• South Africans lost over R1.5 billion to banking and card fraud in 2020 , with scams affecting various aspects of life , including investments .
• The recent United African Stokvel scandal illustrates the dangers of investment schemes , with over 600 people losing their savings due to fraud .
• Red flags for potential scams include pressure to recruit new investors , lack of clear underlying assets , and promises of guaranteed returns .
INVESTMENT SCAMS
As the cost of living continues to rise , many South Africans are seeking ways to grow their wealth . Unfortunately , this desire can make individuals more susceptible to scams .
A prime example is the recent United African Stokvel scandal , where over 600 people lost their retirement savings , homes , and discretionary funds to an unlawful scheme promising unrealistic returns . This highlights a crucial fact : if an investment opportunity seems too good to be true , it probably is .
Understanding the Landscape of Fraud
Fraud is becoming increasingly sophisticated , often leveraging modern technology to appear more legitimate . In particular , the rise of artificial intelligence ( AI ) tools has enabled scammers to create convincing schemes that lure unsuspecting victims . For instance , in the U . S ., 2022 saw a staggering 128 % increase in investment fraud , largely attributed to the misuse of AI .
The landscape is complicated further by the rise of online platforms that facilitate scams , making it essential for potential investors and property buyers to remain vigilant . The warning signs are there , but recognizing them can be challenging .
• South Africans lost over R1.5 billion to banking and card fraud in 2020 , with scams affecting various aspects of life , including investments .
• The recent United African Stokvel scandal illustrates the dangers of investment schemes , with over 600 people losing their savings due to fraud .
• Red flags for potential scams include pressure to recruit new investors , lack of clear underlying assets , and promises of guaranteed returns .
60 REI MAGAZINE NOVEMBER 2024