KwaZulu-Natal / Investment fraud
Pensioners targeted in R30 000 share-trading software scheme
South Africans approaching retirement are being targeted by salespeople promising extraordinary returns from expensive software that does not allow users to trade on the JSE.
South Africans approaching retirement are being targeted by salespeople promising extraordinary returns from expensive “share-trading” software that does not allow users to trade on the JSE.
The sales pitch begins with an unsolicited telephone call offering prospective customers R5 000 to start trading. A salesperson then visits the customer’s home and claims the software can produce returns of around 40%.
Customers are encouraged to pay approximately R30 000 by credit card, often through a 60-month budget facility. Although this is presented as a manageable monthly payment, the supplier receives the full purchase price immediately while the customer owes the bank the full amount plus interest.
Medically boarded and still waiting for R5 000
Ria Venter of Scottburgh said she and her husband, who are both medically boarded, bought the software hoping to supplement their income.
They were promised R5 000 in trading capital, but Venter said the money had not arrived six months later. She subsequently discovered that the software was a simulation and could not be used to execute trades.
Salespeople cut the price rather than lose the sale
Another customer, Willie Raul, told the salesperson he was living on credit while waiting for his pension and could not afford R30 000. A recording made after the meeting allegedly captures the salespeople discussing how they reduced the sale to R12 000 rather than losing it entirely.
Obstacles to cancellation
Customers who attempted to cancel said they encountered further obstacles. Some alleged that salespeople opened the software packaging during demonstrations, after which the supplier claimed it could not be returned. Others said the company refused to accept courier deliveries until the cancellation period had expired.
“Investors cannot bypass an authorised member firm or stockbroker to trade on the JSE.”
JSE confirmation in the documentary
What consumers should do
Consumers should be suspicious of guaranteed returns, unsolicited investment offers and pressure to make immediate credit-card payments. Those who believe they were misled can complain to the National Consumer Commission and report suspected fraud to the police.
The documentary did not identify the owners of the businesses concerned, and the allegations have not been tested in court.
Warning signs for consumers
- Guaranteed or extraordinary returns
- Unsolicited telephone investment offers
- Pressure to pay immediately by credit card
- Claims that software can execute JSE trades when it is only a simulation
- Promised trading capital that never arrives
- Packaging opened during demonstrations to prevent returns
- Refusal to accept courier deliveries during the cooling-off period
- 60-month budget facility that leaves the customer owing the bank plus interest
Consumers who believe they were misled can complain to the National Consumer Commission and report suspected fraud to the police. 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.