Gauteng / Investment fraud
Familiar-sounding company used to win investor’s trust
A credible-sounding company name and promises of direct market access persuaded an inexperienced investor to entertain an unsolicited financial offer.
Leon Diedericks says he agreed to meet a salesperson after being contacted by a company whose name sounded similar to that of a well-known financial business.
During the call, he was allegedly told that he would be able to trade directly on the stock exchange.
“The name of the company actually sounds like a well-known company. They called me and made an appointment, telling me that I could directly trade on the stock exchange.”
Leon Diedericks, complainant
As someone with no previous share-trading experience, Diedericks believed the offer could provide him with a practical way to earn additional income.
Why familiar names lower defences
His account highlights how a credible-sounding company name and promises of easy market access can persuade inexperienced consumers to entertain unsolicited financial offers.
However, analytical software does not provide direct access to the JSE. Investors must trade through an authorised stockbroker or a platform linked to one.
What consumers should do
Consumers should independently verify a company’s identity and regulatory status before agreeing to a meeting, signing a contract or making a payment. They should also be suspicious of anyone promising direct access to the stock exchange or presenting expensive software as a simple route to additional income.
The allegations have not been tested in court. Gatvol has invited the company concerned to respond.
Warning signs for consumers
- Unsolicited calls from companies with names similar to well-known brands
- Claims that software or a platform provides direct JSE access
- Promises of easy additional income for inexperienced investors
- Pressure to schedule a face-to-face meeting before verifying credentials
- Failure to provide an authorised financial-services provider number
- Expensive software presented as a simple route to trading profits
Consumers can verify a financial-services provider’s credentials through the Financial Sector Conduct Authority. The JSE confirms that investors must trade through an authorised member firm or stockbroker.
Background on the record
Allegations have not been tested in court. Parties named in the complaints are given a right of reply.