‘It is essential that stokvel members remain alert to potential scams, especially fake calls or messages pretending to be from the bank or fellow group members.’
The festive season in South Africa means it’s time to cash out the money many households have been contributing to stokvels.
However, Criminals are actively trying to scam individuals out of their hard-earned money, particularly when many members make substantial withdrawals.
A surge in stokvel activity
Cebile Magongo, Strategic Business Manager at FNB Cash Investments, says there has been a remarkable 35% year-on-year growth in the number of stokvels opened since October 2023.
This growing trend reflects the number of people who are embracing the power of collective savings, recognising the financial and social benefits that come with pooling resources.
However, as the number of stokvels increases, so does the opportunity for criminals to exploit these groups.
ALSO READ: How people’s heritage shape their money habits
The risks of stokvel withdrawals
She adds that criminals have become more sophisticated in how they target stokvels and their members.
“It is essential that stokvel members remain alert to potential scams, especially fake calls or messages pretending to be from the bank or fellow group members.”
As criminals become more advanced in their tactics, stokvel groups and members must take extra precautions to protect their savings.
ALSO READ: Stokvels, the answer to many questions
Safety tips for stokvel members this festive season
To help stokvel members safeguard their funds and enjoy a stress-free festive season, Magongo offers several safety tips:
- Avoid cash withdrawals: Whenever possible, it is advisable to process payments through safe digital channels. Not only does this protect the money, but it also eliminates the need for handling cash, which can incur unnecessary fees.
- Ensure funds are transferred at meetings: Consider making digital payments during the last stokvel meeting of the year. This ensures that funds are transferred into members’ personal bank accounts before they leave the meeting, reducing the risk of carrying large sums of money.
- Keep stokvel details private: Do not share meeting dates, withdrawal times, or stokvel financial details on social media or with non-members. This information should remain exclusive to the group to prevent exposure to potential scammers.
- Avoid carrying large amounts of cash: If members must carry cash, it is best to do so in groups for added security. Additionally, avoiding travelling with large sums of money during peak times can significantly reduce the risk of theft.
- Stagger withdrawals: If digital channels are not being used, consider staggering the withdrawals over several days to minimise risk. Withdrawing all funds at once makes members an easier target for criminals.
- Withdraw funds during business hours: It is safer to make cash withdrawals during business hours, when security is more likely to be present.
- Be mindful of high-risk days: Avoid withdrawing large sums of money on high-risk days, such as month-end or the day before major holidays. These are often when criminals are most active, knowing that people are receiving their payments.
