Bank to pay back consumer

Employee committed R400,000 fraud

THE COST of living continues to rise and we barely make ends meet, so investing is not a priority for many people .

But consumers who are smart and save and then invest their hard-earned money expect to benefit from their investments.

Grace Mushwana regrets having invested her money with Sharemax Investments.

This real estate property investment company engages in renting, operating and managing commercial properties for shops and offices.

It now operates as a subsidiary of Realcor Holdings.

Mushwana said she was told that the company was legitimate and when an agent, Dion Wentel, approached her in 2006 she invested R200,000 with Sharemax Investments.

She said Wentel advised her to invest her money in their property division.

The investment was for a period of five years and was to mature in March 2011, she said.

"But this did not happen. I did not even receive a call to inform me of developments," Mushwana said.

Then she was advised to reinvest her money for a further three years, but she refused to do so, Mushwana said.

She said she later found out that there was a court order in which Sharemax Investments was ordered to pay out investors.

"Instead they are sending me up and down," she said.

Sowetan has tried to get comment from the company since last month, without luck.

It is essential for consumers to invest money with reputable and long-standing financial institutions because in the event of there being any problems, consumers will not lose their money.

For example, the Financial Advisory Intermediate Services (Fais) ombudsman, Noluntu Bam, recently ordered Standard Bank to refund a consumer who had been defrauded by an employee of the bank.

Nelson Tshitema, of Mapetla, Soweto, was defrauded of R400,000 under the pretext that his nest egg was being moved to a better performing investment.

Tshitema said the problem started after he received a phone call from a financial adviser from the bank five years ago.

The bank employee, Lazarus Mocwiri, and a Liberty Life financial consultant, Sipho Dlamini, invited Tshitema to Standard Bank's Small Street branch in Johannesburg, and advised him to move his money to another investment.

He said he valued their expertise because he had previously dealt with them, so he took their advice.

"I agreed because I trusted the two gentlemen from the bank. I had a debit order for R25,000 to Unit Trust-Stanbil.

They suggested that I cancel it and invest the money with Liberty Life for five years.

They also advised me to invest R600,000 with Discovery Life for five years and R400,000 in gold shares for a year," Tshitema said.

Given that the Standard Bank employee had asked him to go to the branch to discuss the matter,Tshitema believed it was an investment product of Standard Bank.

Also, the fact that Mocwiri was employed by Standard Bank gave Tshitema the impression that he was acting on behalf of the bank.

Unbeknown to Tshitema, he became a victim of a fraudulent scheme devised by an employee of the bank.

Tshitema became concerned when he realised he was not getting any information from the bank about his Growth Coin investment.

It later transpired that Tshitema's money was invested in a company belonging to Mocwiri and Dlamini and that all his money had been used.

Bam has now brought a smile to the investor's face.

She has ordered Standard Bank to refund Tshitema the R400,000, with interest, that was fraudulently transferred into Mocwiri's account.

In determining Tshitema's case, Bam said Standard Bank had failed to put in place adequate systems to prevent the fraud by its employees as required by Fais' general code of conduct.

This code states that the provider must at all times have and effectively employ the resources, procedures and appropriate technological systems that can reasonably be expected to eliminate as far as possible, the risk that clients, products suppliers and other providers or representative, will suffer financial loss through theft, fraud or other dishonest acts, poor administration, negligence, professional misconduct or culpable omission.