With the growing levels of scams in world financial space, comes heavy losses. Fraudsters have been able to leverage on the insecurities and lack of knowledge of most Nigerians about financial matters to sell unsecured products to them. Once their sales departments tell you what you want to hear – BOGUS INTEREST RATES, they are home and dry. They also try, as much as possible, to appear as organised as possible. This article exists to help its readers to know what to look out for when investing in securities in Nigeria/safety tips when investing.
The Security and Exchange Commission, Nigeria (SEC) has continually and consistently made efforts to disway Nigerian investors from committing their hard-earned resources to the hands of unlicensed fraudsters. There are several publications aired solely to warn us all from falling for pranksters and fraudsters.
There are several pointers to look at when engaging with any corporate entity that offers any form of service to the public. Even if the person/company is currently registered or licensed, be careful if you spot any of these potential red flags in the person/company’s background. Always Check for Red Flags.
Check the Investment Company on SEC Website
Using the necessary search tools, you can easily find the background of an investment company. This is a great first step toward protecting your money.
For securities in Nigeria, the SEC Capital Market Operator Search provides the operator name, functions, address(es), and contact numbers and emails, and other helpful information about anyone who is registered and licensed under SEC.
Confirm if the company is registered with CAC
From the SEC website, you can be redirected to the Corporate Affairs Commission’s website to confirm if the company is even registered.
Do a Thorough Disciplinary Check
A company’s past disciplinary history can tell you a whole lot about tier willingness to abide by extant laws of the land. Do a background check on all actions that have been previously taken by a government regulator e.g CBN, SEC against the company.
Do a Quick Social Media Review
Another advice is to go to the popular social media platforms to get a history of customer complaints. Note the frequency and severity of the complaints, and look out for their responses to these complaints. Keep in mind that an avalanche of unresolved customer complaints is a service failure, and should not be ignored.
Check for Unresolved Court Cases
Lawsuits or arbitration claims brought by customers/partners are serious issues and must not be overlooked. This reviews will form a good overview on how the company has been treating their customers and partners in the past. This is exactly how you will be treated also.
Check their Friends
Affiliation with one or more entities that have been expelled from the securities industry is a big red flag. You should also note the brands they associate with/dissociate from on social media. Be very cautious about investing through someone who has been convicted of a crime, this is one of the greatest safety tips to consider when investing.
In recent times, many have become depressed, committed suicide, been rendered homeless, entered needless debts, etc. simply because they failed to do proper checks before investing their life savings. Always invest wisely.