Too Good To Be True? (Part 1)

“Mr & Mrs Molefe* receive an email congratulating them on winning a prize from the International Lottery Board in London.

They have won the lottery valued at €11,000,000! All they need to do to collect it is cover the costs of the International Bank Transfer Fees and Taxes and collect their winnings in person. Mr & Mrs Molefe buy their plane tickets and send a TT for €2,000.00 to pay the invoice for fees and taxes. They then have a huge celebration with their friends and board the plane to London the following day.”

You might look at this and see that it is an obvious scam - of course Mr & Mrs Molefe never bought a lottery ticket - so how could they have won it? Unfortunately, more and more of us are falling for tricks that lose money – bad people play on your greed for easy money. When Mr & Mrs Molefe got to the UK, the man from the “Lottery Board” was not at the airport to meet them as agreed. In fact, they never managed to contact the “Lottery Board” ever again.

If it sounds too good to be true, it is usually not true! “Yesterday, Thabo* got a phone call out of the blue. The guy on the other end of the phone says he is calling from Japan – he is a professional stockbroker. He says that Apple shares are at their cheapest for 6 months and he has insider information that they are about to go up hugely. He says his firm has already bought Thabo some shares yesterday at a discount and if he takes them now he will make an instant profit of P2,000 - with lots more to come!”  In this example, there are some simple questions Thabo should ask himself to determine if this is real:

How does he know who is at the other end of the phone?

This is the first time he has heard from them - why would they have already bought him some shares?

Why don’t they take the profit on the shares themselves – why gift it to him?

In this example, you can clearly see none of these answers can be answered simply. It is highly likely to be a scam, therefore Thabo certainly should not send them any money.

Advance Fee Frauds

 “Kabelo* attends a seminar at the Gabs Sun in which the presenter says he can teach you how to make easy money from the stock market. He says he has made many people millionaires! The small cost is a training package for P4,999 and trading software for P399 per month. Kabelo is initially really enthusiastic about making easy money, but then when he takes the business

card he notices that the presenter only gives a cellphone number without an office address.” Kabelo is right to be sceptical - he thinks – “surely a successful investor would be making enough money to have his own website and a land-line phone at his office?” The fact is, there is no easy way to make money. There is a chance that you might be lucky, for example with a win at the casino, but we all know that most money gambled is lost – it goes back to the casino to pay for the facilities, the staff, the profits.

 “So how can we guard ourselves against being conned? Put simply, we must educate ourselves.”

But is it that simple?

When deciding where to invest, listen to what the investment is about and what the returns are and, decide if you are convinced by the person presenting it. But what is the safest way of making this decision? What tools can we use to guide us?

Be sceptical:

Ask lots of questions

The more questions you ask, the better picture you will get, the harder it will be to fool you. To protect yourselves against fake investments ask:

1. What does the company do, how does it make money?

2. Where is the company based, can you visit their offices?

3. Where is the investment regulated and licensed?

4. Where does the money come from to pay the investors profits? 5. Are the returns realistic?

6. What are the risks?

7. Who is trying to sell this investment to you? Why? What is in it for them?

8. Who will buy the investment from me if I need my money back?

l Check with a Qualified Financial Adviser - one who is registered with the Association of Botswana Financial Advisers (ABFA). (You can find out more about ABFA and see their members at

l Check with NBFIRA – the Non Banking Financial Institution Regulatory Authority (You can find out more about NBFIRA at

l Never send Cash – no legitimate investment works through cash transfers. 

l  Don’t take financial advice from someone over the internet or over the phone. Always meet the representative, and ask for a copy of their Omang or Work Permit.

Don’t be afraid to ask questions. If somebody is persuading you to invest your money, you have the right to ask whatever you need to know. Remember, if it sounds too good to be true, it is usually not true! Walk away if you have doubts.


Part 2 - internet scams and ponzi schemes - comes next week

Author: Tshepiso Kgakatsi – Training Manager with S.C.I. Training (Pty) Ltd. © S.C.I. Training is a BQA accredited training institution specialising in Financial Education. We also offer Ethical Collection services for companies with debtors and Debt Counselling services for those in financial distress. For help and information contact 318011 or 72309718 or [email protected]

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