FSCA update: New warnings and scams you should know about

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JIMMY MOYAHA: It’s Wednesday, and as promised, we’re going to keep on this path that we’ve gone down with our friends at the FSCA [Financial Sector Conduct Authority] in order to ensure that you – as our listeners and as consumers and as South Africans – are kept in the know around what’s happening, particularly in the financial services sector, and what you need to be aware of.

In keeping with that, I’m joined on the line by the head of enforcement at the FSCA, Gerhard van Deventer, to take a look at some of the latest developments from the FSCA. Good evening. Gerhard. I’m always happy to speak to you.

The last time we spoke, there were a couple of developments. There was the pronouncement of the penalty that was levied against the late Markus Jooste. I guess that was the last conversation we had around enforcement matters from an FSCA perspective.

Read/listen: FSCA cracking the whip on infractions

Let’s take it from there and get an update around some of the enforcement matters that you’ve been involved in. I know there’s been a slew of new fines and adjustments that have been made – or pronouncements that have been made – by the FSCA lately.

GERHARD VAN DEVENTER: Yes. Thank you. Good evening Jimmy, and good evening listeners. May I just start off by saying thank you so much for doing this. Enforcement is one thing, we do that. We take it very seriously. But if somebody doesn’t help us to get the message out there, then the ‘visible’ part of visible enforcement falls away. So I’m really speaking on behalf of the FSCA, and am very grateful for this type of initiative. It really helps a lot.

Yes, I think we were all a little bit surprised with the Steinhoff/Jooste development, and I know there were a lot of questions around it, and a lot of people wanted to know what happens to the penalty, etc. I think we’ve already explained that the penalty is likely a civil case, so it stays, it doesn’t fall away. It’s not like a criminal penalty. So at some stage, the FSCA will consider whether it’s going to be levied against the estate or not, but of course, the investigation itself continues because there are other people involved as well. But I don’t think you really want to talk about Steinhoff and Jooste.

Read:


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Apart from that, there have been some interesting developments. I have to say, Jimmy, if I mention one thing that stands out at the moment, it must certainly be impersonation.

Just everything I see seems to be an impersonation. Now we obviously don’t investigate every case. What we at least do is to try to warn the public about it. But it does seem to be the flavour of the day.

In the last week or so we’ve issued so many public warnings about impersonators.

Some of them are just downright funny – you can’t believe people will fall for them. But some are very sophisticated, so the public needs to be extremely careful with these things. I can mention a few if you like.

But the other thing I think that’s certainly part of the trend is that our scams have now very successfully moved to social media platforms. If I just look at what I’ve seen in the last few weeks and maybe months is [those on] Facebook, WhatsApp, and Telegram. That’s where these people find a place to operate.

The first thing I want to say about that is that you have to understand that legitimate businesses that are going to look after your wealth or do your investments are not going to do business on WhatsApp or Facebook or Telegram.

I hope not. So that should be your first huge red flag.

I don’t know if you want me to speak about a few examples. I’m happy to do that.

JIMMY MOYAHA: Let’s get into those examples, Gerhard. I mean the impersonation thing is quite a real one to the extent that, as you said, there are a couple of different types of impersonation scams out there. The South African Banking Risk Information Centre, along with the FSCA, issued a warning around those that are impersonating banks. So people are cloning websites, creating banks.

Just on our own side as well we’ve been reporting on a story that has seen Moneyweb being attacked as well, as part of this impersonation thing.

We broke the story around the impersonation of celebrities such as Elon Musk and Johann Rupert, and obviously we’re seeing that these scams are not limited in scope. They impersonate people, they impersonate companies, they impersonate anything that is credible and we know that the FSCA itself has been impersonated.

Read:


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GERHARD VAN DEVENTER: Absolutely correct. There’s certainly no limitation on creativity either, Jimmy. It’s unbelievable. And you’re right, we’ve also been a victim of this – including our commissioner’s photo and all.

It’s most unfortunate because with entities like Moneyweb and the FSCA and so forth, a mentioning of that or an association with that immediately gives some credibility to a scheme. I don’t think you can blame the public, but everybody is in such a hurry and so busy that if you see something like that you relax and are more likely to miss the red flags.

And yes, the Elon Musk one that you were talking about, the Odyssey Investment Group – that’s where they claimed that Elon Musk was starting a new currency. Now, who wouldn’t want to get a part of that?

That is actually one of the warnings that we put out [about the] Odyssey Investment Group.

Yes, I know about the Moneyweb one, and people believe it.

Read: FSCA sounds alarm on ‘Moneyweb-Invest’

Some of the other ones are so well done. I just looked at some of our warnings in the past week. You see a crowd pop up as Latitude Revenue Investors, and then there’s an association with Latitude Wealth. Latitude Wealth is an authorised, legitimate, financial services provider. But you see that name, and you immediately feel better about it.

