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South African Reserve Bank warns of ‘get-rich-quick’ schemes
Published Date:
2013-09-26
Last Modified Date:
2020-10-08, 08:07 PM
Category:
Media > Media Releases
The South African Reserve Bank (SARB) has launched a national campaign to raise awareness of illegal deposit-taking schemes also known as pyramid or Ponzi schemes.Titled ‘Don’t say bye-bye to your money,’ the campaign encourages members of the public be to exercise extra caution when choosing potential investment opportunities. Speaking at the launch today, Hlengani Mathebula, Head: Group Strategy and Communications, said that the campaign would educate people on how to recognise illegal deposit taking schemes and avoid them. “You can never be too careful when it comes to protecting your hard-earned savings. Get advice from an accredited and registered financial services provider before you invest your money. Accredited financial services providers are regulated and supervised by either the SARB, the Financial Services Board or the National Credit Regulator. Do not just rely on advice from promoters or friends who may have benefitted from their ‘investment’,” said Mathebula. In pyramid and Ponzi schemes, for everyone who makes money, others will inevitably lose their money. “It’s an old cliché, but it rings true. If it sounds too good to be true, it probably is.” added Mathebula. There are also some economic consequences to illegal deposit-taking schemes. In some cases, people have raised loans with commercial banks and micro-lenders to invest in these schemes. The money is then lost when those schemes collapse, but still they have to keep up the repayments to the lending banks for loans taken. Thus, such schemes absorb the savings of the population, which would otherwise be invested in the country’s financial system. The value of people’s investments in these schemes varies enormously and can run into millions of rands. The schemes also vary considerably in size depending on how long they have been in operation. Small schemes involve between 20 and 1 000 people, while a large schemes can have as many as 500 000 ‘investors’. Early detection of suspected schemes and consequent inspection may result in fewer people being affected. The campaign will be publicised primarily on radio stations in all eleven official languages over the next four weeks. The SARB will also be partnering with the Financial Services Board, the South African Police Service and commercial banks to spread this message. For more information visitwww.resbank.co.za or contact the Financial Services Board's Fraud and Ethics Hotline on 0800 313 626. EndsIssued by Hlengani MathebulaHead: Group Strategy and Communications For more information, contact:Candice JeffreysMedia Co-ordinator: South African Reserve BankTel: 012-313-4209Mobile: 082 069 9421E-mail:candice.jeffreys@resbank.co.za OrNosipho TheyiseMedia Co-ordinator: South African Reserve BankTel: 012-313-3465Mobile: 076 569 2545E-mail:nosipho.theyise@resbank.co.za