FSB warns on fake financial schemes | Fin24
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FSB warns on fake financial schemes

May 28 2015 11:38

Cape Town - If a company that's keen to take your hard-earned cash calls itself a legitimate investment firm but turns out not to be properly registered with the authorities, that's cause for serious concern.

The Financial Services Board (FSB) has alerted the public that it has received numerous queries relating to the registration of a company called KIPI as a financial services provider (FSP).

"The FSB has no record of the scheme’s registration as an FSP, and its business dealings or those of Mydeposit247 do not fall within the jurisdiction of the institution," the FSB said in a statement on Wednesday. It pointed out that several consumers of financial services and potential investors into the scheme continue to contact the FSB about KIPI's business dealings.

The FSB's registrar has also expressed concern over the Wealth Hub scheme, of which Dr Ngoato Takalo is a CEO and director.

Referring to an interview conducted on Radio 702 with Takalo, the FSB said she gave the impression that the scheme is duly registered as a legitimate FSP.

It also said it has received numerous queries from the media about the legitimacy of the scheme, and whether it falls "within the description of a pyramid scheme".

The Wealth Hub not a registered FSP

The FSB set the record straight in no uncertain terms: "The registrar therefore wishes to state that the scheme is not registered with the FSB and its business dealings fall outside the regulatory net of the FSB."

Concerning these two schemes, the FSB said it has followed standard procedure for queries that fall outside its jurisdiction by forwarding them to the South African Reserve Bank and the National Consumer Commission. This is because these two institutions are duly authorised to investigate and take appropriate action.

So how does the FSB handle queries about this type of scheme? Caroline da Silva, the deputy executive officer for Financial Advisory and Intermediary Services at the FSB, said:“Whenever we receive such queries, we first ascertain if there are any regulated entities involved. Where we have no jurisdiction we continue to cooperate with the appropriate regulator so that action can be taken.”

The regulator said it has seen a significant uptick in investigations of Ponzi-type investment schemes, and entities which take investments under the guise of being authorised financial services providers.

The FSB urged consumers to be vigilant and avoid participating in this type of scheme. Rather be safe than sorry, and be sure you take responsibility for your investment choices. The FSB warned: "Investors or consumers who are lured into such schemes carry the risk and obligation to enquire into the merits of the investment before parting with any money."

Da Silva added it is critical for investors to ensure that they seek the advice of a reputable and accredited financial adviser before parting with any hard-earned cash.

How to make sure

Is the scheme you are considering investing in an above-board financial services provider, or yet another potential pyramid money guzzler? You can check its credentials on the FSB website, or call the FSB’s Call Centre on 0800 110 443.

fsb  |  ponzi scheme  |  investments


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