The regulator says unauthorised companies are promising unrealistic payouts on Telegram.
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The Financial Sector Conduct Authority (FSCA) is warning South Africans to exercise extra caution when conducting financial services business with Sappi Online Investment and individuals purporting to be associated with Mattercap Investments.
The warning comes after the market conduct regulator received information that there are individuals pretending to be from the two companies on the instant messaging app and social media platform Telegram, soliciting money from South Africans.
The FSCA regulates the conduct of financial institutions to ensure customers are treated fairly. Its mandate includes protecting financial customers, promoting transparency, ensuring financial service providers comply with relevant laws and regulations, and supporting the integrity and efficiency of financial markets.
Sappi Online Investment on Telegram
The regulator said individuals on Telegram are claiming to be from Sappi Online and promising unrealistic payouts. However, the FSCA has noted that the FSP number being used belongs to Sanlam.
“It has come to the FSCA’s attention that Sappi Online is purporting to be an authorised financial service provider (FSP) on Telegram by using FSP number 45741. The FSP number being used by Sappi Online belongs to Sanlam Life Insurance Ltd (Sanlam).
“Sappi Online is using Telegram to solicit funds from members of the public by promising unrealistic payouts.”
FSCA can’t get hold of Sappi Online
The FSCA has highlighted that Sappi Online is not authorised to provide financial services, while Sanlam told the regulator it has no connection with Sappi Online – despite the Telegram business using the former’s FSP number.
“While the FSCA does not comment on the specific business model or services offered by Sappi Online, it is important to note that Sappi Online is not authorised by the FSCA to provide financial services to members of the public.
“Sanlam confirmed that it has no association with Sappi Online and it does not use Telegram to conduct business. The FSCA was unable to reach Sappi Online on the contact details available to it.”
Group administrators fail to reply
Another company that has come to the FSCA’s attention is Mattercap Investments, an authorised Financial Services Provider with FSP number 53672.
Mattercap is registered with the FSCA; however, there are individuals impersonating the financial services provider on Telegram to solicit investments from people.
“Mattercap confirmed that it is not associated with the administrators of the Telegram group,” the regulator said. “The administrators of the Telegram group failed to respond to FSCA enquiries.”
Advice when doing business on social media
“The public is strongly urged to exercise caution when considering unsolicited investment or trading offers, especially those communicated through social media. The public is urged to act with care when investing their funds,” said the FSCA.
“There are many fraudsters operating scams, and the number is growing. South Africans lose millions of rands every year to fraudsters. Illegal operations are sometimes well-disguised as legitimate operations.”
The regulator advises South Africans to be on the lookout for certain tell-tale danger signs when approached by persons offering attractive investment opportunities.
Red flags
The regulator listed the following as red flags when communicating with investment or trading companies on social media:
*Unrealistic or exaggerated returns
• Offers made on social media platforms
• Requirements to pay for services upfront
• Requirements to pay more money to have your investments returned
• Requirements to pay for training
• Claims that you must act and pay urgently i.e. creating a sense of urgency
• Vague information about the investment product
