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Money scams increasingly hiding behind religious leaders - expert

Sep 26 2016 14:34
Lameez Omarjee

Johannesburg – Religious leaders are increasingly being used to promote financial products, some of which are not legitimate.

This is according to Eckhard Volker, managing director of Integrated Forensic Accounting Services. In an interview with Fin24, Volker explained that religious leaders were becoming a prominent element in the marketing of some money schemes.

“This is a problem because people completely trust their pastors. They take whatever their pastors tell them as absolute proof,” he said.

The South African Reserve Bank (Sarb) recently launched a campaign to raise awareness among the public about different methods used by scam artists to defraud them. The word of religious leaders, and recommendations by friends and family are often used as proof of credibility.

READ: Sarb warns South Africans of scams

Fin24 recently reported on a credit provider, Stream Knowledge Finance, offering loans to consumers without conducting any credit checks. After viewing the application form, Volker said it was consistent with the characteristics associated with a “419 scam” or a “Nigerian Letter” scam.  

“I believe this to be an example of what is referred to as ‘advance fee fraud’, where the applicant would be required to make some type of advanced payment for the loan to be ‘released’, probably again and again,” he said in an emailed response.

The application form is signed off by “Rev. Joe Stewart”. Volker said that the use of the word “reverend” is misused to give an applicant a false sense of comfort. “This suggests that they are dealing with a person of integrity and high moral fibre, when the exact opposite might apply.” He added that it is unusual that a reverend would hold the position of head of a loan department.

When Fin24 contacted Reverend Joe Stewart, the head of the loan department at Stream Knowledge Finance, he said that it was not a scam.  “It is not possible for us to be a scam, we are registered with the National Credit Regulator (NCR),” he said.

ALSO READ:

Picking apart the Stream Knowledge Finance loan application form

Volker said key giveaways in spotting a scam is when an application form looks “homemade”, and has other inconsistencies. “A legitimate organisation makes an effort to look right,” he said.

He pointed out red flags on the Stream Knowledge Finance loan application form that users can look out for:

  • The “poorly reproduced” coat of arms of South Africa has no place in a company’s application form. It implies that it is government supported, or a government structure, which it is not. The inclusion of the coat of arms is suspicious and should raise doubts about the entire document.
  • The company asserts that it is South African throughout the document. It is over-emphasised to the point that it loses credibility.  
  • The introductory section contains company details but the fact that there are several different fonts in this section raises further suspicion and suggests it was created at different times, alternatively added onto.
  • The company registration number is 2007/046293/23. This is a registration for a Close Corporation (CC) and not a company, which would be Pty (Ltd) for a private company or Limited for a Public Company.
  • It is a requirement of the Companies Act that the full name of the company be disclosed, including “CC” or “Pty (Ltd)”. This was not done in this form, which raises further concerns about its legitimacy.
  • An Experian background check into this registration number indicates that this entity is called “Snow Leaf Finance Dealers CC”. This is not disclosed on the form. According to this Experian report, this company has been deregistered. (Fin24 tried to verify the company's registration with the National Credit Regulator [NCR] which linked to Snow Leaf Finance Dealers CC. Stream Knowledge Finance gave Fin24 a new registration number to verify with the NCR, which checked out.)
  • The telephone numbers are given as +27 624840126 and 086 619 0699 for fax. The first telephone number is a cellphone number, which is consistent with a scammer and in conflict with companies. We can find no information on that telephone number. The fax number (086 619 0699) seems to be flagged to a company called Apex Finance Services. On Google search this company is linked to a fraud alert. We found a reference to “fake loan scam” where the public is warned that a person called Kgosi Pooe “offers loans and asks for a deposit upfront and then scams you out of your money”. The report was made in April 2013 by a person who was alleged to have been scammed in March 2013 in Boksburg.
  • The write up introducing the company makes use of incredibly poor grammar, which is consistent with scams and inconsistent with legitimate South African businesses.
  • This document says they are “legitimate”. No legitimate company would ever need to say that, but illegitimate companies usually do.
  • The accompanying forms ask for a lot of personal information as a “need to calculate the loan repayment schedule”. This exposes the unvigilant applicant to identity theft.

"There is nothing on this form which suggests that it might be legitimate. I have no doubt whatsoever that every person who responds to this places him or herself at risk," said Volker. 

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sarb  |  religion  |  scam  |  loan  |  money
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