The Financial Sector Conduct Authority warns investors of an unauthorised platform allegedly using another company’s credentials to promote investments.
The Financial Sector Conduct Authority (FSCA) has warned the public against conducting financial services business with Discovery Online Trade Plus, saying the entity is not authorised to provide online trading services.
According to the FSCA, it is allegedly using another company’s licence details to solicit investments from members of the public.
In a public warning, the regulator says Discovery Online Trade Plus, also referred to as Discovery Plus, had been presenting itself as an authorised financial services provider (FSP).
The entity allegedly used the FSP number of Gikuyu Brokers Investments, referred to in the statement as Giyuku Brokers, to market investment opportunities and solicit funds from potential investors.
The FSCA says Discovery Plus had used FSP number 51424 in its communications with prospective investors.
“It has come to the FSCA’s attention that Discovery Plus is purporting to be an authorised financial services provider. Discovery Plus is using the FSP number of Gikuyu Brokers Investments (Giyuku Brokers) to promote and solicit investments from the public.
“Giyuku Brokers confirmed it is not associated with Discovery Plus. Without commenting on the business of Discovery Plus, the FSCA confirms Discovery Plus is not authorised by it to provide financial and online trading services to members of the public. The FSCA was unable to contact Discovery Plus; there were no contact details available for it.”
The warning highlights the risks associated with investment operations that claim regulatory approval without the necessary authorisation, particularly when they use the credentials of legitimate financial services providers.
The FSCA advises consumers not to accept financial advice, assistance or investment offers from individuals or businesses that the regulator does not authorise.
It also cautions prospective investors to check whether a provider’s authorisation status is clearly displayed in its documentation and to investigate further if this information is missing before making any payments.
“Investment fraud remains a growing concern, with South Africans losing millions of rands annually to fraudsters. Illegal operations can be disguised to resemble legitimate investment businesses.
“Among the warning signs consumers should look out for are promises of unrealistic or exaggerated returns, investment opportunities promoted through social media and demands for upfront payments for services,” adds FSCA.
Other red flags include requests for additional money before investments can be returned, payments for training, pressure to make immediate investment decisions and vague information about the products being offered, it says.
Consumers can verify whether a financial services provider is authorised by the FSCA, including checking the validity of its FSP number, through several channels.
The regulator provides a toll-free verification line on 0800 110 443. Members of the public can also search its online database of authorised financial institutions by licence and product category.
Alternatively, consumers can check whether a financial institution is registered as an authorised FSP under the Financial Advisory and Intermediary Services Act of 2002.
The FSCA advises investors to conduct these checks before committing funds to any investment opportunity.
