Investment scams are becoming more intelligent, more sophisticated, and more convincing than ever. What once looked like a shady pamphlet on a corner, now appears as a high-gloss video hosted by a well-trusted public figure.
The combination of deepfake technology, social media manipulation, and shady dealers plugging unregulated investments, is forcing South African investors to navigate an increasingly hazardous landscape.
“Our ability to manufacture fraud now exceeds our ability to detect it.” (Al Pacino)
If you’re anything like us, the chances are you’ve recently heard about someone in your circle who’s fallen prey to an internet scam. Enticed by glossy marketing, unbelievable returns, and what seemed to be valid endorsements, they invested their life savings – only to discover too late that it was all a fraud.
New-age scams, same old heartache
The Financial Sector Conduct Authority (FSCA) has issued several warnings this year about scammers posing as licensed financial firms. Using WhatsApp groups and doctored videos, the scammers have impersonated genuine financial practitioners, without their knowledge or consent. The FSCA has confirmed that such impersonations are fictitious and unauthorised and issued the following warning:
“Anyone offering financial services in South Africa must be licensed. Always verify a firm or adviser’s registration on the FSCA website and request their Financial Services Provider (FSP) number.”
Deepfakes: The new frontier of fraud
Deepfake technology, which utilises artificial intelligence to create realistic yet fake images, videos, or audio, is now a powerful tool in scammers’ arsenals. Earlier this year, bogus videos circulated of Patrice Motsepe endorsing two scam websites, both of which are being investigated by the FSCA.
Red flags
The FSCA urges investors to be careful and look out for the following red flags:
- Guaranteed high returns. If it seems too good to be true, it likely is.
- Advertising solely on social media. Scammers are likely to be on WhatsApp, Facebook, and Telegram.
- Urgent pressure to invest. Urgency is a control tactic—don’t rush.
- No information about the product. Genuine advisors are open and forthcoming.
- Upfront “unlock” fees. You shouldn’t pay to get into an investment.
- Training fees or qualification hurdles. Avoid any scheme that requires you to pay to qualify for returns.
How to stay safe
Before you part with your money, take these five simple steps:
- Check FSCA registration. Go to www.fsca.co.za to verify the firm’s license and FSP number.
Ask searching questions. A regulated adviser will inform you exactly how returns are made and the risks associated with an investment.
- Be wary of social media adverts. Serious financial professionals don’t do business on WhatsApp.
- Speak to a Certified Financial Planner (CFP®). They are legally bound to act in your best interest.
- Report suspicious activity. Alert the FSCA or the police if something doesn’t feel right.
Final word
Now that even people you know well can be convincingly impersonated, vigilance is more crucial than ever. Investment scams aren’t just a possibility – they’re an expanding reality. The best defence is to stay informed, challenge everything, and never be hurried into a decision.
Before you invest in anything, especially if it sounds too good to be true, please call us. Getting a second opinion could save you from a very costly mistake.
Disclaimer – *The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
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