Unregulated Schemes

In a media release, issued on 27 May 2015, Caroline da Silva, the Deputy Executive Officer for FAIS at the FSB warns the public against conducting business with schemes before verifying whether it is registered with the authorities:

“Whenever we receive such queries we first ascertain if there are any regulated entities involved. Where we have no jurisdiction we continue to co-operate with the appropriate regulator so that action can be taken.”

The FSB has seen a significant increase in investigations of investment schemes that resemble “Ponzi schemes” or entities taking investments under the guise of being authorised financial services providers and as such consumers need to be vigilant and avoid participating in this type of schemes.

Investors or consumers who are lured into such schemes carry the risk and obligation to enquire into the merits of the investment before parting with any money.

“It is critical for investors to ensure that they seek the advice of a reputable and accredited financial adviser before parting with any hard earned cash,” says Da Silva.

The media release further states:

“As with all such queries that fall outside of the regulatory net of the FSB, these queries have been forwarded to the South African Reserve Bank and the National Consumer Commission, two institutions which are duly authorised to investigate and take appropriate action.”

Three separate entities are listed in two media releases:

  • Wealth Hub
  • KIPI Investments
  • Mydeposit247

Personal Finance also published an interesting article on this on 9 May 2015.

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