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General Interest

Ponzi Schemes: Can Liquidators Claw Back 600% of Payouts?

By | General Interest, Insolvency / Liquidation

“MTl’s business clearly amounted to an unlawful ponzi-scheme, i.e. a fraudulent investing scam promising high rates of return to investors and generating returns for earlier investors with investments taken from later investors.” (Extract from the MTI judgment)

Recent media reports of the MTI (Mirror Trading International) liquidators making repayment demands of investors highlight once again the dangers of falling for “too good to be true” investment schemes.

The problem is that by their very nature, all pyramid schemes (including “ponzi” schemes) eventually fail, leaving the vast majority of investors with nothing but the hope of being awarded a partial dividend on their claims when the holding entity is eventually liquidated.

But what if an investor is one of the “lucky early birds” who got paid out before the scheme’s collapse?

Debunking the “early bird investor catches the worm” myth

A common myth is that the only losers in a collapsed pyramid scheme are those investors who didn’t get their money out in time, and that the “early birds” who did act quickly are winners in the equation.

The problem for them is that liquidators have wide powers to reclaim payouts made to investors (as creditors) before liquidation. The idea is that payouts by definition come from new money paid in by new investors, and that to be fair to them it is necessary to put everything back into the pot for all investors and other creditors to share according to their claims. But of course they only share in what’s left after all the liquidation costs and fees have been settled, and in a large and complex liquidation like MTI’s those costs will be particularly substantial.

The practical issue is that whatever was paid out to investors/creditors – both by way of the original investment and the “profit” on it – is likely to be claimed back by the liquidator. And the investor forced to repay everything is left with nothing but a concurrent claim in the liquidation.

Of course a liquidator’s prospects of recovery will be boosted if they can obtain a court declaration of unlawfulness of the scheme and invalidity of the investment contracts (as has already happened in the MTI liquidation), but let’s see how that could then play out in practice.

The liquidator’s options for recovery

To summarise the options available to a liquidator in recovering payouts made before liquidation –

  • “Voidable preference”: If the payout was made within six months prior to liquidation and immediately thereafter the company’s liabilities exceeded its assets, it is repayable to the liquidator unless the investor can prove that that the disposition was made “in the ordinary course of business” and without intention to prefer one creditor above another. That could be hard to prove in the case of a pyramid scheme.
  • “Undue preference”: If at any time a payout was made by the company with the intention of preferring one creditor above another, it is repayable to the liquidator if the company’s liabilities exceeded its assets at that stage. In this case, the onus is on the liquidator to prove the intention to prefer, but that may perhaps be easier to prove in a pyramid scheme scenario than in other corporate failure scenarios.
  • “Disposition without value”: Monies paid out to a creditor at any time must be repaid to the liquidator if the company received no “value” in return, subject to –
    •  Where the payout was made more than two years prior to liquidation, the liquidator must prove that immediately thereafter the company’s liabilities exceeded its assets.
    • But if the payout was made within those two years, the onus switches to the creditor to prove that immediately thereafter the company’s assets exceeded its liabilities. In the case of a pyramid scheme that may be impossible to prove.

    Note that the creditor in such a case will also generally lose their claim against the company.

  • “Collusive dealing”: If the liquidator can prove that a creditor colluded with the company to pay out monies with the effect of prejudicing creditors or of preferring one creditor above another, the colluder will not only forfeit their claim but can also be ordered to pay in a penalty of up to the same amount. A liquidator could for example try to prove that the investor/creditor was aware of the unlawfulness of the scheme at the time of the payout.
Even worse, could investors lose a lot more than they put in?

Media reports suggest that an MTI investor, who invested R20,000 and was paid out R21,000 shortly before liquidation, received a demand from the liquidators to repay not just his initial investment and profit, but for 600% of what he put in. The sum claimed (at date of writing) is R122,000, that being the current value of the bitcoin he initially invested – the argument being presumably that what was disposed of was “property” (bitcoin), in which case the liquidators would be entitled to reclaim either the bitcoin or its value at the date the disposition is set aside. The justification will no doubt be that that is what the company and its creditors as a whole have actually lost as a result of the disposition. If our courts agree with that view, being sued for a great deal more than the original investment will be a particular risk when the investment is a volatile asset like bitcoin.

The High Court has previously declared MTI an illegal and unlawful scheme and all agreements between it and investors unlawful and void, but that of course is only the first step for the liquidators in proving their claims against investors. Media reports suggest that many investors are lawyering up to oppose the claims so we must wait and see how it all plays out in the courts.

