Tuesday, December 14, 2010

Poor Man's Press Ombudsman censures Sunday Times

Dear Brendan Peacock, Sunday Times Business journalist,
          Nice piece you wrote in the Money & Careers section of your paper. It was extremely helpful to warn us less sophisticated investors about what to look for before taking the plunge. One reads too many stories of people, particularly pensioners, who have lost their life savings in get-rich-quick schemes that turned out to be anything but that.
          So if your story has saved just one person from making one of these disastrous mistakes it will have achieved something. As you know it was headed "HALLMARKS OF A SCAM. Look very deep before you leap" and "The first sign of a scam is the outrageously good return it seems to offer."
          As the recently appointed Poor Man’s Press Ombudsman I hope you don’t mind me asking, How well do you read your own newspaper? And can you ask the same question of your overall Editor, Ray Hartley to save me the trouble.         
          In your report Brendan you quoted Louis Strydom, Pricewaterhouse-Coopers’ top forensics expert. He told us readers what to look for when a tempting, money making opportunity is presented.
          And on Page 4 of the main paper in the same edition in which your story appeared there was this interesting ad which I would like you to compare with what Strydom had to say.
          Set against a black background so that the white letters stood out impressively it began, "Earn up to R100 000 p/m. Get your slice of the Telcoms Revolution NOW and secure your financial future. Capital Required: R300 000.  Limited opportunities! Don’t miss out!"  And to make it even more enticing for the investor he didn’t have to work for his money. He could sit back and watch the returns rolling in because the ad said, "Passive income." It ended with these reassuring words, "Well established company. References available." It’s so well established that it is too bashful to mention its name.
          Let’s now look at Strydom’s warning signs to see if any of them are in this ad.

  •        If it seems too good to be true it probably isn't.
  •        Any investments that offer returns well above market-related rates can be indicators of something amiss.
  •        Terms such as ‘act quickly’ or ‘limited space available’ put pressure on investors to make hasty decisions.
  •        Legitimate opportunities are generally offered through reputable, licensed financial institutions and the returns on investments promised will always be market related.
         The ad only gave the first names and cell phone numbers of two people as well as 011 numbers for the office in a complex in Roodepoort on the outskirts of Johannesburg.
         As you evidently don’t notice these things I feel I should point out that almost touching this Telcoms ad was this dire cop-out from your own paper. In big black letters it began "WARNING Readers are advised to carefully scrutinise advertisements offering investments opportunities. The Sunday Times cannot vouch for the claims made by advertisers."
         Even before I got my Ombudsman’s, appointment, by Presidential decree I must add, I began campaigning to get your paper to stop carrying ads that it was worried about instead of publishing this unacceptable warning. I’ve been going on about this for well over a year now but the hypocrisy continues unabated.
         Last August this well established company I’ve been talking about was offering R100 000 per month on a R150 000 investment. Then its name, Xtreme Telecoms started appearing in ads that offered the same income, but the investment required had gone up to R250 000. And in the ad in December that appeared at the same time as your article the name disappeared and the investment required had shot up to R300 000. Does the Reserve Bank have any idea about what is happen to inflation?
         When I phoned Hennie at Xtreme Telecoms he told me the company had been going for 14 months. And when I said that hardly made it well established he told me angrily not to waste his time and cut me off.
         Last September your section of the paper carried a shorten version of my letter complaining about  Xtreme’s ad as well as others like the one where you could earn 30% annually with no risk and interest and capital guaranteed. In your sister paper, The Times people were invited to Become a Millionaire by investing R100 000.
         The list goes on while the Sunday Times carries your sanctimonious article on how not to get scammed. What’s that number for the ANC Government’s new Press Policeman? I seem to have mislaid it.
         Yours truthfully,
         Jon, Investigative Journalist of the Old School.
PS. I’m sure your tail is a lot more colourful than my face.

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