For many South Africans, the idea of owning property is a distant dream. In a country with such a big inequality gap, many people can't look forward to owning a home.

Some fraudsters have started taking advantage of this and are luring people into "property stokvels" that are nothing more than elaborate scams.

They are everywhere on social media, and all of them require you to attend some sort of presentation or join a WhatsApp group where registration fees are charged. Stokvel scams are nothing new to South Africans - scammers just keep presenting seemingly new concepts to impress unsuspecting investors.

The property stokvel scams work this way:

Each member contributes an amount monthly and the pooled funds are used for the benefit of a single member who wants to buy property.

Once that member's property is bought, the next member in line is assisted to buy a property.

This continues until all members in the group have a property.

Members are required to pay an "administration fee" that will either be a percentage of their contribution or a predefined monthly payment.

Members are also required to pay a registration fee. The purpose of these fees is never disclosed.

How do you know you're being taken for a ride?

If you're invited to join an elaborate property stokvel presentation and are presented with a complex business structure, go through all the information with a fine-tooth comb. Do not allow yourself to be pressured into signing or giving money until your questions are answered. Stokvels should have a leadership structure that outlines who the chairperson and treasurer are, as well as the purpose of the stokvel. The stokvel should also have a constitution that outlines, in clear, easy-to-understand language, where member funds go and how they're redistributed.

Contributions should go to a single bank account. Be careful when funds are channelled to individuals or separate accounts - for example, registration funds going to one account and monthly contributions to another.

Join a stokvel that is registered with the National Stokvel Association of South Africa.

If the stokvel is part of the association, you can lodge a complaint with it if you suspect the stokvel isn't the real deal. You should also search social media platforms, online forums and media reports to see if the scheme has been in the news for the wrong reasons.

Watch out for some warning signs. A legitimate business will set up a proper website and business e-mail.

If the stokvel operates under a formal business name but uses a Gmail, Yahoo or Hotmail address, be careful.

Also look out for strange jargon. Sometimes scamsters use made-up concepts to make their investment case glamorous but can't explain these clearly.

Property stokvel scams are tricky to spot because, unlike pyramid schemes that claim to double your returns, they can appear to be legitimate and don't seem too good to be true.

Even if there are what seem to be legitimate panel discussions and meetings, be cautious. Committing to a scheme that will only benefit you a couple of years down the line when there's no guarantee that your premiums are safe is folly.

Ask the person running the stokvel where your money will be invested and how the stokvel can prove to you that it is invested.

How can you keep track of your contributions? Do you get a monthly statement and is the contribution structure transparent - that is, are you able to see exactly where your money is going?

Ask what happens should a member fail to pay. Find out what recourse you have should the scheme collapse - how do members get their money back?

Be sure to ask the important questions and safeguard your money. If you suspect foul play, you can report the stokvel to the South African Reserve Bank at www.resbank.co.za or on the Financial Services Board's fraud and ethics hotline at 0800313626. But be aware that reporting a fraudulent stokvel to the Reserve Bank doesn't mean you'll get your money back.

• Tsamela is the founder of piggiebanker.com