Point of view: Expect investment opportunities punted via social media, Telegram, and WhatsApp to be scams

Scammers create false marketing material using the logos of well-known regulated companies and often the profiles of their executives. File photo

Scammers create false marketing material using the logos of well-known regulated companies and often the profiles of their executives. File photo

Published Jun 8, 2024


MEMBER companies of the Association for Savings and Investments South Africa (Asisa) have seen a sharp rise in fraud committed via social media channels in recent years, according to Jean van Niekerk, convenor of the Asisa Forensic Standing Committee.

This has prompted Asisa to warn consumers that financial services providers that are credible will never sell policies or investments via a WhatsApp group, Telegram, a social media platform, email, or an unsolicited random phone call.

“Asisa members have shared heartbreaking examples of how financially vulnerable consumers are frequently tricked into parting with the little money they have left. Most recently, a large asset manager alerted us to a WhatsApp scam using the profile and photo of the company’s CEO and targeting members of a support group for unemployed teachers,” Asisa said.

According to a report released recently by KnowBe4, titled 2023 Online Scams and Victims in Africa Report, about 800 African survey participants revealed they had fallen victim to an online scam at least once, losing thousands of rand in the process and compromising their personal data.

The report states that financial scams affected the most respondents (48%), with investment scams affecting 30% and crypto scams 29% of respondents.

Anna Collard, senior vice-president: content strategy and evangelist at KnowBe4 Africa, said statistics reveal a more evolved and sophisticated network of scammers who use emerging technology and emotive approaches in well-written emails as well as deep fake-enabled impersonations on WhatsApp and other messaging apps to lure people into making costly mistakes.

Van Niekerk said scammers create false marketing material using the logos of well-known regulated companies and often the profiles of their executives. This is distributed via social media, Telegram and WhatsApp groups with promises of never-to-be-repeated investment returns.

“When you are desperate, and you see the CEO of a big financial services company promise huge investment returns, validated by fake testimonials, it is easy to throw caution to the wind and click on a link or make an investment,” said Van Niekerk.

"Unfortunately, this often leaves people already struggling financially and completely destitute, and usually there is no recourse.“

He said CEOs of reputable companies would never promise investment returns to sign up investors or sell policies.

“If you come across a group where the CEO of a financial services company appears to punt investment returns, you can be sure that this is a scam,” said Van Niekerk.

According to Van Niekerk, companies usually find out about the scams conducted in their name when desperate consumers turn to them for help once they are ghosted by the scammers after handing over the money.

“Our appeal to consumers is to make an effort to check with companies before handing over money and not once it is too late,” said Van Niekerk.

“Consumers are quick to turn to social media platforms and WhatsApp and Telegram groups asking whether something is a scam instead of calling the company under whose stolen identity the fraud is being perpetrated.

“Instead of making an effort to establish whether you have been scammed once it is too late, do your homework before clicking on links or paying over money.”

Van Niekerk offers the following pointers to avoid falling victim to a social app or platform scam:

If you are tempted by an investment opportunity being promoted on Telegram, a WhatsApp group or any other channel, take the time to verify the opportunity and the company offering it.

Scammers will put you under pressure by making it seem that the investment opportunity is available for a limited time only to prevent you from doing the proper checks.

Telegram is popular with cybercriminals because of its anonymity features. If you are approached via Telegram with an investment opportunity or are encouraged to switch to Telegram to finalise a transaction, your alarm bells should be ringing. Reputable financial services providers do not do business via Telegram.

Asisa member companies will not ask you to open a cryptocurrency account to transfer money into an investment account. When this happens, you are about to be scammed.

No regulated life company, investment company or financial advice company will send you links requesting you to log in or share personal details via WhatsApp, Telegram, text messages, email or social media platforms.

Remember, you cannot invest in a regulated financial product without going through the verification process required by the Financial Intelligence Centre Act (Fica). Any process that requires you to deposit money without following this process is a scam.

Don’t fall for a scam twice by paying an advance fee when you want to realise some of the promised returns. Legitimate investment products do not require you to make a second investment in order to gain access to your investments.

If you are charged an annual premium for life cover without specifically requesting this, you are likely to be scammed. South African life insurers offer monthly premiums as well as annual or once-off premiums.

Asisa members will never charge applicants an application fee for an advertised employment opportunity.

If you apply for a short-term loan and the lender instructs you to pay application or legal fees to process your application, you are being scammed. Reputable companies will not ask for fees in advance for loan applications.

Van Niekerk said recovering your money is slim once you have been scammed. It is worth alerting the company in whose name the fraud was committed.

“This enables the forensics department of that company to investigate and alert other consumers. The company will also alert the industry regulatory body, the Financial Sector Conduct Authority (FSCA), which will alert consumers via the media,” he said.

According to Van Niekerk, if you have fallen victim to a scam, it is critical that you immediately alert your bank as well as the bank used by the scammer to receive your money via the bank’s fraud hotline.

“If you act quickly enough, the bank may be able to help you recover your money. If this is not possible, at least the bank can take action against the scammer and close the account to prevent the scammers from targeting more honest and hard-working consumers,” he said.

* Maleke is the editor of Personal Finance.