You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App
Join our mailing list to receive top business news every weekday morning.

Black Sash disappointed with High Court ruling

Somewhere in the banking system, this must be stopped – national director, Lynette Maart.

SIKI MGABADELI:  The High Court in Pretoria has found that deductions can be made from the bank accounts of social grant beneficiaries held with Grindrod. Net1 UEPS Technologies, the holding company for Cash Paymaster Services – which administers the payment of social grants – approached the court for a declaratory order regarding the government’s decision to limit direct deductions from beneficiaries’ accounts.

Let’s chat to Lynette Maart, who is national director for Black Sash. Lynette, thanks for your time today. As Black Sash you applied to intervene in the matter. You had made several allegations of illegal deductions, which Net1 said they had comprehensively dealt with in their answering affidavit.

So let’s take a few steps back and talk about why you wanted to intervene in the case, and what your argument was.

LYNETTE MAART:  Okay. You know that in May 2016 government published regulations, particularly Regulation 21 and 26A, one dealing with payment and the other one dealing with funeral policies or funeral deductions.

These regulations – and particularly with the funeral deductions, there was an argument that no deductions should be made for funeral policies from children’s grants … because these amounts were little they supposed they were not meeting the primary needs of children. And so children after 18 will actually get off the grant – and then what happens to these policies? That’s what they need right now.

So in terms of the payment system itself, Section 21 makes reference to electronic transfers to a person’s private bank account. Another is an institutional bank account, and the third one with ordinarily cash payments, but because Sassa is now paying through a bank account in Grindrod Bank, that they were saying of those payments.

So our intervention into these was we were hopeful that these regulations would stand in good stead in the courts because it certainly begins to address the deduction problem. That’s not only deductions in relation to prepaid airtime and electricity, but also deductions for loans, deductions for funeral cover and so on.

So our intervention was primarily to say Net1 and its subsidiaries and allies were asking for their bank accounts not to be restricted. We were saying that if these regulations do not kind of meet the requirements to protect the bank accounts of grant beneficiaries, and to stop these deductions, some of it … and some of it unauthorised, etc, that the minister be given an opportunity to fix these regulations so that it stops the abuse by these companies on the grants from the bank.

SIKI MGABADELI:  What’s your reaction, then, to the judgment today?

Read: High Court affirms Net1 subsidiaries’ right to make deductions

LYNETTE MAART:  Disappointed that we didn’t get there. But it’s not the end of the journey, and … it’s been a very long time …because we believe that the beneficiaries cannot all be complaining about these unlawful deductions and we don’t do anything about it. So if one door closes, we open another door and we continue to work. We are considering our options, even if it’s including going to the Constitutional Court and on, to look at this judgment. But we are talking at the moment. We are also pursuing conversations with shareholders so that we can find a remedy to stop these deductions.

SIKI MGABADELI:  You’ve received complaints, though, from grant recipients. Let’s talk a little about that, because some people may not understand what is really at stake here. What are people’s concerns?

LYNETTE MAART:  I am going to use the case of Matsebane. He’s an 88-year-old. He lives in Gugulethu. Okay, he came to the Black Sash and said: “Look, I have these deductions coming from my bank account but I cannot find who is making these deductions.”

He went to Sassa, he went to Nedbank, he went to FinBank, he moved from place to place, went to the police, everywhere – nobody could help him. So, because the Black Sash serves on the ministerial task team, we took his case to the ministerial task team, which comprises sole proprietary, Black Sash and then also government … and Sassa.

And eventually we asked Sassa to help us to get some bank statements, so that we can see what’s going on in this account. And eventually they discovered somebody in Uitenhage, FinBond, a company related to FinBond, and a loan company there, named [?] Financial Solutions, made deductions from Matsebane’s account.

Now Matsebane is in Gugulethu and these deductions are happening in Uitenhage. He had never been to Uitenhage before. So they asked us to say, look, ask Mr Matsebane to stop the debit order that he had commissioned. And he said but he had never commissioned anything. How is this happening, how is this coming from his bank account?

So eventually through Sassa’s help we got the transfer stopped. It was so low and all they could say was: “Oh, there is one digit wrong.” Now [how can] Mr Matsebane try and navigate this through a system that he doesn’t quite understand. Secondly, nobody in the banking system is taking responsibility for this. And thirdly, there isn’t any recourse mechanism that somebody can walk in, especially if you are illiterate and you don’t quite understand all the rules and dynamics, how do you find recourse?

So somewhere this must be stopped in the banking system. The idea is that there’s a ring fence and a protected bank account, so that people don’t have to worry whether they will have R25 in their account when they are supposed to get R1 500. It’s really worrying.

SIKI MGABADELI:  Certainly. And for people who, as you say, don’t know how to navigate the system. Lynette, we wish you luck and do keep us updated on your efforts. Thank you so much for talking to us. Lynette Maart is national director with Black Sash.

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.


You must be signed in to comment.


mmmm these courts too ai….

If you borrow money or buy goods and services you must pay for these – simple really!

Unfortunately some things have not been explained to the greater populace after 1994, when the congress govment made all its “free” promises, that’s what you called “blinde sambok”

Net-1 has been pilfering like this from social grants for 15 years.

What it comes down to is that there are fees being charged for things that grantees don’t know that they don’t need. They don’t have the education to find out what is going on or manage it and so each month they are being ripped off with no awareness of recourse.

The government doesn’t care because it is coming off the social grant allocation and they will be compensated handsomely with “commission” for the “deal” that has been struck.

Incredibly unethical from a bottom-feeder company that Allan Gray associates with.

End of comments.





Follow us:

Search Articles:Advanced Search
Click a Company: