin24

Sarb warns of ponzi schemes

2012-06-28 16:51

Johannesburg - South Africans should take care when choosing investments that offered large returns within a short period, the SA Reserve Bank warned on Thursday.
 
Many of these lucrative options were scams, bank spokesman Hlengani Mathebula said in Johannesburg.

"Report any suspected Ponzi or pyramid schemes to the SA Police Service or the SARB."

Though there were several investigations underway into schemes in KwaZulu-Natal and Gauteng in particular, the central bank regarded this as a national problem.

"Once you focus on a specific area or name, they move. This is a national issue," Mathebula said.

"Millions and billions" of rands were lost through pyramid schemes.

In 2011, the bank opened 15 new investigations and continued with a further 26.

Schemes being probed included Realcor Holdings Pty Ltd, Sharemax Investments, and Ingele Mineral Holdings.

In total, the bank had investigated 222 schemes in the past five years.

To raise public awareness of the issue, the bank had started a campaign with the slogan, "Beware of oMashayana [con artists]."

It would appear on TV, radio, and in the print media.

Mathebula said thousands of South Africans lost money every year to illegal deposit schemes, known as Ponzi or pyramid schemes.

"These schemes hook the public by convincing them of high returns in a short space of time."

Instead, the schemes collapsed as soon as they failed to recruit new investors. Pensioners were particularly vulnerable, as were those who received bonuses or had recently received death benefits.

Those participating in stokvels, or who had benefited from Road Accident Fund payouts, were also targeted, Mathebula said.

The problem cut across all sectors of society, with both the poor and rich falling victim.

Wealthy people were frequently motivated by greed, while poorer people were ignorant of the risks, said Mathebula.

The bank was usually only made aware of such schemes after people had already lost money, he said.

Comments
  • rodney.louis.7 - 2012-06-28 17:30

    only paw-paw's allow themselves to be caught in this ridiculous scheme's

      squeegee.pilot - 2012-06-28 17:44

      I once asked a group of 15 men who had been taken in any sort of scheme. Every one had! Not one had reported it as they saw it as "schoolfees" and were too embarrassed. They also did not want their wives to find out.

  • Antony.Z.Martinez - 2012-06-28 17:35

    yes.....much like the bogus advertising banner on this very page at the top!!!! promising returns of 19%!!! and you allow these crooks to advertise on your site....you're hands are just as dirty!!!

      Johan - 2012-06-28 17:52

      I agree with Anthony - all of these Forex Trading ads are scams. The advertisers make all the money and the public lose their money! I do not know of a single Financial Advisor who recommends trading in Forex unless you are highly skilled with years of training!

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