The Financial Sector Conduct Authority (FSCA) warns the public to be cautious when taking up funeral insurance policies issued by Magoda Funeral Parlour (Pty) Ltd (Magoda Funeral Parlour).
The FSCA received a complaint that Magoda Funeral Parlour may be issuing insurance policies to members of the public which were possibly not underwritten by an authorise long-term insurer. The FSCA attempted to visit the premises indicated as the business address of the parlour, but it transpired that it was a residential property and the residents had no knowledge of the parlour.
Without commenting on the business of Magoda Funeral Parlour or its products and services, the FSCA points out that for a company to issue insurance policies in South Africa, it must be authorised by FSCA and the Prudential Authority (the PA). Conducting financial services business or insurance business without a licence is a criminal offence.
Magoda Funeral Parlour is not so authorised and does not hold a licence to conduct financial services business.
Members of the public should always check:
- that an entity or individual is authorised by the FSCA to provide financial products and services, including for giving recommendations about how to invest.
- what category of advice the person is registered to provide, as there are instances where companies or people are registered to provide basic advice for a low-risk product and then offer advice on far more complex and risky products.
- that the FSP number utilised by the entity or individual offering financial services matches to name of the FSP on the FSCA database.
What is Fraud? “Fraud” is any activity that relies on deception in order to achieve a gain. Fraud becomes a crime when it is a “knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment” (Black’s Law Dictionary). In other words, if you lie in order to deprive a person or organization of their money or property, you’re committing fraud.