Personal-Finance

Even the moneywise get scammed

2018-08-03 11:07

About a year ago I was having coffee with an acquaintance who works in the financial industry. He is knowledgeable and well informed, so I was surprised when he told me about an amazing forex fund he had invested in which was making him a lot of money. The payout was due in a few month’s time, and if the profits were to be believed, he was guaranteed 8% a month (100% in a year) return.

I immediately questioned the validity of the fund as I know that no forex investment can guarantee any return, let alone such high returns.

He became a bit defensive and gave me a lot of reasons why the fund was able to deliver on its promises. He admitted that while he had a few doubts, he believed enough to put in a bit of money and see what happened.

As he is someone I believe to be well informed, I started to question myself and wonder whether there was something I was missing in his logic. Yet my gut, and experience of many years writing about scams, kept me suspicious. Nevertheless, I can see how someone else without my experience could have been caught up in the hype.

As I was throwing cold water on his enthusiasm he did not want to tell me the name of the investment fund.

I bumped into him recently.

It turns out the investment was a scam and that while he had only lost R20 000, some of his friends had lost their life’s savings.

When he told me the name of the fund I was shocked because I have written about the fund and even reported it to the then Financial Services Board, who investigated.

I could have told him a year ago he could kiss his money goodbye.

The moral of this story is that the same rules always apply: if it’s too good to be true, then it is.

Fraudsters can come up with all sorts of smoke and mirrors and use all kinds of fancy jargon to pull the wool over even financially sophisticated people’s eyes.

Don’t think this time it is different – the only thing that is different is the marketing story.

WARNING!

A reader wrote to us to warn of an investment scheme operating in Phuthaditjhaba in Free State which is offering unrealistic returns.

The Financial Sector Conduct Authority has forwarded the details to the National Consumer Commission for investigation.

The investment scheme is called Feedr Africa, and our reader became suspicious about the returns they claimed to provide.

They were promising to quadruple your money after two months. For example, a R2 000 investment would give you an R8 000 return. There is an upfront registration fee based on the amount you invest.

Read more on:

scam
personal finance
fraud
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November 18 2018