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[LISTEN] Ponzi schemes: What you need to know

Ever been lured by the promise of 'easy money' by someone wanting you to invest in a Ponzi or pyramid scheme?

Don't fall for it, says one of the country's leading finance experts.

Maya Fischer-French, author of Maya on Money: Implement your Money Plan, says schemes like these are doomed to fail and we should be wary of falling for them and other investment scams.

They always offer high returns, so better than you would get in a normal investment - so that should be your first warning sign. The other warning sign is that are often 'word of mouth', or advertised on Gumtree.

Maya Fischer-French, Personal finance expert

A Ponzi scheme is an absolute fraud.

Maya Fischer-French, Personal finance expert

Every year thousands of people in South Africa are convinced to part with millions, often their life savings, with the promise of receiving quick - and substantial - returns on their money.

The National Consumer Commission has actually made it illegal to knowingly invest in a Ponzi scheme or a pyramid scheme, which is a bit of a problem, because if you HAVE invested in one and you come forward to complain, you could actually become liable for that investment, because it's against the law to invest in one of those.

Maya Fischer-French, Personal finance expert

[LISTEN] The signs to look out for with a Ponzi scheme:


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