CAPE TOWN - Cape Town police say the provincial extortion unit will investigate claims in Atlantis.
Over 50 businesses in the Witsand area have received protection fee demands.
Failure to pay often leads to reprisal.
Two people have been shot already and community leaders are urging police to step up their efforts.
A shop owner, who received a letter from the alleged extortionist on 15 March said it was difficult to run a business in the area.
He said the letter demanded that he pay a R1,500 protection fee. The shop owner had one week to pay, but he ignored the notice.
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"A young boy came to my house to deliver the letter. As I was looking at the boy, he then rushed to a car after handing it over. In the letter, it was stated that I must pay a protection fee of R1,500 using the Shop to Shop device," he told eNCA.
"They came to my business for the second time, while I was not present. They demanded money, pointing at my workers. They took everything, including coins. So, we are not safe," he said.
Community leaders in the area have accused the police of failing to investigate these crimes. They claim that without any protection or safety guarantees, they have been left to handle the situations on their own.
Witsand Sanco Chairperson Babalo Mbulwana said: "We as leaders are also not safe; last year we lost our chairperson, and we still don't know who killed him. Our lives are also at risk. It's disappointing that residents trust us more than the police."
Police said they are still looking for those responsible for last week's shooting in the area.
- eNCA's Nobesuthu Hejana reports.