There’s another one. We’ve got a very well-known group in South Africa, Sygnia Group, Sygnia Asset Management – they’re also into insurance. So ‘Sygnia Trading’ pops up. And there are so many of those. Swift Crypto Trade impersonated the JSE.

So you’re absolutely right, nobody’s left alone.

The best advice I can put out there – and thank you for putting it out there – is to phone the actual company [referred to]. Find the number somewhere else, phone the company and speak to somebody at the company.

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But always remember that if you get any communication from anybody – authorised, legitimate, lawful or not – and the offer is just ‘too good to be true’, it’s because it is too good to be true. So that unrealistic return is certainly your first big red flag.

And the other one that you, Jimmy, and I have spoken about before is that vagueness about the product, vagueness about the process. That’s another one that people must be on the lookout for.

I suppose the bottom line is don’t take another step if you have not confirmed that this is the actual company you’re working with, or the actual person and people like Elon Musk and Johann Rupert and so forth – you would’ve noticed that there are two parts to that.

The one part is of course, AI, a big issue. But the other [thing] is just the photo. Anyone can just place the photo there. It’s easily recognisable and it brings that comfort to people who don’t look into it any further.

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JIMMY MOYAHA: Absolutely. Ladies and gentlemen listening, I want to make something very, very clear, because this is something that has been going on long before I started doing the show, long before this initiative from the FSCA.

As Gerhard mentioned, if it’s too good to be true, it is – and apply some logic, please. The chance that Elon Musk would reach out to you to offer you an incentivised deal, to be part of something, is very, very slim.

There’s nothing against South Africans and our ability to work with international institutions, but the whole point of [discussing] these scams is so that we are all educated and aware of the realities that are out there. As we’ve said, [scamsters] are not afraid to impersonate the commissioner of the FSCA, they are not afraid to impersonate wealthy individuals in South Africa.

Just be exceptionally cautious in what you do.

Gerhard, as we wrap up the conversation, the warnings that were issued – I know the FSCA has a whole web page, a whole website, where you actually upload each and every warning that has been issued to the public.

Can you share with us just some of the investigations that you may be able to speak to at the moment, some of the companies that individuals need to be aware of or need to be on the lookout for, about whom warnings have been issued, because for a lot of time, we have wanted to get ahead of this. It’s one thing to see the warning, but that’s a bit late.

By the time the FSCA has issued the warning, it means somebody’s already been a victim. How do we get ahead of this?

GERHARD VAN DEVENTER: Yes, I hear you. So we’ve actually taken the warning part, the public warning part of the website, and we’ve moved it to the landing page.

So the first step for members of the public is to go and see if the name of the company is [on our site]. That is very important.

But the names that you see there are companies or entities or persons that we are not likely to investigate further. We’ll hand them over to the police. It’s clearly a scam. We just want to put it out there so that people know what’s going on.

When we do our actual investigations, when we do full investigations, we have a kind of a case-selection policy, so we focus on cases that will have the most impact.

And of course we focus a lot on our biggest issue – registered entities or regulated entities that go astray. If you look at something like any ‘FG’ that’s under investigation; there’s a fixed story. This was an entity that actually did have a licence.

If you look at the Medbond, MedCon Financial Markets case, that is also under investigation. We’ve certainly gone quite far into that investigation. All of those cases eventually end up with a lot of sad stories.

Some of the other cases – well, one that’s finished – include of course Pioneer Markets. But a lot of the cases that are also a big worry to us are these online trading platforms, and the mirror trading that takes place there – the Master & Slave accounts and mirror trading. We can spend some time on that at another stage. Those are all things that are of great concern.

Read:


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The one bit of undertaking I can make is when we finalise a case and we take enforcement action, we make it public – each and every case. We have no choice. We’ve written that into the law.

Sometimes I’m very secretive about cases. I’m very sorry about that, but that’s [because] I have no choice there.

But there does come a time when I can tell the world what we have found, so that’s a bit of good news

JIMMY MOYAHA: We’ll continue to harp on about this. We’ll continue to do the little that we can do to bring visibility where it is needed. The FSCA knows that in our show, at least, they always have a friend and always have support.

If anyone out there is listening and wants to attempt to impersonate anyone, impersonate me, impersonate anyone that I know, be warned: we will find you, and we will make it a very difficult time for you.

We’ll leave it at that. Thank you so much, Gerard. That was Gerhard van Deventer, the head of enforcement at the Financial Sector Conduct Authority, joining me this week for our Warning Wednesdays as we continue with our consumer education.

Harry Byrne

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