Regardless, the risk of not only losing the original investment but then also having to cough up a great deal more over and above that certainly does fire yet another warning shot across the bows of anyone tempted to invest in any scheme promising unrealistic returns. Prospective investors shouldn’t part with a cent until they confirm that the scheme is actually legitimate.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Dual Citizens: Good News if You Lost Your South African Citizenship, But…

By | General Interest

“Citizenship is the gateway through which a number of rights in the Constitution can be accessed.  It enables a person to enjoy freedom of movement, freedom of trade, and political representation” (Constitutional Court, quoted in judgment below)

Note: Many South Africans who should be aware of this new development will be overseas and/or may not have heard of the Supreme Court of Appeal decision we discuss below. If you know of any such person, please consider forwarding this to them as soon as possible.

Reportedly, thousands of South Africans have lost their citizenship through applying for citizenship or nationality of another country without first obtaining Ministerial permission to do so.

Most will have done so unknowingly, ignorant of the fact that whilst dual citizenship itself is allowed, our Citizenship Act requires you to get permission beforehand. Only minors (under 18s) and persons acquiring foreign citizenship by marriage were exempt.

The good news is that the SCA (Supreme Court of Appeal) has now ordered that –

  1. That provision is inconsistent with the Constitution and is invalid retrospectively; and
  2. Citizens who lost their citizenship by operation of that provision “are deemed not to have lost their citizenship.”
But – the Constitutional Court still has to confirm the invalidity order

The SCA’s order of invalidity has no legal force unless and until confirmed by the Constitutional Court (CC), and there is (at date of writing) no indication of when this will go to the CC for confirmation, whether or not Home Affairs will oppose its confirmation in the CC, and whether or not they will continue to enforce the section in the interim. In the interim, tread very carefully if you are either planning to apply for foreign citizenship/nationality, or if you were deprived of SA citizenship and plan to return to the country in the near future.

Another “but” – never let your SA passport lapse!

That new judgment does not affect in any way the fact that, although you can travel freely around the world on your second passport, you must always enter and depart from South Africa on your valid SA passport.  Keep renewing it!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Ponzi Schemes: Another MTI Judgment, Risks and Red Flags

By | General Interest

“MTl’s business clearly amounted to an unlawful ponzi-scheme, i.e. a fraudulent investing scam promising high rates of return to investors and generating returns for earlier investors with investments taken from later investors.” (Extract from judgment below)

In times of economic turmoil, the promise of “easy money” can be incredibly enticing. Unfortunately, this allure often leads people into the clutches of fraudsters who operate ponzi and pyramid schemes.

But why are these scams so successful at fooling even the most astute investors? The answer lies in several factors. First, the promise of quick and substantial profits taps into our desire for financial security and independence. Second, scammers often prey on our emotions and exploit our fear of missing out on lucrative opportunities. Third, they employ persuasive tactics, such as using testimonials and social proof, to gain our trust.

The latest High Court judgment in the MTI (Mirror Trading International) liquidation saga highlights yet again the dangers for investors who get sucked into these schemes.

“An illegal and unlawful scheme”
  • MTI was founded in 2019, promising high returns to investors (members of “My MTI Club”), pooling bitcoin for trading “on the global cryptocurrency market”. In 2020, referral bonuses for introducing new members were implemented.
  • This latest judgment is part of an extensive saga of litigation involving liquidators, investors/members, creditors and directors (who still steadfastly deny any wrongdoing). In this matter the liquidators applied to the High Court for a series of declarations aimed at facilitating their claims against investors and others.
  • The liquidators succeeded in obtaining declarations that –
    • MTI’s business model is “an illegal and unlawful scheme”, and
    • “All agreements concluded between MTI and its investors in respect of thetrading/management/investment of bitcoin for the purported benefit of the investors, are declared unlawful and void ab initio [void from the beginning]”.
  • They failed in their attempts to have MTI declared “factually insolvent” (i.e., its liabilities exceeded its assets) from 2019, nor did they obtain declarations that payments made by MTI to investors/members, commission earners and others amounted to “dispositions” recoverable by the liquidators. Both would have made it easier for them to recover from anyone who ever received any form of payout from MTI, but that is unlikely to deter the liquidators from pursuing these claims.

