BUSINESS NEWS - Dissect some of South Africa’s most controversial investment schemes and you will come across groups of pensioners who invested after they were lured with empty promises of great returns.
In light of the country’s poor savings culture and socio-economic challenges, only about one in ten people are in a position to maintain their standard of living in retirement.
Desperate to supplement a meagre savings pot, it is not difficult to see why many retirees become victims of too-good-to-be-true money-making schemes.
But financial abuse is not limited to having your money pilfered. It can also involve fraud or pressure to part with money or other assets, or having these misused by a loved one or acquaintance.
Melanie Winkler, assistant ombud for Financial Services Providers (Fais), says the elderly are definitely easier targets for financial abuse. They sometimes have a limited understanding of the financial industry or there may be a lack of access to information.
“This, together with the urgent situation caused by a lack of adequate financial planning, means that the elderly are more prone [to] fraudulent schemes and having their money stolen in an attempt to rectify the situation.”
One example is funeral societies. These schemes are often marketed in remote areas, and a lot of them aren’t registered in terms of the relevant laws. Pensioners end up paying premiums thinking they have covered themselves and their families, only to find themselves out of pocket when they claim or suddenly subjected to exclusions they weren’t aware of.
