Please note that since this book was last published in 1997 some of the laws that have been referenced may have changed. We
are doing our best to update the articles, however, it is advisable that you to consult an attorney before relying on any information contained herein.
There are many people trying to get you to part with your
money, some honestly and some dishonestly. Be very careful
when-ever you are made an offer which seems too good to believe -
there may well be a hidden catch.
Many shops advertise low prices on specific goods which may be
real bargains. This is often a selling strategy because, even if
one item is sold at a loss, the owners know that many customers
are likely to spend more money once they are inside the shop.
Loss leaders lull customers into thinking that the other goods in
the shop are also bargains.
If an item is marked 'R19.99', this creates the impression
that it costs about R19. Actually, it costs about R20 - only one
cent less than the higher rand amount. Similarly, something
marked 'R49.95' is only five cents short of R50. Mentally adjust
this kind of price to the higher figure so that you are clear
about how much you are really spending
Shops may advertise 'closing-down sales' when in fact they
have no intention of closing and are just trying to attract
customers. Sometimes an item is advertised at a low price but
when you inquire about it, the salesperson tells you that that
particular item is 'sold out'. The salesperson, having got your
attention, then tries to take advantage of you by trying to talk
you into buying something more expensive.
Some 'hard-sell' marketing campaigns take the form of sending
you a letter or telephoning you to say you have won 'a prize',
all you have to do to collect it is to attend a sales seminar...
Lotteries and gambling machines
Although any person who holds a ticket in a lottery stands
just as much chance as any one else to win the prize (providing
all the tickets are sold), the chance of any one person winning a
national lottery is probably millions to one against. The chances
of winning a lot of money on a gambling machine are also very
small. The only reason lottery and gambling companies continue to
operate is because they are taking in relatively large amounts of
money and paying out relatively small amounts. This applies as
much to schemes that are run 'for charity' as it does to others
which are unashamedly run for profit.
Fake goods and inaccurate labelling
If you buy a leather jacket at an unbelievably low price, or a
piece of jewellery, or a watch, or a brand-name piece of
clothing, make sure it really is what the label or salesperson
says it is. The 'leather' may be vinyl, that 'diamond' a piece of
polished glass, and that brand-name watch or piece of clothing a
cheap fake. Even if items are real, they may be of very poor
quality, or they may be stolen, in which case any guarantee is
invalid. Find out what you can do if you are not satisfied before
you part with your money. If you have any doubts about the goods
or the vendor, walk away. Buying 'cheap' might actually be
throwing your money away on junk.
Defective goods and defective backup
Some goods that are sold at attractive prices are actually
rejects, defective in some way, or outdated. Good rules of thumb
are to find out as much as you can from more than one source
about what it is you are buying, and only to buy from established
dealers who have a reputation of offering good backup service.
Even honest dealers who sell defective goods in good faith may be
too small to be able to offer a speedy and effective backup
service. Beware also of dealing with people who may not be in
business for long enough to be able to honour the guarantee they
have promised you. Try to make sure that the goods you buy are
guaranteed by the manufacturer and that you keep your proof of
purchase so that you can make a claim if necessary.
Investments offering unrealistically high returns
Be suspicious of any investment offering a rate of return
which is significantly higher than that which is available
elsewhere in the market. You may be buying into a pyramid scheme,
one which is able to pay investors the advertised rate of return
using the money of new investors rather than any real return on
an investment. When the rate of new investors starts slowing
down, such a scheme will be unable to meet its payment
Chain letters are very similar to pyramid schemes. You may
receive a letter in the post promising you large amounts of money
if you send money to the addresses on the letter, photocopy the
letter with your own name on it and send a certain number of
copies to other people. As is the case with other pyramid
schemes, those who are in on this scam early will make money,
latecomers always lose as the letter loses momentum. Some chain
letters do not involve money - they promise good luck if you pass
the letter on and bad luck if you do not.
Make sure that property developers are able to stick to their
promises. For instance, in a new development there may not yet be
stormwater drainage, sewerage, street lights, electricity or
roads although the developer might claim that all these things
will be provided by the government. Find out whether this is true
and do not buy if you have any doubts. Also, check the track
record of a property company before having any dealings with it.
Gambling games on the street
You may see a group of people playing a gambling game on the
pavement. One such game is played with a number of bottle tops. A
stone is put under one of the bottle tops and they are moved
around. A number of bystanders stand around and bet on which one
is hiding the stone. The betters, who are really all in collusion
with one another, draw gullible passers-by into the game. By
sleight of hand, the tops are manipulated so that, once newcomers
have risked their money, they lose the bet. If betters are
cautious and initially only bet a small amount, the tricksters
may be willing to allow them to win in order to build up the
confidence to risk a large bet.
Be careful of anyone coming up to you trying to sell you
something, or trying to get you to give donations to causes you
have never heard of, or asking you to give them money on the
promise of receiving something later. Confidence tricksters may
try to gain access to your house claiming to be police officers,
government inspectors or people who do repairs. Demand proof of
identity and telephone the person's employer whenever you are
unsure about whether an official is genuine or not. One popular
confidence trick is for a group to approach a person in a public
place and ask an easy quiz question. The person is congratulated
on winning a prize when the correct answer is given.
Having won the victim's confidence, the con artists then say
they know how to double a large sum of money immediately. The
person is encouraged to draw all the money from his or her bank
account and to hand it over. With broad smiles and much apparent
warmth, the group agrees to meet the victim to hand over the
proceeds but, of course, they never arrive.
Another trick is to offer a person something valuable at a low
price. Victims are persuaded to hand over the money or, if they
do not have all of the money, whatever money they have as a
'deposit'. The fraudster promises to deliver the goods at the
same place the next day...
Be suspicious of callers claiming to represent a 'charity',
often proffering a book with an official-looking stamp in it.
The book usually contains initials or signatures showing
donations allegedly made by the public. If the appeal is genuine
you would be entitled to a receipt for your donation bearing an
official fund-raising number. (See consumer