They take their time studying the environment to identify their potential victims. They follow them around, get to understand their routines and habits, then, when all is in place, they befriend them.
According to Andrew Lukhele, chairperson of the National Stokvel Association of South Africa (Nasasa), the fight against financial crimes continues unabated. “The Financial Sector Conduct Authority has issued a string of press releases during the past few weeks, to warn the public against suspicious and fraudulent investment schemes and financial advisors,” Lukhele says.
Over the years, we have seen a rise in different money scams disguised as stokvel groups. One that made headlines not so long ago was the so-called WhatsApp stokvel, it became very popular late last year and was later identified by Nasasa as a scam. According to an article by TimesLive, Nasasa warned people against the scheme, comparing it to a pyramid scheme that has underlying investments to generate returns for investors, and collapse when the recruitment of new members cannot be maintained.
There are a lot of scammers out there who claim to be running stokvels, when they’re really conducting illegal and risky pyramid schemes, and joining such a scheme will result in you losing all your money.
Read more: 4 benefits of having a stokvel bank account
For that reason, it is important that you only get involved in a stokvel you know and with members you trust.
Gloria Pooe, a member of Great Expectations Social Club, says, “I would advise any person who wants to join a stokvel or any social club to get to know the members or that group first before joining them, and I feel it much better and safer to be a member of a group with people you have known prior to the formation of the stokvel to avoid being scammed.”
She explained how she and a member of her group were shattered last year when they became victims of a scam, and it was someone they considered one of them. “A member of our group borrowed money from us and then disappeared without paying us back.”
The South African Banking Risk Information Centre (SABRIC) says it is very important for an individual to check if the stokvel is affiliated to Nasasa before joining. They also encourage individuals to make sure that the stokvel is legitimate and registered with a known and reputable association, before making any investment or parting with cash.
According to National Debt Advisors, a stokvel normally has a constitution – or an agreed upon set of rules – specifying the amount of the fixed sum to be contributed at regular intervals, when each member has their turn receiving the money and the roles and duties of each member.
“Don’t be tempted by the promise of large returns over a short period of time – stokvel savings usually accumulate over a whole year,” says Susan Potgieter, acting CEO of SABRIC. She adds that if the offer appears too good to be true, it is most likely a scam.
Read more: 4 ways you can avoid conflict within your stokvel group
SABRIC is currently not aware of any stokvel scams on the rise. However, on behalf of the banking industry, they continue to warn members of stokvel social clubs to always be extra cautious. Potgieter says, “The only scam we are aware of involving stokvels is the WhatsApp stokvel scam.”
And any pressure to recruit additional members, as with pyramid schemes, should be a warning sign.