Saying No To A Free Lunch

As technology advances, so does the sophistication and prevalence of financial scams, with many unsuspecting investors becoming victims. Why are so many still falling prey and how do we protect ourselves?

- Kelly De Kock

We live in a world where we are assailed by scams. We can no longer trust emails that appear to originate from the institutions we trust the most – our employers and our banks being at the top of this list.

Our emails are being hacked, our identities stolen, our bank cards cloned. Most of us have had some experience of these scams, and they leave us feeling exposed and violated.

In addition to the scams that are directly targeted at us, we now find ourselves falling victim to deception taking place at the corporate level and affecting the funds we have available for retirement. Most of us are aware of the happenings at Steinhoff and Tongaat Hulett, for example, and the impact on our retirement funds is far from negligible. Yet we feel powerless to prevent these corporate scandals because we are simply too far removed to see these tsunamis coming.

In the midst of all this, we have bitcoin and other cryptocurrencies, which are being touted as the next big thing. Is this the means of exchange we should all be looking to in a rapidly changing world, or is it just a more sophisticated scam to be avoided at all costs?

These vulnerabilities are closely linked to the issue of financial literacy. If those of us reading this magazine are at a loss, what about the plight of the man on the street who has no insight into the world of financial markets? What can he do to protect himself against being taken advantage of by the fraudsters who seem to be waiting around every corner?

‘A sure thing’