A new scam is doing the rounds on WhatsApp in South Africa, promising R1,000 in returns for a R200 ‘investment’.
The scam operates as a purported ‘savings club’ or stokvel, where users join the club with R200 and are encouraged to invite as many other people to join as possible.
By recruiting more members, your ‘name’ climbs up the list to get paid out R1,200. Users can then re-join with R200 and enjoy ‘profits’ of R1,000.
The scam operates like a typical pyramid scheme, and the National Stokvel Association of South Africa (Nasasa) has sent out official notice warning people to steer clear of it.
The association said that fraudsters were using social media as a channel to lure in victims under the guise of being saving schemes, but they were simply scams.
The South African Police Service (SAPS) also put out a warning to members of stokvels, along with tips on how to avoid falling victims to scams.
#sapsHINT If you are a member of a cash savings club (#stokvel), advise members of your club to be extra cautious & not to fall victim to scams. Safety tips #CarryingCashSafely @Sabric @nationalstokvel MEhttps://t.co/0JQuBwOZLChttps://t.co/WQQ2eGgHcj pic.twitter.com/XqTb4WVawr
— SA Police Service (@SAPoliceService) October 9, 2019
The use of ‘stokvels’ as a cover for the scam was undermining the legitimacy of traditional stokvels, Nasasa said, which are systems based on trust and subject to rules and member meetings.
As a member of a savings club, you commit to making regular contributions and are accountable to the other members of the club. This can help create a regular savings habit and get rid of the excuses that stand between you and your savings goals, the group said.
Traditionally, most savings clubs keep their members’ contributions in cash or deposit them into a bank account.