Protect your money: SARB warns against illegal deposit schemes in South Africa
The South African Reserve Bank has warned of a sharp increase in illegal deposit-taking scams targeting unsuspecting members of the public
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The South African Reserve Bank (SARB) has warned of a sharp increase in illegal deposit-taking scams targeting unsuspecting members of the public with promises of unusually high returns.
According to the Reserve Bank, scammers typically pose as legitimate financial service providers, offering investment opportunities or savings products.
These schemes often promise quick or guaranteed returns, but once funds are deposited, the operators disappear.
"South Africa is seeing a rise in illegal deposit-taking scams. Scammers promise big returns, then vanish with your money – leaving victims with little recourse," the country's financial regulator said.
In a post on X (formerly Twitter) on Tuesday, the regulator said that only deposits held at licensed banks are protected under South Africa’s official deposit insurance scheme, the Corporation for Deposit Insurance (CODI).
"Remember: CODI, South Africa’s deposit insurer, only protects deposits in licensed banks. Be cautious and ask questions before you invest or deposit any money".
According to reports, the Reserve Bank’s Prudential Authority annual report reveals a significant rise in illegal financial institutions, with the number of unlicensed banks and insurance companies under investigation jumping from 79 cases in the 2021/2022 financial year to 287 in 2023/2024.
The Reserve Bank has also called on members of the public to report any suspicious deposit-taking activity.
"Verify registered financial institutions through the SA Reserve Bank, Prudential Authority and Financial Sector Conduct Authority. Report suspicious activity to PA-Inspections@resbank.co.za"
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