In any event both sides will presumably appeal this latest judgment, and for now at least it seems that investors/members, whether “winners” (those who got payouts exceeding their investments) or “losers” (presumably the vast majority of investors/members as is invariably the case with ponzi schemes), must remain concerned that not only will their claims turn out to be valueless, they may also have to pay back into the liquidation everything they were ever paid out if the declarations of illegality and voidness are confirmed on appeal

Even if their claims are eventually allowed and proved, they must wonder what if anything they’ll be awarded in light of a R931m preferent claim proved by SARS.

The red flags to share with friends, family, colleagues and employees

The bottom line is that, when a ponzi or pyramid scheme inevitably collapses, investors risk losing everything.

To protect ourselves and others, it’s essential to be aware of the warning signs. Keep in mind at all times that “if it looks too good to be true, it probably is” and be alert to key “red flags” such as guarantees of high returns with little or no risk, complex investing and compensation structures, and an emphasis on recruitment rather than product sales.

Sharing this information with friends, family, and colleagues is crucial in preventing more people from falling victim to these schemes. Employers, in particular, should educate their staff about the dangers and provide resources to help them avoid becoming victims.

Stay informed, be vigilant, and protect yourself, your employees and others from the siren call of “easy money.”

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Ombuds – Why and How to Use Them

By | General Interest

“Who you gonna call?” (Ghostbusters)

An “ombud” (often called ombudsperson, ombudsman or ombudswoman, and sometimes not referred to as an “ombud” at all) is an independent and impartial person or office who will investigate any complaint you may have against a business, government agency, or public or private institution falling under their authority.

Ombuds seek to resolve disputes (to the benefit of all parties) fairly, efficiently, and cost-effectively by acting as mediators between complainants and the entity being complained about. Many have the power to make binding “determinations”. Most are free to complainants.

Fighting your bank, body corporate, or panel beater: Who you gonna call?

When you have a beef with your bank or body corporate, a grievance against SARS, or a fight with the panel beaters, and whether you are an individual or a business, think of calling in the appropriate ombud.

There are many ombuds in South Africa, some limited to a specific sector and some to a specific entity – often institutions like universities, municipalities etc have their own internal ombud.

There are too many to list all the ombuds here but in particular bear in mind those ombuds with a wider remit than just one institution or industry player. We’ve compiled for you a list of some of the most important ones and their contact details (Name; Website; Tel. No.; Email; What areas they cover) –

  • Public Protector South Africa: www.pprotect.org; 0800 11 20 40; info@pprotect.org. Investigates complaints against government entities, with “the power to investigate, report on and remedy improper conduct in all state affairs. The Public Protector must be accessible to all persons and communities. Anyone can complain to the Public Protector.”
  • Community Schemes Ombud Service (CSOS): www.csos.org.za; 010 593 0533; info@csos.org.za. Alternate Dispute Resolution services for all participants in residential, commercial and industrial “community schemes” (sectional title bodies corporate, Homeowners Association complexes etc.).
  • FAIS Ombud (Ombud for Financial Services Providers)www.faisombud.co.za; 0860 66 327; info@faisombud.co.za. Complaints against financial service providers, including insurers, banks, insurance brokers (long- and short-term insurance), investment managers, and financial advisors and intermediaries. The FSCA (Financial Sector Conduct Authority www.fsca.co.za) also has a complaints procedure.
  • Ombudsman for Long-Term Insurance: www.ombud.co.za; 0860 103 236; info@ombud.co.za. Complaints against subscribing insurance companies that offer long-term insurance products, such as life insurance and disability cover.
  • Ombudsman for Short-Term Insurance (OSTI): www.osti.co.za 0860 726 890 info@osti.co.za. Complaints by the insuring public against short-term insurers offering motor, homeowners, household, travel, disability, credit protection, commercial etc cover.
  • Pension Funds Adjudicator: www.pfa.org.za; 086 066 2837; enquiries@pfa.org.za. Investigates complaints against pension funds and their administrators, including issues related to benefits and investments.
  • Ombudsman for Banking Services (OBS): www.obssa.co.za; 0860 800 900; info@obssa.co.za. Complaints against banks that are members of the Banking Association of South Africa.
  • National Credit Regulator (NCR): www.ncr.org.za; 0860 627 627; complaints@ncr.org.za.Complaints against credit industry participants (including debt counsellors), working with and cross-referring complaints with the Credit Ombud (below).
  • Credit Ombudsman of South Africa: www.creditombud.org.za; 0861 662 837; ombud@creditombud.org.za. Complaints against member credit bureaus and credit providers, working with and cross-referring complaints with the NCR (above).
  • Consumer Goods and Services Ombud: www.cgso.org.za; 0860 000 272; info@cgso.org.za. Complaints by consumers against members of the Consumer Goods and Services Industry (retailers, suppliers, importers, distributors etc.). Complaints relating to credit agreements need to go to the Credit Ombud (see above). If mediation fails or if a non-member entity is involved, complaints will be referred to the NCC (National Consumer Commission)www.thencc.gov.za.
  • Motor Industry Ombudsman of South Africa: www.miosa.co.za; 010 590 8378; info@miosa.co.za. Investigates complaints against the automotive industry, including car dealerships and repair shops. If mediation fails, complaints will be referred to the NCC (National Consumer Commission)www.thencc.gov.za.
  • NHBRC (National Home Builders Registration Council): www.nhbrc.org.za (Complaints process here); 0800 200 824; thenhbrc@nhbrc.org.za; Not called an “Ombud Service”, but all home builders must be registered with the NHBRC and it will address and attempt to resolve all complaints.
  • Health Ombudsman of South Africa: www.ohsc.org.za; 0860 104 146; info@ohsc.org.za; Complaints against healthcare providers, including hospitals, clinics, and doctors. Lodge complaints here. Complaints can also be lodged against specific industry players to these industry bodies –
  • Office of the Legal Services Ombud (OLSO): https://justice.gov.za/olso/index.html; 010 023 5501 or 076 235 9887; TRamuada@justice.gov.za or TLegora@justice.gov.za. Complaints against legal practitioners and the Legal Practice Council (LPC). Complaints must first be lodged with the LPC (complaints procedure here and provincial complaint forms here).
  • Office of the Tax Ombud. www.taxombud.gov.za/; 0800 662 837; complaints@taxombud.gov.za. Taxpayer complaints against SARS (South African Revenue Services).

