Online investment scams: Red flags to check before handing over your money

Ask AI 2minCitizens are urged to verify the credentials of financial service providers and be wary of promises of unrealistic returns.

As South Africans continue to feel the financial pinch, many may find themselves considering online investment opportunities. 

However, citizens are urged to verify the credentials of financial service providers and be wary of promises of unrealistic returns, as international investigations continue to expose fraudulent investment schemes targeting savers.

In its latest update on Operation Serengeti III, published on October 22, INTERPOL said authorities in 21 countries arrested 1,462 suspects, disrupted 10,909 malicious networks and recovered more than US$105 million in illicit funds.

The operation ran from June 29 to August 31, 2026 and targeted several forms of cybercrime, including online scams, cyber-enabled fraud, ransomware and digital extortion.

Authorities identified 65,929 victims targeted by cybercriminal networks, while financial investigations linked the criminal activity to losses exceeding US$385 million. These figures cover the wider operation and are not limited to investment scams.

One of the cases uncovered in Uganda involved two transnational fraud rings linked to online investment and pension fraud schemes targeting victims across Asia.

INTERPOL said 365 foreign nationals were arrested in connection with the schemes. Investigators uncovered a rotating call-centre model that used scripted communications, fake trading platforms and fraudulent websites to persuade pensioners to invest in non-existent opportunities.

The case highlights how professional-looking online platforms and direct communication from supposed investment representatives can be used to create the appearance of a legitimate business.

The Financial Sector Conduct Authority (FSCA) has warned the public about people and entities that may offer financial services without the necessary authorisation.

In a June 2025 warning, the regulator identified several red flags for consumers. This is what you should watch for.

Be cautious of offers promising unusually high or guaranteed profits.

Treat demands to invest immediately as a warning sign.

Investigate offers that provide vague information about the product or the company behind it.

Do not rely solely on a website, logo or claimed licence number.

Be wary if you are asked to pay more money to release an investment or recover funds already deposited.

The FSCA has also warned that fraudulent operations can be disguised as legitimate businesses, making independent verification important before any money is transferred.

The regulator advises consumers to verify that a person or company is authorised to provide the relevant financial services.

Investors can use the FSCA’s authorised financial services provider search to check a provider’s name or Financial Services Provider (FSP) number.

The details should match the company or individual offering the investment. Consumers should also check whether the provider is authorised to offer the particular service being promoted.

An online presence, professional-looking website, testimonials or displayed account balance should not be treated as proof that an investment is genuine.

The FSCA has specifically cautioned consumers against accepting financial advice or investment offers from people who cannot demonstrate the required authorisation.

Do not send further money or share banking credentials, passwords or one-time PINs with a suspected scammer. Keep records of communications, payment confirmations and the platform’s details, and contact your bank promptly if you have transferred money.

Suspected investment fraud can also be reported to the relevant authorities, including the FSCA and the South African Police Service.