December is a time of celebration for many South Africans, and for stokvel members, it is often the month they reap the rewards of a year’s disciplined saving. Stokvel payouts are a lifeline for countless households, providing funds for school fees, groceries, festive season expenses, or even investing back into their small businesses. Sadly, this time of joy can quickly turn to despair when scams creep into the system, leaving some members high and dry.
The harsh reality is that stokvel scams are becoming all too common. This week, the Financial Sector Conduct Authority (FSCA) concluded its investigation into United African Stokvel (Pty) Ltd and its founders, Darren Langbein and Shirley Langbein. Their findings paint a grim picture of how easily consumers’ trust can be exploited when proper precautions aren’t taken.
According to the FSCA, United African Stokvel solicited and collected funds from members of the public, promising unrealistic returns on their savings. However, the investigation revealed that the funds were never invested. Instead, the Langbeins misappropriated a significant portion of the money for their personal benefit, while the remainder was used to pay select investors to create an illusion of returns.
Effectively, this was nothing more than a Ponzi scheme—a scheme where early participants are paid from the contributions of later members until the system inevitably collapses. And when it collapses, it is often the most vulnerable who are left with nothing.
Given the severity of the findings, the FSCA has shared its investigation report with the South African Police Services, the Prudential Authority, and the National Consumer Commission, signaling that further action may follow. The case serves as a stark reminder of why consumers need to be vigilant.
Stokvels are built on trust—a deep, often personal trust among members. But as we step into the new year, consumers need to balance trust with research and verification. The FSCA has urged the public to take the following steps before engaging with any financial entities:
Check for authorisation: Ensure the entity or individual is authorised by the FSCA to provide financial products or services. This includes checking if they are qualified to recommend where and how to invest.
Verify the category of advice: Some individuals or companies are only authorised to provide basic, low-risk advice. Be wary of anyone offering advice or products that fall outside their registered category, particularly if they promise massive, risk-free returns.
Cross-check the FSP Number: If someone claims to have an FSP (Financial Services Provider) number, confirm that it matches the entity listed on the FSCA database. Scammers often use fraudulent or stolen FSP numbers to appear legitimate.
These are not optional precautions—they are essential steps to protect yourself and your hard-earned money.
The FSCA’s investigation into United African Stokvel is not an isolated incident. It is a wake-up call to stokvel members and the broader public. Scams thrive on two things: desperation and lack of knowledge. In difficult economic times, when money is tight, promises of high returns can be incredibly tempting. But as the saying goes, if it sounds too good to be true, it probably is.
The stokvel system has been a cornerstone of South African financial culture for generations, and it continues to play a vital role in communities across the country. However, it must evolve with the times. Members need to adopt a mindset of financial literacy and awareness to protect themselves and the integrity of the system.
As you look ahead to the new year, take the time to understand who you’re saving with, and don’t shy away from asking hard questions. After all, the joy of stokvel payouts should never come with the heartbreak of betrayal.
The FSCA’s message is clear: trust is good, but verification is better. Your financial security depends on it.
PERSONAL FINANCE