Five signs you’re being scammed

Fourthly, the scheme is not registered with or regulated by any recognised authority.

Regulatory authorities are important because they monitor the conduct of financial service providers and protect consumers by keeping their best interests in mind. The protection provided by financial regulators also instils confidence in financial systems.

“Get-rich-quick” schemes are not registered and operate outside the framework of regulatory bodies. This makes investors more vulnerable to loss and makes it more difficult to seek legal recourse when the loss occurs.

Legitimate investments in South Africa are offered by authorised financial service providers and regulated by the Financial Sector Conduct Authority. You can search for any authorised financial service provider on the authority’s website.

Fifthly, they use the testimonies from existing members who’ve earned big bucks to promote the scheme.

At the initial stages, the scheme tends to pay out to those who have invested early, and these members are encouraged to share the news of their wealth (which travels fast and far) to promote the scheme.

But this is a tactic used to create the impression that you too can earn returns in the double digits. These schemes are both unsustainable and unethical as one person gets wealthy through someone else being deceived.

Too good to be true

It’s worth repeating that if it sounds too good to be true, then it probably is.

Wealth comes from a sound investment strategy and decisions made over time. Any promise to “get rich quick” should be treated with the cynicism it deserves. It will ultimately reveal its fraudulent nature. Recognising the signs of “get-rich-quick” schemes can save you from unnecessary financial distress.

It’s always a good idea to do your own investigation before committing your finances into any investment. You can find more information on the various types of scams through the South African Banking Risk Information Centre’s website and report them to the South African Fraud Prevention Service.- The Conversation

(48 VIEWS)