Scam artists are everywhere; the most common scams in South Africa are well organized. Generally speaking, if a deal is too good to be true it could be a fraud. There are a bunch of scams out there waiting to prey on innocent people. In this article we take a closer look at the types of scams and most common scams in South Africa today.
The 419 Scam is also known as the Nigerian Scam. The scammer will send a request to the target asking them to send some money. Once the money is received the scammer will ask for additional money that will cover the transfers. As a reward, the person sending the money will receive a sender’s commission. This commission is usually a large sum of money that is equivalent to millions. After the scammer receives all the funds, they disappear.
This sort of scam is almost always done through an email. The scammer uses a variety of reasons for the transfer. One of the most popular reasons given is that the government will freeze a Beneficial’s account. These reasons sound very convincing to people and they can easily fall victim to these traps.
How to protect yourself from a 419 Scam
Don’t ever respond to suspicious emails that sound too good to be true. Always remember that scammers try and gain your trust by compensating you with the impossible. It’s to pick up a suspicious email by simply looking out for these things:
- Poor spelling and grammar- The language used in the email is often not that great. Lookout for spelling errors and bad grammar
- U.S currency- Most of these scams only use U. S currency in emails sent
- Bank details from a foreign country- The scammers usually make believe that the funds are stuck in a foreign country. Thus, they use bank details from a foreign country.
- A large compensation- The victim is almost always promised a large number of money back in comensation
Bitcoin is one of the fastest growing crypto-currencies in the world. Everyone wants to invest in Bitcoin because of its rapid growth. Crypto-currency is said to take over the world in the near future.
Unfortunately, whenever something great comes along opportunists find a way to strike. There have been a number of Bitcoin scams that have been reported in the last few years. These scams are often well executed and look good on paper. Most of the Bitcoin scams that are out there are posed as “market places”. They grow their network through online platforms that require users to register online.
Once registered, clients “invest” their money in the various networks. These networks use algorithms and artificial intelligence to supposedly enhance trading. The next step of the process promises to increase returns on Bitcoin. The returns are often ridiculous percentages that are too good to be true.
Other methods used to scam people with Bitcoin are Ponzi schemes and Pyramid schemes. These schemes capitalize on making people believe that they can make a quick buck. The main reason that people fall for these scams is because they believe that they are “investing” their money.
South Africa has faced two of the largest crypto scams in the world. These scams have amounted to over $4 billion dollars that have been stolen from victims.
Africrypt was one of the companies that managed to steal a whopping R51 billion. The company originated in Durban and was founded by two brothers.
The organization was said to use artificial intelligence to invest money. Africrypt got users to deposit money into their account. Once the money was deposited they promised to purchase Bitcoin for their users. The company had over 69,000 Bitcoin (R51 billion) in 2021.
Later in April 2021 the CEO of Africrypt informed its clients that their system has been hacked. He further explained that because their system was hacked, all the funds were stolen. Furthermore, he asked clients not to inform authorities as it might be harder to recover the “stolen” money.
Strangely enough, employees had also lost access to the system a week before the “hack”. Later, a law firm concluded that clients’ money was unlawfully transferred to Bitcoin pools. To further understand what this means, once funds are transferred, they become untraceable.
The founders of the company disappeared and went into hiding. They have denied ever committing any wrongdoing. Raees Cajee, owner of Africrypt spoke to The Wall Street Journal and denied that the company had handled $3.6 billion. According to him and his brother the company managed just over $200 million.
Africrypt has since been liquidated and liquidators can now try and trace their missing funds.
Mirror Trading International is the second company that had been involved in a Bitcoin Scam. They presented an investment platform that asked users to for $100. These funds would then to be transferred to a forex trading platform. Artificial intelligence would assist the high-frequency trading in producing an alleged 0.5% return.
They also encouraged users to refer family and friends via various social platforms. Once a current member recruited a new member they would get a reward.
The company came under hot water once it got unwanted attention from Texas State Securities Board. They were issued with a “cease and desist” order for illegally soliciting Texans to purchase fraudulent investments. Later, Mauritius and Canada also warned its citizens by listing MTI as a fraudulent company.
In 2020 the South Africa’s Financial Sector Conduct Authority (FSCA) opened up an investigation to MTI. They found that the company was operating without a license. They expressed great concerns about the funds MTI held. Soon FSCA issued a warning to the public about the unlicensed company.
CEO, Johann Steynberg made an announcement that the company had a big vision and that it scared people. This statement was issued to try and get people to still have trust in the organization.
What followed next was unfortunate to all those who had invested in MTI. Users noticed that their withdrawals weren’t reflecting in their accounts. By this time, the company had over 260,000 members globally.
