‘Don’t use unauthorised financial service providers’

Lyndwill Clarke, head of consumer education at the board, stressed the importance of ensuring that investment companies were authorised to provide these services to consumers.

“It is crucial to educate consumers around the dangers of dealing with unauthorised financial service providers and to create awareness on how best to set financial goals,” Clarke said.

“Consumers fall victim to scams too often, and it is, therefore, pertinent to highlight at this time, the importance of consumers conducting thorough research into their chosen providers to find out whether they are registered and authorised.”

Clarke added that there were major risks in investing with unauthorised financial services providers, including the risk of losing money.

“It’s also important to note that all providers are required to be authorised by the FSB, any unauthorised services provider is illegal. All authorised financial services providers are issued with an FSP [Financial Services Provider] license [and this] must be clearly displayed on all advertising and correspondence,” he said.

Clarke concluded that the board was continuously working with government, regulators and financial service industry bodies to create awareness on the dangers and implications of using illegal savings and investment vehicles.

Other things to look out for include:

•  If it is too good to be true, chances are it is
•  The company has a vague business model which you don’t understand
•  You are pressured to take up a product
•  If there is only a website with no physical address available
•  You are made promises of guaranteed returns on products where there cannot be guarantees.

Details: www.fsb.co.za; 0800 110 443 toll-free.

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