There are many more – Google for any specifics.

Present your complaint effectively!

A final thought – how well you present your complaint and your side of the story to an ombud will directly impact your chances of a successful outcome, so specific legal advice is a no-brainer here, particularly in larger disputes.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Living Wills: 6 Myths Busted

By | General Interest, Wills and Estate Planning

Health issues and mortality are facts of life, no matter how remote they may seem at the moment, nor how distressing they are to contemplate. For your family’s sake as well as for your own, make sure that you have a Living Will (or another form of “advance healthcare directive” such as a Durable Power of Attorney for Healthcare) in place. While you’re at it, check that your loved ones also make Living Wills.

6 Myths

Let’s get some pervasive myths about Living Wills out of the way. In doing so we’ll answer the question of why everyone, young and old, should have one.

Myth 1: “It’s not important, I already have a will”. Not true, your “Last Will and Testament” is another concept altogether. Certainly it’s a vital document, quite possibly the most important one you will ever sign, but it talks only as to what happens after you die. It won’t help you before you die.

In contrast, a Living Will applies while you are still alive, setting out what medical treatment you do and don’t consent to. It speaks for you when you can no longer speak for yourself. It addresses your right to decide whether or not you are to be kept artificially alive after you lose the capacity (physical or mental) to object. 

Myth 2: “It’s euthanasia or assisted dying”. No, it’s a totally different concept. Euthanasia and “assisted dying” (or “medically assisted suicide”) are unlawful in South Africa. But your Living Will does not instruct doctors to actively intervene to end your life nor to assist you in committing suicide. In fact, it does the opposite, instructing that nature be allowed to take its course and refusing any active intervention to keep you alive artificially (possibly in pain and distress) after all hope of recovery has gone.

We must all decide for ourselves the extent to which we are comfortable with this concept. Discuss any conscientious or religious concerns with your spiritual advisor if you have one.

Myth 3: “It’s selfish”. In no way is it selfish. It helps your loved ones make the hard choices if and when they are called on to do so, and it spares them the distress of feeling responsible for making life and death decisions for you at the worst possible time. You relieve them of that burden by telling them what your decision is. It could also save your family a fortune in crippling and totally unnecessary medical expenses.

