Schemes past and present
In the past year, the FSB has brought several schemes to public attention, warning that they are involved in dubious practices and must be avoided.
DefenceX: This is a Ponzi scheme that was most recently in the news when administrators PricewaterhouseCoopers issued a call for investors to register a claim before the end of August. If you were a DefenceX investor who lost money, you should visit the repayment administration web application website at rawa.co.za, or call 012 429 0033.
The scheme offered to pay investors 2% a day and by the time it was shut down, it had R350 million in the kitty.
The Wealth Hub: Most recently, the public was warned that The Wealth Hub, which claims to be a stokvel, is not registered with the FSB and is not an authorised financial services provider.
The scheme is under investigation by the National Prosecuting Authority for operating a pyramid scheme and for money laundering. To join the scheme, you had to recruit 39 members, each of whom had to pay R200 to join. You would have received a total of R7 800, which qualified you to move to the next level of the pyramid. As you reached new levels, you were required to pay an administration fee to management.
MMM: This is a new online scheme in South Africa that promises to pay you as much as 30% a month and calls itself a “social finance network”.
If you read the info box above, a high interest promise of 30% a month should already start ringing warning bells.
The minimum amount to join is R100 and you receive “mavro currency”.
You also get the bank details of another member and deposit your R100 directly into their bank account.
You can then buy and sell your mavro through the website, although there is no indication of the price.
The website says: “MMM plays just a role as some kind of a dispatch, which connect the participants.”
The poor English and bad grammar on the website should ring a second warning bell that this is a scheme you should avoid.