THE SCHEME OF THINGS TIPS ON HOW TO AVOID FALL­ING INTO THE TRAP

CityPress - - Business -

The SA Re­serve Bank has pro­vided the fol­low­ing tips to help you iden­tify get-rich-quick schemes that will re­sult in you los­ing your money:

When choos­ing a busi­ness op­por­tu­nity, do your home­work thor­oughly.

Get ad­vice from reg­is­tered fi­nan­cial ad­vis­ers. This is avail­able free of charge with no obli­ga­tion.

Take your time. You didn’t save your money overnight. You shouldn’t be rush­ing to in­vest it in the first scheme you come across.

A big red flag should be “op­por­tu­ni­ties” that prom­ise to make you wealthy in a very short pe­riod.

Be­ware of a “se­cret for­mula” that will only be shared with se­lect in­vestors.

Watch out for pre­sen­ta­tions where you are flooded with im­ages of the lifestyle you will be able to af­ford, yet there are very few de­tails of the prod­uct or ser­vice you are sup­posed to be selling.

Sales­men who are not able to ex­plain their busi­ness model clearly and do not have or are not will­ing to let you take their sales brochures or prod­uct in­for­ma­tion home to read over at your leisure.

Only deal with ac­cred­ited fi­nan­cial in­sti­tu­tions. You can check their ac­cred­i­ta­tion with the Fi­nan­cial Ser­vices Board, the Re­serve Bank or the Na­tional Con­sumer Com­mis­sion.

If you are slightly un­com­fort­able be­cause of a pushy re­cruit­ment agent, walk away. If the in­vest­ment of­fer is le­git­i­mate, it will not dis­ap­pear overnight.

The golden rule is that if it sounds too good to be true, it usu­ally is.

Fraud hot­line

To re­port a pyra­mid scheme, visit res­bank.co.za, where you can fill in an online form. Al­ter­na­tively, if you want to find out if a busi­ness is ac­cred­ited, con­tact the Fi­nan­cial Ser­vices Board fraud and ethics hot­line on 0800 313 626

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