Myth 4: “It won’t be honoured so it’s pointless”. Advance healthcare directives have to date neither been specifically recognised in law, nor held unenforceable by our courts or legislation. A large body of opinion suggests that they can and will be enforced because of the general rule that patients must consent to treatment. Both the HPCSA (Health Professions Council of South Africa) and SAMA (South African Medical Association) have issued guidelines for honouring advance directives, with medical practitioners called upon to encourage their patients to put directives in place.

Myth 5: “It can wait until tomorrow”. No, it can’t. The most settled of lives can be upended in the blink of an eye. Traffic accidents, strokes, sudden onset illnesses (think covid!) and the like often don’t announce themselves at all.

Myth 6: “I’m too young to need one”. Nope. Those horror scenarios we mentioned above come out of the blue to young as well as to old. Express your wishes while you can – it’s too late afterwards.

What should be in your Living Will and who should you give it to?

There is no set format here but several standard templates are available. If you are given one or get one online, it’s important to have your lawyer configure it to set out clearly and lawfully your own specific needs and wishes, consistent with any religious or moral beliefs you may hold. This is your chance to set out what you want. Make it easy for your loved ones and healthcare workers to honour those wishes – don’t for example ask a doctor to actively end your life, that’s illegal.

Sign several originals, keep one for your own use and give the others to your loved ones, your healthcare practitioners, your lawyer and anyone else who might end up having to implement it or oversee its implementation (a close friends perhaps, or a retirement facility if you live in one).

Diarise to review and renew it regularly – the attending doctor must be satisfied that you were mentally competent when you signed the directive, and that your wishes haven’t changed in the interim.

What about a “Durable Power of Attorney for Healthcare”?

This is a document (also as yet untested in the courts) in which you appoint someone you trust, normally a close family member, as your substitute healthcare decision-maker should you become unable to make your own decisions. It’s a very personal decision whether to go with this concept or to just stick with a Living Will, but you could perhaps have both – a Living Will plus a power of attorney authorising your decision-maker to ensure that it is implemented.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Why You Should Sign a Power of Attorney Before You Emigrate or Travel

By | General Interest
If you are emigrating, or perhaps just going overseas for an extended holiday or work contract, you may well leave behind some form of “unfinished business”. Perhaps you own a property, other assets or bank accounts needing attention, or have outstanding tax/business/financial affairs, or contracts to be signed, cars to be licenced, or something else unresolved that requires your future agreement or signature. Even if you can’t think of anything specific, consider executing (before you leave of course) an appropriate power of attorney in favour of someone you trust to act for you.
What is a power of attorney?
A Power of Attorney (“POA”) a document you sign authorising someone else to manage your affairs on your behalf as your agent. You can grant it for a specific purpose as a “Special Power of Attorney” or it can be a widely worded “General Power of Attorney”. In theory you can grant power of attorney orally, but in practice no one will (or should) act on that. You must be at least 18 years old to execute a POA, and it remains valid only for so long as you have “legal capacity”. You can terminate the POA at any time.
Why is a power of attorney important?
You can in a pinch execute and sign contracts, legal forms and the like whilst in a foreign country, but it can be a real mission. Depending on the circumstances, you may need to find (and pay) a notary public or embassy/consular official to authenticate documents, your signature, copies of papers etc. If it’s an embassy or consulate you need, you could find yourself travelling to another city, perhaps even another country. And if everything isn’t done exactly right the first time (a particular risk if you are dealing with someone not fully versed in South African law and procedure), you could find yourself repeating the process – perhaps even more than once in a sort of “Ground Hog Day” scenario. All avoidable if you leave behind in South Africa a valid and correctly structured POA.
How should you structure it?
The structure you will need depends on what affairs you need dealt with and why. It can be difficult to decide whether a POA is appropriate for a particular purpose, and if so how wide or how restricted you should make the powers you are granting to your agent. It can also be a challenge to find the correct wording to satisfy the requirements of whichever authority or other party is involved – for instance, specific forms are required by the Deeds Office, SARS, and banks. You might also need to leave behind more than one POA, each structured for a particular purpose. Similarly, you may be uncertain as to who to appoint as your agent, who is best qualified for each purpose, even perhaps who can you trust to act professionally and honestly. There is no prescribed form and no list of required formalities for a valid POA but there are many possible permutations and legal risks involved, so the only way to ensure that it is valid and fit-for-purpose is to seek professional assistance specific to your circumstances. Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Tax Freedom Day 2022: The Day We Stopped Working for Government

