Grant provider used private information to sell additional products: report

Net 1 used its subsidiary Cash Paymaster Services’ (CPS) social grant contract to obtain grant beneficiaries’ information and make billions selling loans, insurance and other financial products to South Africa’s poorest according to a new amaBhungane report.

The investigative body noted that the contract signed by Sassa and CPS, Net 1 specifically forbid them from using grant beneficiaries’ information for anything other than paying grants.

AmaBhungane reported that other companies within the Net 1 group used the Sassa cards and beneficiary data to access the grant beneficiaries’ Grindrod bank account history and their social grant details.

“This gives Net 1 an information edge over its peers when it lends money or sells insurance and other products, because it can sign up customers with no paperwork and almost zero risk of bad loans.”

Worse still, Net 1 is responsible for most of the R550-million that comes off beneficiaries’ bank accounts for financial services every month, court papers show.

“Net 1 has a broad system of getting to the beneficiaries,” he explained. “For both the [Moneyline] loans and the Smart Life [funeral insurance], we are using a Bio 930 [a Net 1 point of sale device with a fingerprint sensor] where we have to put the beneficiary card, and it has all the information of the beneficiary, said a Net 1 salesman speaking to the investigators.

“For the loan, it shows from this machine, how much is he getting. The minute he puts the card and then he has to put his finger, the machine draws a slip which shows how much a person is earning [in social grant income].”

Net 1’s executive chairman Serge Belamant has repeatedly denied similar claims under oath and the company has subsequently argued that it provides a valuable service to beneficiaries who are not served by banks.

Read: Sign a new grants deal now, or else we won’t be able to pay: CPS CEO

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Grant provider used private information to sell additional products: report