FSCA issues Telegram fraud alert for South Africa

The Financial Services Conduct Authority (FSCA) has warned South Africans to be on alert for a scam perpetrated on chat platform Telegram, where criminals are impersonating wealth management companies.

The authority was alerted to fraudulent activity where scammers were impersonating Bovest Wealth Management (Pty) Ltd—a registered financial services provider—and its consulting specialist, Godfried Kotze.

“Certain individuals are using Telegram groups to solicit funds from members of the public by claiming to be associated with Bovest Wealth.

“The individuals behind the Telegram groups use the name of ‘Bovest Wealth’ and ‘Mr Kotze’ to solicit investment into amongst others, forex and Bitcoin. Members of the public are promised unrealistic returns on their investment,” the FSCA said.

Bovest Wealth informed the FSCA that it does not use Telegram to market its services and has denied any association or relationship with the individuals using its name and that of Kotze.

“The public is urged to act with care when investing their funds. There are many fraudsters operating scams. South Africans lose millions of rands every year to fraudsters. Illegal operations are sometimes well-disguised as legitimate operations,” the group said.

The FSCA warned the public to be on the lookout for tell-tale danger signs when dealing with persons offering attractive investment opportunities.

These red flags include:

• Unrealistic returns that are offered;
• Claims that the entity or person does not require an FSCA licence;
• Vague information about the investment product;
• Claims that the investor must act urgently;
• Requirements to pay more money to have their investment returned to them.

Scam season

Several financial service groups, including the South African Revenue Service (SARS), have warned their clients and users to be on high alert over the next few months, with a spike in scammer and criminal activity expected.

This coincides with the country’s tax season, where more sophisticated scam techniques are used to take advantage of people doing their taxes, or who have received a windfall from the taxman and have extra cash on hand.

SARS scams are at the top of the list, with scammers looking to take advantage of confusion around tax filing, or trying to tap into the fear taxpayers have around correspondence with SARS.

Tax experts have flagged a rising number of scams spoofing SARS communication, including threatening taxpayers with withholding tax returns until payments are made or asking for banking details to pay returns owed.

South Africa’s banks have also warned of scams and fraud involving promises of discounts, fake jobs, fake loans and even fake claims of inheritance.

The big banks also warned that advanced scams and fraud involving deep fakes, AI, and voice modulation are now becoming more common.

Cybercriminals only need a short clip of one’s voice to create realistic-sounding voice messages claiming to be you. This can be used as audio confirmation for criminals to add contracts and debit orders to accounts.

If scammers can obtain recordings of your facial data, they can also create deep fake videos that promote “great investment opportunities” through AI.

“They’ll add screenshots of fake bank pay-outs and testimonials to make them look more credible. They can post these videos on your hacked accounts or DM them to your friends, family and social media followers, urging them to invest and receive high returns,” said Nedbank.

“If the people targeted from your contact list accept the deepfake as real, they’ll have no reason to doubt that you’re sharing something that worked for you.”

Read: Nedbank warns of new type of fraud doing the rounds in South Africa