By | General Interest, Tax
“Taxpayer: One who doesn’t have to pass a civil service exam to work for the government” (Anonymous)
“Tax Freedom Day” is the first day of the year on which we South Africans (we’re talking about the “average” taxpayer here) have finally earned enough to pay off SARS and to start working for ourselves. This year the predicted date was 12 May 2022. That’s three days later than last year, and a whole calendar month later than in 1994 when we first started recording this. That’s a depressing trend, but it’s a worldwide one and we certainly aren’t the worst-off country – Belgians for example only get to celebrate on 6 August! Certainly food for thought for anyone thinking of emigrating. Have a look at Wikipedia here for some country-by-country comparisons. Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Your Website of the Month: How to Avoid Falling Victim to a “Tinder Swindler”

By | General Interest, Website of the Month
“But love is blind, and lovers cannot see” (Shakespeare)
Note: Please think of sharing this article with any family member, friend or colleague who might benefit from knowing which “red flags” to watch for when using dating apps and social media. Even if you haven’t yet watched the hit Netflix film “The Tinder Swindler”, you will know of the huge problem worldwide of swindlers using dating apps and social media to part victims from substantial amounts of money. Hearts are broken, lives ruined, savings lost, huge and unrepayable debts incurred. It’s easy to think “I would never fall for that” but the reality is that everyone is vulnerable – these “romantic fraud” swindlers are masters at using powerful social engineering techniques to identify suitable victims, draw them in, and fleece them of everything. Norton Security provide a wealth of information to help you navigate these shark-infested waters safely in their article “Romance scams in 2022: What you need to know + online dating scam statistics” here. If you read nothing else, have a look at the ones we’ve highlighted for you –
  • “What is a romance scam?” (With a list of 7 common ones)
  • “How romance scams work” (with Infographic)
  • “Warning signs: Lies romance scammers tell” (6 red flags with Infographic “Is Your Cyber Sweetheart Swindling You?”)
  • “10 tips to avoid romance scammers and protect yourself” (with a long list of Do’s and Don’ts)
  • “How to report an online dating scam”
  • “20+ online dating scam statistics” (Infographic “Heartbreaking Statistics”) [The problem’s huge – victims lost around $304 million in 2020 alone]
  • “Romance scams on the rise”
  • “The real price tags of online dating”
  • “Online dating scams and older adults”
  • “Who’s most susceptible to romance scams”
  • “Stalker ware is trending up”
  • “How a romance scam works” (Infographic)
  • “Online Dating Advice” (Infographic)
If you aren’t sure that your online Prince (or Princess) Charming is 100% legitimate, ask someone you trust for objective advice before you find yourself in a hole you can’t escape from. And if you do find yourself one of the many victims, call in professional advice – the sooner you do, the quicker you can start extracting yourself from your nightmare situation. Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Using the New Cybercrimes Act to Protect Yourself

By | Criminal Law / Crime, General Interest
“…cybercrime has increased by over 300% during the COVID-19 pandemic – making it one of the biggest threats to businesses around the globe.” (Property 24 report)
The Cybercrimes Act, which has been years in the making, is now (with effect from 1 December 2021) at last largely in force. Although some provisions still remain on hold (most notably some of those relating specifically to “revenge porn” and the granting of protection orders), a whole range of unlawful cyber-related activity has now been specifically criminalized. The police have also been given wide powers of investigation, search, access and seizure, and the penalties for contraventions are substantial. The pandemic-forced shift to a “work from home, shop and communicate online” culture has reportedly seen cybercrime rocketing by 300%. As always our best protection from online criminals is prevention, but for anyone unfortunate enough to fall victim to them at least the new Act now provides us all with a layer of legal protection we haven’t had before – but only if we actually use it and report cybercrime.
The new crime categories
The Act’s provisions are detailed and complex, so this is of necessity just a very brief summary. But for most practical purposes what you need to know is that both individuals and organisations now face prosecution for any –
  • Unlawful access to a “computer system” or “computer data storage medium” (i.e. “hacking”).
  • Unlawful interception of or interference with data, computer programs, data storage mediums and systems.
  • Unlawful acquisition, possession, provision or use of passwords, access codes and the like (PINs, access cards and devices included).
  • Cyber fraud, forgery, extortion and theft.
  • “Malicious communications” (which would by definition include messages sent by email or via Social Media channels, WhatsApp and the like) to the general public, individuals or groups that –
    • Incite damage to property or violence to a person or persons,
    • Threaten a person or persons with damage to property or violence,
    • Disclose a “data message of an intimate image of a person” without that person’s consent, and regardless of whether the victim is identifiable in the image itself or only from a description or other related information. Moreover the image can be “real or simulated”.
A particular warning to Social Media users
Posting or sharing anything prohibited by the Act – perhaps particularly any of the types of “malicious communication” referred to above – could land you in some extremely hot water. Think before you post!
What about “revenge porn”?
As noted above, some of the Act’s provisions relating specifically to “revenge porn” are not yet in effect, but there are already prohibitions against it in other legislation, plus the offences mentioned above relating to disclosure of “intimate images” should at least partially assist victims in the interim. Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

South Africans – Don’t Lose Your Own Citizenship When You Apply for Another!

By | General Interest

“… it cannot be said as the applicant suggests that the loss of citizenship takes place without notice and automatically as the citizen in that position has proper notice through the structure of the section of both the opportunity to seek consent to hold dual citizenship and the consequences of acquiring a second citizenship without obtaining such permission. It therefore is not a secret provision but one that every citizen who voluntarily seeks to acquire another citizenship should ordinarily acquaint themselves with” (extract from judgment below)

Note: Many South Africans who need to be aware of this risk will be overseas and/or may not have heard of the High Court decision we discuss below. If you know of any such person, please consider forwarding this to them as soon as possible.

A recent High Court judgment has confirmed that you will lose your South African citizenship if you apply for citizenship of any other country without prior Ministerial permission.

It is irrelevant whether you are South African by birth or not. It is also irrelevant why you want to acquire dual citizenship – perhaps you are living/working overseas, perhaps you want a second passport just to make travelling easier, perhaps you have financial reasons.

How and why you lose your South African citizenship

Dual citizenship itself is allowed, but our Citizenship Act provides that if “by some voluntary and formal act” you acquire citizenship or nationality of another country, you are deprived of your South African citizenship. And Home Affairs is interpreting that to mean that you have voluntarily given up your South African citizenship by your own “formal act” of applying for foreign citizenship.

You are exempt only if …

This loss of citizenship does not apply to –

  1. Minors (under 18 years of age) and
  2. Acquisition of another country’s citizenship by marriage.
How to retain your South African citizenship

The good news is that you can apply through Home Affairs for authority to retain your SA citizenship – but your application must be approved before you acquire your second citizenship. 

The bad news is that it takes time, so don’t leave it to the last minute! Even before the pandemic, processing time was given as “3 to 6 months” and media reports suggest that delays are now much longer, although perhaps the publicity surrounding the High Court case in question will assist in improving the situation.  If you are overseas, you should find the necessary forms and instructions on your local SA Embassy/Mission/Consulate website.

You’ve lost your citizenship – what now?

This is very much second prize, but you can still apply to get your citizenship back –

  • If you were a citizen by birth or descent you can apply for reinstatement only if you have returned to, or are living in, South Africa permanently (you still have permanent residence, you just aren’t a citizen).
  • If you were a citizen by naturalisation, you must re-apply for permanent residence or apply for exemption thereof, before you can be considered for resumption of citizenship.
  • If all else fails, consider taking the legal route. As we discuss below, the High Court has recently held that the relevant provisions of the Citizenship Act pass Constitutional muster, but there is talk of a possible appeal.
High Court: Choose how important your citizenship is to you, and know the law

There has always been speculation that this section of the Citizenship Act could be held to be unconstitutional. However, in rejecting a recent application to that effect by the Democratic Alliance, the High Court has confirmed that it passes constitutional muster and is not “irrational”.

The High Court’s reasoning was that “It is ultimately a matter of personal choice what weight each of us attaches to the idea of our citizenship”, and that this is not a case of automatic loss of citizenship without notice but rather it “is really about personal and individual choices people make about their future and often choices come with consequences.”

The section in question, held the Court, is “not a secret provision but one that every citizen who voluntarily seeks to acquire another citizenship should ordinarily acquaint themselves with … while it may be arguable that citizens cannot be expected to know every feature of the law, those citizens involved in migration and  relocation to other countries with the possibility of acquiring citizenship there must surely be expected to acquaint themselves with the law in that area of activity they are involved in.”

There is talk of an appeal but for now at least, if you have already lost your citizenship your options are limited to those set out above.

P.S. Never let your SA passport lapse! 

Although you can travel freely around the world on your second passport, you must enter and depart from South Africa on your valid SA passport.  Keep renewing it!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

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