Some of them are obvious. I know a lot of people will disagree with me about this (and some certainly did when I said this in our Facebook group recently) but I think you are entitled to judge a company by the phone number is uses.
There’s nothing wrong with cellphones. We all have them. Some of us have more than one. I even met someone recently who uses five different SIM cards. She knew what every network provider charged at every time of every day and carried several cellphones that were constantly having their SIM cards changed to save a little money. There’s also nothing wrong with free email addresses from Gmail, Hotmail and Yahoo. Almost all of us have one of them that we use for personal email or for when our business addresses are misbehaving. Nothing wrong with them at all.
There’s also nothing wrong with operating your start-up business from your bedroom, your Mum’s spare room or from an office you borrow from someone else. That’s how most start-ups operate particularly in industries like IT. We wouldn’t be using Microsoft or Apple tools right now today if they hadn’t started up in spare rooms and parent’s garages.
So these things are all fine for certain people. The future IT guru, the start-up web designer and the app developer who’ll one day be a millionaire, they’re all permitted to operate from a cell number, a Gmail address and a spare room.
But not someone who says they’ll lend you money.
Someone who clearly didn’t understand the largely unwritten rules of our Facebook group recently posted a message saying:
“Affordable loans now available from P1000-P500000.. New loans for investments, building, studies, buying a car, etc. Top ups.. consolidation / loan settlements”.It went on saying that this was just for government, council and academic officers but the thing that concerned me was that if you were interested you could contact the lender either on her cellphone number or by Whatsapp.
As I said I have nothing against cellphones and WhatsApp is fantastic but I really don’t think it’s appropriate when you’re offering to lend someone half a million Pula. Do you?
In fact, I don’t think it’s right for any financial service. Whether it’s a loan, an insurance policy or an investment, I think there are certain bare minimum standards you need to demand before you sign on the dotted line.
Firstly, you need to know that the person selling it operates from an office, not a chicken restaurant, the back seat of a car or a street corner. And no, I’m not just making those up. We’ve seen people selling financial products from each of those places. Do they really want to seem like drug dealers? The first clue that they have an office is the phone number they give you. Yes, they can give you their cell number but if they don’t also give you a landline number you need to ask yourself why they didn’t do so.
You then need to visit their office. And yes you ARE entitled to judge a book by its cover when it comes to the office of someone who wants to make money from you. The test is this. Is it the sort of place you would want your teenage daughter, sister or cousin to spend an hour alone? If not, then politely leave and don’t go back.
A legitimate company will have a pleasant office. They’ll have landlines that are ringing as you arrive. They’ll be clean, well organized, tidy and you’ll be kept at a comfortable temperature. They’ll have a receptionist who welcomes you to their offices and who knows which company you want to see.
They’ll also have a registered web domain. They’ll send you emails from something.com or something.bw. There’s no excuse for anything less than that. A domain costs very little these days and not having one will make you look shady.
However, and this is important, that’s not enough. Cast your mind back a few years and consider the example of Stock Market Direct. They claimed to offer training and advice on trading on the Johannesburg Stock Exchange and they passed most of the tests. They had offices, landlines, nice desks and lots of busy staff. I know because I went to visit them several times so I could meet Tony Samuels, the guy behind the operation. The warning bells sounded when he failed to be there for every appointment we’d agreed.
That was the big lie, the “alternate truth”. There were no offices for Stock Market Direct in any of these places other than Gaborone and there was no evidence they were even registered in any of those countries. You’ll recall that Stock Market Direct ended badly, mainly for its customers, or should I say victims. Tony Samuels was last seen heading for the border with several million Pula he’d taken from the company’s more gullible victims and despite reappearing occasionally, he is still at large.
So nice offices aren’t themselves an indicator of legitimacy but they are a good start. Then you need to start asking questions of other investors, experts in the field, industry regulators and even us if you think we might be able to help. You also need to be sceptical. Any company that offers you things that seem too good to be true are certainly trying to deceive you.
But the starting point is the little things like a phone line and a registered domain. Then you just need to be a skeptical detective. That’s the hard part.