South Africa is a country with a very strong economy with more than 2.5 million tourists every year. One of the main attractions of South Africa is its gold mining industry which makes it very profitable for foreign investors. If we want to characterize the country’s economy we can say that it is industrialized and the advanced economic conditions make it also efficient in the financial market. Due to the fact that the demand is massive for the financial market in the country from the general public as well as from investors, the scammers have been activated recently and have found a lot of decent investors who were willing to invest a good amount of money.
There have been plenty of reports that state that a lot of investors have been scammed either by the citizens of South Africa or the companies that were established on the financial market, which is considered to be the hub for foreign investors. Every time, the scammers are trying to find unique ways that were not tried out before and this is why the investors are having great trouble with differentiating the truth and the fraudulent activities. Scammers impersonating airport officials, engaging in unexpected conversations, stealing from backpacks or luggage, even impersonating taxi drivers who transport customers to unfamiliar areas to deceive them are instances of these fraudulent activities.
The list does not stop here, at its peak, numerous South African investors lost more than $13 million bitcoin due to fraudulent activities. This is one of the most well-planned currency frauds in South African history, and there are numerous more of similar scale or worse. It is true that there is a strong regulatory body in South Africa, such as the FSCA Forex regulation which has the obligation to ensure the security of the clients. Before the scams became so active, the companies were less regulated and restricted to start their activities. However, the active fraudulent activities made them think about monitoring and regulating the financial activities even more.
Willi Breedt, the architect of the above-mentioned scam was the CEO of Vaultage Solutions, which is now bankrupt, and reportedly defrauded many investors out of over 227 million rands before fleeing to another country when things got nasty. It all began when the con artist unexpectedly cut off all communication with his victims and went on vacation. It is also worth mentioning that he was under investigation after repeated reports from the investors who were having touch with him, during which he halted his business, and it is reported that he went into hiding while the investigations were ongoing. According to local news sites, Breedt believed that his problems began in 2019 when the cryptocurrency market crashed.
However, the fact is that the market quickly recovered allowing him to recoup all of his losses. Because the slump was relatively temporary, lasting only one day before being regained the next, all losses were recouped. Breedt, on the other hand, maintains that the collapse drove him bankrupt and that he went into hiding to evade his clients. Investigations that were executed on his bank account revealed the fraudulent activity, as some of his investors claimed to have $3.15 million on their account one day and nothing was left the next day, which was added by the fact that Breedt was unable to be located.
Breedt’s activities have not delighted members of the crypto-industry, especially in South Africa since they reflect back on them as untrustworthy even though they might not be doing the same. But, more importantly, it has become so ubiquitous in the nation that investors have become accustomed to it. Despite the fact that scamming is still a major problem in South Africa and major bitcoin scam has made it even more clear, investors have taught that they should measure all the security norms before actually committing to any contract with any company.
Other than the example that was mentioned above, there are so many interesting cases of fraudulent activities in South Africa that are worth reviewing in order to raise awareness about the scam cases and for investors to act more carefully.
WhatsApp gifting groups
The MLC 24/7 operates in a similar manner, but with a more community-based approach. There are 5 members of the groups who have made an agreement to put money into an account, with a certain amount of time, and then hopefully to cash out their gains. The members may also make money by selling their concept to the beginners in the industry who will be included in the group via invitation. Many individuals mistook the giving group for a stokvel, but it was actually a system with no established rules or regulations, that they were obliged to obey.
Fake real-estate agents
Suspects prey on victims who have limited knowledge of the real estate market and are unfamiliar with the process of purchasing or selling a home. This especially applies to the foreign investors who are unfamiliar with the market in South Africa and try to find the companies that are able to provide them with the proper help.
Fake agents pretend to be in the process of facilitating the entire deal, after that, the suspect would generate a forged contract and as the customer deposit a significant amount of money as a security deposit. After that those clients do not hear from the real estate agents anymore.
Building and renovations
While many people endeavor to transform their residences into homes, there are always suspicions lurking in the shadows waiting to snare home hard-earned cash. Suspects frequently post photos from the internet along with descriptions of their amazing restorations on social media websites. Clients that are eager to enjoy the high life will likely contact you. The suspect may not flee right away. Instead, they might even visit the home, conduct inspections, and collect the proper measurements.
They obtain quotations, sometimes materials, and draft a legitimate contract. Clients who are enticed by the glitz and loss prices pay sometimes 50 or 60 % deposit. Mostly, these individuals will even visit a client’s home and construct a foundation, but as soon as the check clears, they will vanish leaving victims with nothing but a shoddy foundation and a piece of their funds blown away.
Road Accidents
More attorneys have been imprisoned this year for defrauding their clients of their successful Road Accident Fund settlements. Clients come to firms for help with claims but after the payout is finalized the business keeps all or a large amount of the money and only pays the customer a fraction of it, if at all.
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