DA to refer illegal SASSA deductions for investigation – Bridget Masango

Party says company and associate bank prey on vulnerable through illegal debit orders and deductions due to bank errors

Illegal SASSA Deductions: DA to refer matter to FSB and NCR for investigation

15 September 2016

The DA has today written to both the Financial Services Board (FSB) and the National Credit Regulator (NCR) to request both entities to investigate the unfair advantage which the electronic payments company Net1, as well as its associate Grindrod Bank and their subsidiaries enjoy in South Africa’s social grant funding structure, at the expense of the poor and vulnerable. 

The entities prey on their database of between 16 and 19 million social grant beneficiaries – possessed only by Net1 and consequently Grindrod Bank – through the social grant distribution company, Cash Paymaster Services (CPS), by issuing beneficiaries loans and supplementary services such as funeral policies they cannot afford, and making them vulnerable to illegal debit orders and deductions due to bank errors.

In February this year, the DA requested that the Competition Commission investigate this matter. However, after assessing the request, the Commission put forward the view that the matter should be referred to the NCR to deal with the aspect of the complaint relating to personal loans, and the FSB to deal with the part relating to funeral policies.

This is a great injustice upon the poor, who already have limited funds to meet their basic needs. It is of utmost importance that this matter is therefore probed by the FSB and the NCR and appropriate action taken.

In addition to the illegal deductions, for more than a year CPS has been issuing “Easy Pay” bank cards (linked to the Grindrod Bank) to social grant beneficiaries. As a result of bank/client confidentiality requirements, the use of these Easy Pay bank cards effectively means that SASSA is no longer able to monitor transactions on these accounts to protect the poor and vulnerable against illegal deductions.

We have thus also submitted parliamentary questions to the Minister of Social Development, Bathabile Dlamini, asking on what grounds her department has allowed CPS to issue Easy Pay bank cards to SASSA beneficiaries, as well as why SARS has approved the linkage of the SASSA cards to a commercial bank as the SASSA account is a mere transmission account.

The DA will not sit idly by while the most vulnerable people in our society are taken advantage of in this manner. The Minister cannot allow it and we are optimistic about the FSB’s and the NCR’s willingness to probe this issue.

Issued by Bridget Masango, DA Shadow Minister of Social Development, 15 September 2016