South Africans are increasingly falling victim to investment scams promoted through social media and online platforms, prompting the Financial Sector Conduct Authority (FSCA) to intensify enforcement against digitally-enabled financial misconduct.
The warning comes following the release of the FSCA's latest Regulatory Actions Report for the 2025/26 financial year, which outlines the regulator's enforcement activities, investigations, penalties and emerging risks across SA’s financial sector.
The report highlights that online fraud has become one of the regulator's primary focus areas, as scammers increasingly exploit digital technologies, social media platforms and trusted brands to target consumers.
According to the report, fraudsters stop at nothing to take advantage of digital platforms to swindle unsuspecting victims out of their money.
The FSCA says these scams combine the accessibility of digital platforms with increasingly sophisticated tactics that make fraudulent investment schemes appear legitimate.
"Online harm in South Africa is increasingly becoming more sophisticated and more digitally-driven. It includes financial scams, impersonation fraud, fake investment schemes, fraudulent use of licence numbers, and unauthorised financial services promoted through websites, social media and messaging platforms.
“These practices are particularly damaging because they combine digital accessibility with exploitation of trusted brands, public figures, registered financial institutions or the FSCA's own name to create false legitimacy."
The report details several enforcement interventions by the FSCA, including imposed penalties totalling R2.8 billion, stemming from a wide range of financial crimes on 76 persons and entities – a significant increase from the R119.8 million imposed as penalties during the previous reporting period.
This increase was largely driven by sanctions involving material Financial Advisory and Intermediary Services Act contraventions, market abuse and anti-money-laundering compliance failures.
The regulator adds that digital fraud has become a significant obstacle to the country's broader digital economy ambitions.
"Of particular concern is that 68% of South Africans reported being targeted by fraud, making fraud the leading barrier to digital adoption. South Africa also ranks eighth globally in terms of suspected digital fraud rates."
The report notes that fraudsters increasingly impersonate legitimate financial institutions, while approximately 20% of the public warnings issued during the reporting period related to impersonation scams. Criminals have also impersonated the FSCA itself, as well as its commissioner and staff members, to deceive consumers.
Online forex scams
During the 2025/26 financial year, the FSCA issued 140 public warnings against suspected unlawful financial activities, up from 107 the previous year.
The report notes that most warnings relate to unregistered financial service providers promoting investment and trading opportunities online, often promising unrealistic returns or guaranteed profits through social media campaigns and digital advertising.
The report references unauthorised investment firm Bhaca Green’s enforcement case as an example of how online investment schemes continue to exploit retail investors through digital marketing and promises of guaranteed returns.
According to the regulator, the scheme operated without the required authorisation and misappropriated client funds.
"The case highlights how 'guaranteed' return schemes, particularly in the forex trading online environment, continue to pose a significant threat to retail investors. The involvement of an authorised industry representative acting outside approved channels further underscores the risk of misconduct within distribution channels, necessitating heightened supervision and governance by licensed institutions."
The regulator says it imposed a 20-year debarment on founder Songeziwe Mbalo, and administrative penalties of R9 million on Bhaca Green and Mbalo jointly, together with an additional penalty against another individual involved in the scheme.
The report says so-called guaranteed investment returns remain one of the clearest red flags consumers should look for when evaluating online investment offers.
The FSCA says enforcement alone will not eliminate online financial scams and it continues to invest heavily in consumer education.
The regulator says an informed consumer remains the first line of defence against digital fraud, with education efforts focused on helping South Africans verify whether financial service providers are licensed, recognise common scam tactics and identify warning signs associated with fraudulent investment schemes.
“Low levels of financial literacy, combined with economic pressures and increasingly sophisticated scams, continue to leave many South Africans vulnerable to online fraud,” the FSCA warns.
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