Durban - Thousands of old age pensioners are falling victim to a “targeted attack” by syndicates making fraudulent deductions from grant beneficiaries’ accounts.
The deductions for non-existent goods and services are leaving some of the country’s most vulnerable people, including families who rely on child support grants, with little money to put food on the table.
Cash Paymaster Services (CPS), contracted by the state to pay out old age pensions, child care and disability grants, said it had launched an internal investigation, but insisted the problem affected less than 27 000 or 0.5% of the 5.4 million South Africa Social Security Agency (Sassa) beneficiaries who buy services on their grant cards.
A 72-year-old Wentworth pensioner has not been able to pay her telephone bill after R300 was deducted from her Sassa account last month.
She asked not to be named for fear of victimisation.
“I was told the money was used to buy airtime and electricity. Not having that money means I may not be able to phone for help if I have an emergency. It was either that or no bread and milk,” said the pensioner.
At her local Sassa office, she was promised the money in her account at the end of this month. However, should this not happen, it will be difficult for her to make ends meet.
“Pensioners… we don’t get much (money), every cent is already budgeted for. Worse I will have to catch up on the bill. So if the money is not in my account, my life will be upside down, it’s really worrying.”
Kaylene Norris, 37, of Wentworth, had to take out a loan to make ends meet after unauthorised deductions left her with R46 to “feed her two children” in November.
“Money was taken off for pre-paid electricity. I live in government flats and we don’t have prepaid electricity, we pay the municipality for electricity,” she said.
She went to the Sassa office in Wentworth and was given an assurance the money would be paid back into her account.
However, in December, R100 was deducted for airtime and R200 for a clothing account she did not have.
Norris, who relies on the R650 in grants she gets for her children, said the deductions continued until January.
“Imagine going to the bank to withdraw money you desperately need by month end and the machine tells you insufficient funds.
“I’m disgusted by whoever these scammers are who are taking money from people who need it so badly. To another person R300 off your account may be nothing, but if you are only getting R650, it counts a lot,” Norris said.
“I have tears in my eyes just thinking of how much my mother does for me, it should not be for my pensioner mother to look after me as a 37-year-old woman.”
Norris said she used to work at a refinery before her contract came to an end, and has been applying for work since.
Norris appears to be the victim of fraud, the kind CPS is investigating. However, many beneficiaries are also being left out of pocket after unwittingly agreeing to deductions in response to marketing by CPS sister companies, as in the case of the 72-year-old.
“Initially deductions were as little as R5 and they went up to R99, which meant a lot of beneficiaries didn’t notice or put them down to banking or admin charges,” said Evashnee Naidu, KZN manager for human rights organisation, Black Sash.
It has been monitoring unauthorised deductions using information gathered by community-based organisations it works with.
Naidu said the trouble began after the re-registration of grant beneficiaries four years ago.
“One of the formalities of re-registration was that every beneficiary got a Grindrod Bank account and money was deposited directly into that. But unscrupulous people found loopholes where they could market to beneficiaries and make deductions off the Sassa account,” said Naidu.
Deductions were for items such as airtime, loans, prepaid water and electricity and even paraffin.
She claims other subsidiaries of Net1 – the parent company of CPS – were using the Sassa database to obtain contact numbers to market to beneficiaries.
But Serge Belamant, chief executive of Net1, has strongly denied this.
He insisted they did not use Sassa’s database for marketing as this was illegal under the CPS contract.
“This has been validated by auditors. We market via branches, SMSes and other media. Our biggest marketing success is simply from word of mouth (beneficiaries).”
He said accusing them of preying on the vulnerable was “unfair”.
“The products we promote are geared to the lifestyle of our customers. We do not promote alcohol, gambling, lotteries, but understand that electricity is key to life, and airtime is key to contact loved ones, hospitals and other emergency services.
“Any beneficiary can cancel or suspend the mobile channel by using the menu or calling our call centre,” said Belamant.
These problems are an “old challenge”, said Sassa KZN spokesman, Vusi Mahaye.
The new payment system afforded social grant recipients a card which allowed deductions, unlike the previous card. Also, for the first time, recipients had to provide their contact numbers. These could be accessed by marketing companies, said Mahaye.
To safeguard Sassa card holders, the legislation allowed only a 10% deduction from a grant and only for a funeral policy. The balance would then be deposited into a beneficiary’s account and they were free to do as they pleased, even authorise deductions.
“We urge people to come forward and report deductions they did not authorise,” said Mahaye.
Belamant said beneficiaries needed to be educated to ensure they understood that financial freedom could be misused if not understood and used responsibly.
“This is not difficult to achieve as we have found that beneficiaries, although not well educated, are able to understand what is in their best interest and are quick to use all opportunities presented to them by the new system.”
Mahaye advised people to go to their nearest Sassa office to report unauthorised deductions. Once they had completed the relevant information, it was sent to their head office for investigation.
“If it is found that the deduction was unlawful, it is stopped and the money reimbursed,” he said.
The CPS said there had been many complaints of unauthorised purchases charged to Sassa account holders.
“It is evident that beneficiaries are being targeted by syndicates and CPS urges beneficiaries to take extra caution in the selection and use of their PIN numbers,” CPS said.
It warned beneficiaries not to use “simplistic PIN numbers”, such as birth dates.