Moves to secure social grant info
COURT NUDGES GOVERNMENT TO ACT Net1 UEPS allegedly used beneficiaries’ confidential information to cross-sell financial services.
The Supreme Court of Appeal (SCA) ruled last week that it’s up to the social development department – which oversees the SA Social Security Agency’s (Sassa’s) operations – to consider drafting legislation to protect social grant beneficiaries from predatory marketing practices and unlawful deductions.
The controversial seven-year relationship between Sassa and social grant distributor Cash Paymaster Services (CPS) ended on October 1.
Judge Mahomed Navsa’s judgment upheld the SCA’s suggestion during hearings that instead of it making an order “directing the government to make measures, it might suggest to government that it consider taking legislative steps to protect social grants beneficiaries”.
The judgment offers a glimmer of hope to SA’s more than 10 million beneficiaries, some of whom have suffered unlawful deductions from their social grants relating to unsecured loans, funeral cover and prepaid products including airtime and electricity.
Civil rights group the Black Sash has long accused Net1 UEPS, owner and operator of CPS, of profiting from vulnerable beneficiaries by using its other financial-services-related companies – including Moneyline, Manje Mobile, Finbond and SmartLife – to aggressively market unsecured loans and prepaid products.
The company allegedly used beneficiaries’ confidential personal information to cross-sell financial services products.
But Net1 rejected accusations it uses beneficiaries’ personal data for financial gain and engages in unethical lending practices.
Regulations 21 and 26A of the Social Assistance Act allowed one deduction per month not exceeding 10% of the social grant amount, and only if the beneficiary consented to it in writing.
Net1 and other companies successfully fought Sassa over the regulations at the High Court in Pretoria, with acting judge Corrie van der Westhuizen ruling in May 2017, the regulations don’t operate to restrict how beneficiaries use their bank accounts, thus giving Net1 permission to continue making deductions.
Sassa appealed the ruling at the SCA, while the Black Sash and six social grant beneficiaries (represented by the Centre for Legal Applied Studies) applied to intervene as a party in the matter, wanting an order that compels Shabangu to make regulations that protect beneficiaries from the deductions.
The SCA judgment comes as the SA Post Office (Sapo) takes over the payment social grants from CPS, as of October 1.
The SCA judgment notes that the new Sassa-Sapo gold card, which social grant recipients use to withdraw their money at Post Office outlets, retailers and ATMs, doesn’t allow for unauthorised debit and stop orders, which is one mechanism to stop predatory deductions.
The only deductions allowed on the gold card are payments for funeral policies for adult beneficiaries, and the deductions must amount to no more than 10% of the beneficiary’s total grant.
The Black Sash says it’s still unclear how beneficiaries’ confidential data and personal information will be retrieved as Sapo takes over social grant payments.
It wants auditor-general Kimi Makwetu and information regulator chairperson Pansy Tlakula to intervene in ensuring personal information is protected.