CAPE TOWN – The Financial Sector Conduct Authority (FSCA) on Monday warned the public not to deal with an entity called Karatbars International GmbH.
“Karatbars International GmbH is not authorised in terms of the Financial Advisory and Intermediary Services Act, 2002 (FAIS Act), to render any financial advice and intermediary services,” the FSCA said in a statement on Monday.
The FSCA said it was informed that Karatbars International GmbH had been offering investments to customers via WhatsApp. Karatbars International GmbH is based in Germany and is not authorised to render financial advice and intermediary services in South Africa.
Karatbars uses a multi-level marketing (MLM) system, although it prefers to describe itself as an an e-commerce company with an affiliate programme.
MLM, also called pyramid selling, network marketing, and referral marketing, is a marketing strategy for the sale of products or services where the revenue of the MLM company is derived from a non-salaried workforce selling the company’s products/services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation commission system.