One of the best ways to protect yourself from scams is to know what they are. Cons are everywhere, and they can be tough to spot. When you're looking for a new job, buying a home or just trying to make ends meet, it's easy to get overwhelmed by financial stress.
That's when scammers step in and offer a solution — but it's not one that benefits you. Becoming a victim will probably leave you going through quite a sour holiday period, so let’s dive into ways to spot and avoid potential scams.
Understand the basic structure of a pyramid scheme:
Often if the scam in question is in the form of a pyramid scheme such as MMM years ago or WhatsApp stokvel recently, then there are some things they’ll have in common that you can spot from a mile away:
- You buy a product or service
- You sell it to others
- You recruit people to do the same
If most of the money is made in recruitment, you are likely dealing with a pyramid scheme.
Be aware of the tactics scammers use:
When making financial decisions, taking note of your emotional state before committing to anything is essential. People with bad intentions can take advantage of your vulnerable state when you feel scared, rushed, or confused. For example, scam emails can trick you into accidentally sharing sensitive information by crafting a scary situation like a false account deletion request.
If it’s too good to be, it probably is:
I cannot emphasize this enough, but if someone is explaining a product, investment or idea to you and you feel excited, try not to agree to anything before you can calm down and think clearly. Ask yourself questions like, how reasonable is it for someone to offer me R5000 from a R200 investment? From where would they be getting that kind of money? If they could make that money for themselves, what incentive do they have for sharing? And so on.
Trust but verify:
Even if an “investment opportunity” comes from a friend you trust, always research the information you are receiving and fact-check everything. Sometimes your friends can lead you astray even with the best intentions.
Refer to official channels:
Each country has a relevant authority to register to offer financial services. In the case of South Africa, there is the Financial Sector Conduct Authority, which can help you verify the registration of the company you intend to do business or investments with and check which products and services they are allowed to offer you.
Learn further
There are many other kinds of fraud and scams that you could potentially come across. Read up about them and their prevention. As you increase your knowledge about these scams, you become less likely to fall victim to them.
Even during financial strife, don't be too desperate to do due diligence. Scams are everywhere, and learning about them will allow you to protect yourself from them. What are other things to look out for to avoid getting scammed?
Article by: Afrika Kesho