Cape Town - “Sharks in suits” are preying on social grant beneficiaries and looting their bank accounts, Social Development Minister Bathabile Dlamini said on Thursday.
Briefing the media on a departmental probe into complaints by beneficiaries that their accounts were being debited without their authorisation, Dlamini revealed possible “technically legal but immoral” collusion by the company contracted to pay the social grants.
“Since 2012, when the contract to pay social grants was awarded to Cash Paymaster Services (CPS), the rate of debit deductions from grant beneficiaries appeared to increase significantly,” Dlamini said.
The deductions were made from the South African Social Security Agency (Sassa-branded) Grindrod bank accounts into which grants are paid.
CPS is a subsidiary of Net 1 Holdings.
“The team found evidence of other financial institutions that may be linked to Net 1 Holdings, which is a holding company of CPS, that offer financial products including micro-loans to grant beneficiaries,” Dlamini said.
“The deductions associated with these products are then deducted via EFT payment system within the national payment system.”
The lending practices were in contravention of the Social Assistance Act, its regulations and the Sassa Act.
“The legislation allows for the social grants not to be burdened or ceded and allows for one deduction not exceeding 10 percent for funeral insurance only,” Dlamini said.
“Furthermore, the contract compels CPS to protect the confidential information of grant beneficiaries, including biometric data gathered during re-registration in 2012.”
At the same time, Dlamini said the deductions could be “technically legal”, but insisted they were “immoral” as they served to “rob the poor”. - Sapa