Twanji Kalula, communications manager at Allan Gray

The Association for Savings & Investment South Africa (ASISA) recorded a 26% year-on-year uptick in the number of fraud cases affecting investors in 2024 and, according to a recent report, South Africans lost in excess of R2.7bn to financial crime last year.

According to Twanji Kalula, communications manager at Allan Gray, from Ponzi schemes to cryptocurrency cons, scams remain rife as would-be investors are lured by promises of enticing returns, often for little effort.

“When it comes to investing, the adage rings true: If it sounds too good to be true, it probably is. Any investment that promises extremely high returns, particularly in the short term, should be approached with trepidation,” says Kalula.

As the world marks International Fraud Awareness Week between 16 and 22 November 2025, below Kalula unpacks how investors can take proactive steps to protect their investments.

Understand how your investment makes returns

When considering any investment, seek to understand how your capital will be used to generate returns.

“Investors typically earn returns by investing in an asset that either increases in value over time or generates income. Many assets do both. If an investment provider cannot explain how returns are generated, or the investment requires the investor to recruit other people to generate returns, something is amiss,” he says.

Watch out for a false sense of urgency

Kalula says that a common form of cybercrimes is phishing, in which criminals impersonate banks and financial institutions by phone, email or SMS to access your sensitive personal data, such as login details.

“Cybercriminals try to create a sense of alarm to spur investors into taking immediate action.”

Kalula believes investors should view any urgent request to change a password, verify details, avoid an account being suspended or prevent a fraud attempt with scepticism.

Another tell-tale sign of phishing is a fake email sender address. “Make sure the sender’s address is accurate and contains the correct domain name,” Kalula says.

According to Kalula, although phishing emails were often riddled with spelling and grammatical errors in the past, criminals are increasingly using AI to improve the quality of their communications and to target victims with greater accuracy.

Know who you’re talking to

Another trick that scammers use to defraud investors is impersonating employees of reputable financial institutions, particularly via social media platforms. “Exercise caution when someone claiming to be a representative of an established company tries to solicit new investments via social media platforms, as they may be using a fake or compromised account to do so,” comments Kalula.

Remain engaged

“By being engaged and vigilant, you can ensure that your investments and your financial future remain secure,” he adds, concluding by sharing some pointers.

Here are four top tips for a safer investment journey:

• Invest with reputational financial institutions and transact only through verified channels: In South Africa, the conduct of financial institutions is regulated by the Financial Sector Conduct Authority (FSCA). Legitimate financial institutions are issued with a financial services provider (FSP) number, which can be verified with the FSCA. In addition, most reputable firms are unlikely to use social media or any instant messaging platform to initiate new investments, manage existing investment accounts, or engage with clients about their investments.

• Get the right advice: Many criminals win their victims’ confidence by pretending to be knowledgeable financial professionals. When considering the services of a financial professional, such as an independent financial adviser, you should confirm that they are in good standing with an appropriate professional body, such as the Financial Planning Institute of Southern Africa (FPI).

• Protect your investment accounts: Avoid opening attachments or clicking on links in emails and SMSs without verifying their authenticity, as they may be harmful. Prioritise password hygiene regularly by protecting every investment account with a unique, complex password.

• Be alert on the phone: Unsolicited phone calls from anyone claiming to be affiliated with a financial institution should be treated with care. When in doubt, hang up and contact the entity using its official, verified contact details.

ENDS