In December 2020 a criminal case was opened and the CEO had disappeared. The company was soon liquidated and the FBI is currently helping liquidators recover funds from all around the world.
Social media Bitcoin Scams
Ever so often one might stumble across a suspicious social media profile. These profiles have tools and information that you can use to learn how to trade crypto-currency.
They even go as far as to message individuals to try and get their attention. The message usually tells users how they can earn money quickly by investing in crypto-currency. Once the user responds they ask you to download an app and send funds to purchase Bitcoin.
The app shows daily growth of the money invested and makes users feel financially secure. However, when the user wants to withdraw money earned they cannot. They then message the scammer and once again get scammed further. The users are told to upgrade the app and pay additional fees to gain access to their profits.
Prevent yourself from being scammed by crypto- companies
Unfortunately not enough people have enough knowledge about crypto-currency. This makes it extremely easy for anyone to get scammed with crypto-currency. There is so much that one needs to know about crypto-currency before investing in it.
The best way to prevent being scammed is to educate yourself about the ins and outs of crypto-currency. Never take anyone’s word for it no matter how legit a company might seem. Most of these companies actually mask themselves behind really good tech. This can be very misleading to people because everything looks so professional.
These companies have the resources and power to gain access to funds at all times. All it really takes is setting up a business module and making it look legal. With that, people can easily fall into the trap and believe that they’re investing in Bitcoin.
Forex scams are becoming increasingly popular in South Africa. The most common of these scams are getting individuals into believing that they’re investing money into equities and companies. People get fooled into believing that these scams are legit because of the high returns.
Recently, the Hawks arrested Prince Nkosinathi Mazibuko who was a forex trader. He allegedly lured people into investing into his company. Prince promised investors that they would receive an 80% monthly return. Sadly, Prince didn’t pay out any of the returns to the investors.
How to spot a forex trading scam
The best way to spot a forex scam is to take note of the returns. Most of these scams often have a very attractive profit return. Furthermore, there is little to no risks involved in these investments.
These forex scams also give a 100% guarantee that share prices will always increase. It’s important to note that there is no guarantee when dealing and investing in forex markets. All returns are market dependent, with no guarantees.
Always be on a lookout for software and programs that have the “formula to success “. The most important thing that anyone interested in forex should do is learn the market. Understanding the market and learning to trade will give you all the insight you need to spot a scam.
If you do happen to deal with a forex broker do as much homework as possible. Find out if the broker is regulated and licensed to trade in the financial industry. If the broker is regulated and licensed, find out if it’s froma reputable and trustworthy body.
The popular online shopping platform is a well-known house hold brand known to many South Africans. They sell just about anything you’re looking for and are an excellent online shopping option. With more people moving online after COVID there has been an increase in online scams and fraud.
Web survey scam
Recently, Takealot verified that they had been targeted by a scam syndicate. A webpage known as “Takalot South Africa” was created to try and lure people into partaking in a survey. This “survey” was said to help Takealot improve their services and quality. Once people took the survey they were promised to win a Samsung Galaxy S-21.
These fraudulent competitions made their way through to social media platforms, WhatsApp and even SMS. Once a person entices in the competition they asked to deposit money to be entered into the competition. Thereafter, the scammers message back informing the victim that they have the phone that they won. In order to receive the phone an additional payment needs to made in order to have it delivered.
The entire “survey” page was designed to look like it’s a promotion and rewards program from Takealot. Unfortunately, this fooled a bunch of people because everything looked authentic.
Unlocking deals scam
Another Takealot scam that has been making its way around is the unlock deals scam. This scam makes people believe that they can unlock incredible deals by making a R30 payment. Targets are asked to fill in their personal details. Upon doing so they’re promised to receive special prices on certain items.
Job applications scam
The next Takealot scam is the job applications scam. Scammers created an entire job application process making candidates believe that they can apply for certain positions. Once they apply for the position they asked to pay a once-off administration fee. The fees that need to be paid differ depending on experience. Some job applicants were told to pay between R160- R370 just to apply for the job.
Be safe from Takelot scams
These are the most common scams in South Africa at the moment, as mentioned on the Takealot website.
Takealot will never ask you to make payments if they’re running a competition. Always ensure that you check the website domain before participating in any activities. Alternatively you can check out the Takealot app for additional information.
Don’t ever fall victim and pay administration fees when applying for a job. If something sounds unrealistic, it typically is. If you are still unsure about something, contact Takealot directly on the following number; 087 362 8000. This line can also be used to report any suspicious activites.