Choice Lifestyle Change, which describes itself as providing opportunities in the bridging finance market, is offering clients returns of up to 15% per month. The organisation is currently operating in the Polokwane and Gansbaai areas, and claims to be supporting a Christian outreach initiative.
The nature of the scheme, which is run by Maarten Stapelberg in the West Cape and Wouter Botha in Limpopo, however raises some serious concerns about its legitimacy. Stapelberg described to Moneyweb that Choice effectively provides a platform for its users:
“My occupation is that of a bond originator,” Stapelberg says. “I have a list of clients. If people need money they contact me for the interim, maybe a week or two weeks, then I contact my clients and tell them what is available and they can partake in providing security.”
In other words, Choice claims to be only connecting people who need money with others willing to offer it, like a peer-to-peer exchange. But this is where what Choice does gets a little blurry, because Stapelberg says that no loans are given, only guarantees.
“You come to me and say you want to partake, and then you become a member of the company,” he explains. “Once you are a member you will receive an email with opportunities that are available that you can take up in your personal capacity.
“When you do that, you will pay over whatever money into the account,” he continues. “That money will lay there dormant until the opportunity has been fulfilled, then you get your payout.
“We are not registered with the Financial Services Board. We are not registered with the National Credit Regulator. I don’t provide loans. I don’t provide bridging finance. I provide a guarantee stating that this client has enough money to pay on this and that date. Upon maturity we receive interest.”
It is not however clear how money that only sits in an account as a guarantee would deserve earning interest. The point of bridging finance is to supply immediate liquidity to people who need it over a very short period. If they don’t actually receive the money, it is therefore unclear why they would see any value in it, particularly given the rates that Choice claims it is able to charge.
“The end user, at the end of the day, who has approached us or his lawyer, will come to an agreement to pay the interest rate that is charged in the bridging market,” says Stapelberg. “That can be anything, depending on the amount, from 5% up until 30% per month.”
Choice’s members will however only ever see a maximum of 15%, because only half of the interest is paid to them. The other half is withheld by Choice, and Stapelberg claims it is used to fund the operations of a Christian organisation called Free Agape Enterprises, of which he is a director.
“We’re involved in ministry work and outreaches,” he told Moneyweb. “And Choice Lifestyle is a division of Agape.”
Apart from the confusing business model, and the fact that it is unregulated, Moneyweb has identified four significant concerns about Choice Lifestyle. The first is that if it is charging interest of 30% per month, that is much higher than what is permitted.
The most recent credit regulations allow companies to charge a maximum interest rate of 5% per month on short-term transactions. Bridging finance would fall under this provision.
These high interest rates are also unlikely to be sustainable. Users of Cambist, which infamously ran a similar platform model, unfortunately know this all too well.
Secondly, bridging finance businesses exist to provide immediate, often same-day liquidity to those who need it. Choice Lifestyle, however, only sends out emails with ‘opportunities’ to its members once a week at best. This makes its supposed business model even more peculiar.
The third issue is the standing of the people behind the company. Moneyweb has established that Stapelberg claims to have a number of academic qualifications that are, at best, unverifiable.
Under the education details on his Facebook page, he claimed to have ‘Ministry, Counsellor, Training’ at University of Florida in 2009. The University of Florida, however, has no record of him, and says it offers no such course. When confronted, Stapelberg also acknowledged that he had never been there.
The reference has since been removed.
Stapelberg’s LinkedIn profile states that he has a Bachelor of Applied Science from “Fort Jones UK”. However, Fort Jones University, which was a purely online operation, closed down in 2015 after it was exposed for being a fake university selling fake degrees. It was also not based in the UK, but in the USA.
In his email signature, Stapelberg claims to have a “Ph.D (Human Science UK)”. When Moneyweb asked him from which university this was obtained, he refused to tell us.
Listen to Stapelberg’s response when Moneyweb confronted him about his qualifications:
Recently, Stapelberg added yet another qualification to his LinkedIn profile. This is a “Bachellor of Sience, Counselling” (sic). He doesn’t however state from which university he graduated, only that it was in South Africa. Moneyweb has however been unable to find any local university that offers such a degree and Stapelberg did not respond to a request for information on where he obtained it.
Finally, Andrew Church, the chairman of the Bridging Finance Association of South Africa (BFASA), told Moneyweb that Choice is not a member of the organisation, and should therefore be treated with extreme caution.
“We have huge problems with people giving the industry a bad reputation,” he said. “I would get my money out of a deal like that as quickly as I could if I were the investor.”
Moneyweb sent a copy of this article to Stapelberg for comment before publication, but he did not respond.