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Stay away from too-good-to-be-true promises!

Mar 5, 2024

MMM Krypto and Tumi Links are two of the latest scams doing the rounds online.

Beware MMM Krypto and Tumi Links scamsEvery week I receive an update from the Financial Sector Conduct Authority (FSCA) warning about scams. Unfortunately, when people are caught out, there is nothing our regulators can do as these schemes are unregulated and usually run by fraudsters who disappear with the money.

Just this week I received a desperate plea from a woman who invested R6 000 in the African United Stokvel and needs the money to pay for her child’s school fees. These stories are heartbreaking, but all we can do is keep warning people not to fall for too-good-to-be-true promises.

The FSCA recently issued two warnings, against the MMM Krypto mutual aid fund, and Tumi Links which offers to trade in forex products on behalf of customers.

Almost all fraudulent schemes promote either crypto or forex products – so that is always the first warning sign.

MMM Krypto promises unrealistic returns

According to the FSCA, MMM Krypto uses videos on YouTube, TikTok and Facebook, as well as referrals to encourage members of the public to participate in the scheme.

MMM Krypto promises its participants returns of between 24% and 36% per month. These referrals or testimonials are no doubt false and part of a network of fake social media profiles.

The FSCA is concerned about the unrealistic monthly returns offered to members of the public in South Africa. Without commenting on the business of MMM Krypto, the FSCA points out that offering financial products or services in South Africa requires authorisation by the FSCA.

MMM Krypto is not licensed under any financial sector law to provide financial products or financial services in South Africa. The FSCA has referred MMM Krypto to the National Consumer Commission for further investigation.

In the case of Tumi Links, in offering to trade in forex products it is not licensed in terms of any financial sector law to provide financial products or financial services. The company did not respond to the FSCA’s request for comment.

Use the FSCA database to check for scams

Members of the public should always check:

  • that an entity or individual is authorised by the FSCA to provide financial products and services, including when giving recommendations about how to invest.
  • what category of advice the person is registered to provide, as there are instances where companies or people are registered to provide basic advice for a low-risk product and then offer advice on far more complex and risky products.
  • that the FSP number utilised by the entity or individual offering financial services matches the name of the FSP on the FSCA database.

In order to confirm the status and FSP number of a service provider, or of a person who claims to be an authorised service provider, you can call the FSCA Toll-free number (0800 110 443), or use the FSCA website to search for an authorised financial institution by license category or search for a financial institution that is an authorised FSP in terms of the FAIS Act.

This article first appeared in City Press.

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Maya Fisher-French author of Money Questions Answered

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