South Africans warned to stay away from ‘Discovery Plus’
South Africans have been warned to stay away from several financial services operations, including a trading platform named Discovery Plus.
This comes after the Financial Sector Conduct Authority (FSCA) uncovered attempts to impersonate authorised financial services providers.
The regulator has issued warnings against Discovery Online Trade Plus (Discovery Plus), Halifax Loans SA (Pty) Ltd (Halifax Loans) and individuals promoting forex trading while impersonating Aeon Investment Management.
In all three cases, the FSCA found that the entities or individuals were using the identities or registration details of legitimate financial services businesses to create the impression that they were authorised to offer financial products or services.
In its warning about Discovery Plus, the FSCA said the platform was purporting to be an authorised financial services provider.
It was also using the Financial Services Provider (FSP) number of Gikuyu Brokers Investments (Pty) Ltd to promote and solicit investments from the public.
Discovery Plus used FSP number 51424 in its communications with potential investors. However, Gikuyu Brokers confirmed that it had no association with Discovery Plus.
The FSCA stressed that Discovery Plus was not authorised to provide financial services to members of the public.
The regulator also said it had been unable to contact the operation, as no contact details were available.
A similar warning was issued against Halifax Loans, which allegedly presented itself as being affiliated with Halifax Insurance Brokers CC, an authorised financial services provider with FSP number 9998.
According to the FSCA, Halifax Loans used the insurance broker’s details when offering loans to members of the public. Halifax Insurance Brokers confirmed that it was not associated with Halifax Loans.
The regulator subsequently confirmed that Halifax Loans was not authorised to provide financial services. It also said it had been unable to reach the company because no contact details were available.
A growing risk for South Africans
The third warning concerns individuals using the name and business details of Aeon Investment Management (Pty) Ltd to promote forex trading services through WhatsApp.
The individuals allegedly used the company’s name, physical address and registration number to make their trading activities appear legitimate.
Aeon Investment Management, which is an authorised financial services provider with FSP number 27126, confirmed that it had no association with the individuals operating the WhatsApp group.
The FSCA said the individuals impersonating the investment management company had failed to respond to its enquiries.
FSCA said the warnings highlight a growing risk for South Africans looking for investment opportunities online, particularly where fraudsters use the identities of legitimate financial institutions to gain the trust of potential clients.
The FSCA urged the public not to accept financial advice, assistance or investment offers from individuals or companies that are not authorised by the regulator.
“Authorised financial services providers must clearly display their authorisation status in their documentation,” the FSCA said.
“If this is not present, it is advised to further investigate before making any payments.”
The regulator also warned against unsolicited investment and trading offers, particularly those advertised or communicated through social media platforms.
It said illegal financial operations could be disguised as legitimate businesses, with members of the public losing millions of rands to fraudsters every year.
Among the warning signs investors should look out for are promises of unrealistic or exaggerated returns, investment offers made through social media, and demands for upfront payments before services are provided.
Other red flags include requests for additional money before an investment can be returned, demands for payment for training, and pressure to make immediate decisions or payments.
The FSCA also warned against investment offers that provide vague or insufficient information about the financial products being promoted.
South Africans are therefore encouraged to verify the credentials of financial services providers independently before handing over money or accepting investment advice.
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