FSB to start scam adverts | Fin24
  • New CEO

    After months of speculation and delays, Andre de Ruyter has been named Eskom's new head.

  • Flag Carrier

    The escalating strike at SAA is set to test President Cyril Ramaphosa’s will.

  • The Namibian Link

    Evidence is mounting that VBS Mutual Bank aided another elaborate bank heist.


FSB to start scam adverts

Apr 08 2018 06:03

Despite the many investment scams that the South African public is falling for, in many cases the Financial Services Board (FSB) finds its hands tied when it comes to protecting the public.

As these scams are not offering FSB-regulated products and their “advisers” are not registered with the FSB, they fall outside of its jurisdiction and become a case for the South African Police Service.

Even then, it is difficult for an individual to bring a case of fraud as it is viewed as a civil matter between two individuals. Only if sufficient individuals bring a class action, would the police get involved.

The FSB has amended the general code of conduct to curb the fraudulent use of Financial Service Provider (FSP) registration numbers.

Some schemes were found to be using legitimate FSP registration details, but not for the activities that they were registered for. It also makes it an offence to use a licence in any marketing material for unauthorised business activities.

The FSB is also clamping down on the “renting of key individuals” concept, where someone with the right credentials applies for the licence, but has no oversight of the actual business.

Caroline da Silva, deputy executive officer at the FSB, says another challenge is that a Ponzi scheme is only apparent when investors can no longer access their funds and by then it is usually too late to recover their money as the scamsters would have disappeared or spent the funds.

As a further preventative measure, the FSB is introducing a division which will scan adverts making promises of high returns and investigate the validity of these schemes.

While the regulators try and keep abreast of fraudulent activity, the onus remains on individuals to be sensible and not be taken in by “rich quick” schemes because ultimately once you have lost your money, there is little chance of you ever getting it back.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

fsb  |  scam  |  personal finance  |  ponzi scheme


Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote