\nIt is regularly claimed \u2013 in government, in financial circles and by activists \u2013 that Net 1 leverages the Sassa contract to sell its loans, insurance and other financial products.<\/p>\n
\u201c[CPS] completely undermined and disregarded Sassa’s instructions not to expose beneficiaries to risks,\u201d Sassa CEO Thokozani Magwaza told the high court last year<\/p>\n
\u201cThey saw social grant beneficiaries as easy targets for exploitation and Net 1 developed their whole business model around this, \u2026 developing a bunch of separate entities that use this payment system to exploit grant beneficiaries through the sale of loans, airtime, and electricity.\u201d<\/p>\n
But Belamant said the National Consumer Tribunal and the Competition Commission have both investigated the claims \u201cand properly rejected them as unfounded\u201d.<\/p>\n
He told eNCA this month he would resign from Net 1 \u201cif anyone can come and show me where we are doing things like this\u201d.<\/p>\n
Here\u2019s where and how, Serge<\/strong> \u201cHappy new year to you as well,\u201d Belamant began. \u201cI am not sure which individuals or which companies are \u2018tipping\u2019 you off or their reason for doing so. If these organisations are willing to pay you for conducting this type of investigation, I can only see benefit for us. It is quite obvious that our competitors will claim that we are doing something untoward.\u201d<\/p>\n He seemed to be accusing me of taking bribes to investigate him. This is not true.<\/p>\n He continued: \u201cNo. We do not use any data we have collected for Sassa. This service has nothing to do with Sassa whatsoever.\u201d<\/p>\n He told me to visit a Net 1 branch to see for myself.<\/p>\n I went to Net 1\u2019s \u201cMoneyline\u201d branch in Athlone, Cape Town. Moneyline is the Net 1-owned money lender. The shop is conveniently located a three-minute walk from the nearest Sassa branch.<\/p>\n Its doorway advertises \u201csocial grant cash withdrawals\u201d, \u201cinstant affordable loans\u201d, \u201clife insurance\u201d, \u201cyour green card to financial freedom\u201d and \u201csecure banking for all\u201d.<\/p>\n A long queue of pensioners, mothers and children waited on the baking hot pavement. Everyone I spoke to was desperate for a cash loan. Everyone was a Sassa grant beneficiary.<\/p>\n When I got to the door, it opened a crack. A grim security guard asked me what I wanted. I wanted to apply for a loan and a green card, I said. I couldn\u2019t, he said, because I was not a registered grant beneficiary and did not carry a Sassa card.<\/p>\n Not \u201cfor all\u201d, then.<\/p>\n When Net 1\u2019s subsidiary CPS enrolls beneficiaries on behalf of Sassa, it electronically stores their identity numbers, contact details, fingerprints and other details. These are tied to new Sassa accounts \u2013 where the grant will be paid \u2013 at CPS\u2019s subcontractor bank, Grindrod. The beneficiary is given a Sassa-branded Grindrod card, which stores these details.<\/p>\n The fingerprints serve as a biometric \u201cproof of life\u201d, unlocking the card and the electronic data within, so only the beneficiary can get her money.<\/p>\n If Net 1 used beneficiaries\u2019 fingerprints and Sassa cards to unlock this information, do instant affordability assessments and create standing debit orders \u2013 all in one quick visit \u2013 it could hugely streamline its sales, decrease its costs and outcompete the market.<\/p>\n For example, I visited a traditional microlender in downtown Cape Town. They compete with Moneyline. I told a lady at the sales desk I received a Sassa grant and wanted to borrow cash. She said I had to bring my ID book, proof of address, bank statements and a Sassa certificate to prove my income.<\/p>\n \u201cBut I have my Sassa card and my ID with me,\u201d I lied. \u201cCan\u2019t you just use my card like at Net 1?\u201d<\/p>\n \u201cUnfortunately not sir,\u201d she said.<\/p>\n I emailed Belamant to ask, do you only sell products to grant beneficiaries? \u201cNo,\u201d he said. \u201cWe target the unbanked or under-banked segments.\u201d Three times, he denied exclusively targeting grant beneficiaries.<\/p>\n He also said: \u201cThe Sassa card in this procedure is not required or useful.\u201d For Net 1 to assess if clients could afford a loan, they \u201cmust provide Moneyline with bank statements \u2013 the same as any other micro-lender\u201d. Financial regulations also required them to bring their proof of address, he said.<\/p>\n Confused, I called a Moneyline call centre. A man named Solly answered.<\/p>\n \u201cI would like to apply for a Moneyline loan,\u201d I said. \u201cWhat should I do?\u201d<\/p>\n \u201cYou need to visit your nearest Moneyline branch with your Sassa card and your ID,\u201d said Solly.<\/p>\n \u201cDo I need to bring proof of my address?\u201d I asked.<\/p>\n \u201cNo. Not really. You don\u2019t have to,\u201d he answered.<\/p>\n \u201cAnd do I have to bring my printed bank statements?\u201d<\/p>\n \u201cNo.\u201d<\/p>\n Then I told him I am not actually a Sassa beneficiary. \u201cSo what should I do then?\u201d<\/p>\n \u201cYou won\u2019t qualify for any of our loans. It\u2019s just for Sassa beneficiaries.\u201d<\/p>\n \u201cWhy?\u201d<\/p>\n \u201cBecause we deal with them only,\u201d Solly finished, having contradicted Belamant on every count.<\/p>\n I phoned the call centre a few more times and got the same message from different people. Likewise, call centres for Moneyline\u2019s EasyPay Everywhere \u201cGreen Card\u201d accounts and Net 1\u2019s Smart Life insurance policies assured me they only sold to Sassa beneficiaries.<\/p>\n \u201cBecause we will have to make a debit order from your [Sassa] account,\u201d the Smart Life operator explained.<\/p>\n Competitive advantage<\/strong> For example, it explained how Smart Life\u2019s salespeople used the same Net 1 electronic point-of-sale system that CPS used to enroll and pay Sassa beneficiaries. Moneyline used the same system to sell loans.<\/p>\n The plan stated: \u201cThis device has the ability to verify client information and, through the use of biometric technology, there is no reliance on a physical signature.\u201d<\/p>\n The beneficiaries\u2019 biometric data \u2013 fingerprints stored on the Sassa card and Net 1\u2019s system \u2013 is the same data CPS collected when it enrolled beneficiaries for Sassa.<\/p>\n When a beneficiary applied for a Smart Life policy, the business plan stated, Smart Life read her fingerprint data, taking this as biometric \u201cpermission\u201d to \u201caccess the prospective policyholder\u2019s account information on the smart card\u201d.<\/p>\n Yet the 2012 Sassa-CPS contract forbade this: \u201cThe Contractor [CPS] shall not use Data belonging to Sassa for any purpose other than for the performance of the Services.\u201d That is, for paying grants \u2013 not for selling insurance.<\/p>\n And: \u201c\u2019Data\u2019 means the information (including Biometrics) of Beneficiaries obtained by the Contractor through the execution of the Agreement.\u201d<\/p>\n Smart Life\u2019s business plan stated: \u201cThe use of the Net 1 point-of-sale system and biometric verification of the policy holder will ensure that policies are sold to social grant beneficiaries only.\u201d And, driving the point home: \u201cSmart Life will have a competitive advantage over its peers by utilising existing technologies developed by the Net1 group.\u201d<\/p>\n I wrote back to Belamant and accused him of lying to me and of breaching the Sassa-CPS contract.<\/p>\n \u201cYou are the investigative journalist,\u201d he responded. \u201cI assume therefore that you will make up your mind as to who and why someone is lying to you, if this is indeed the case. Little knowledge can often result in situations that can only be explained through the occult, although once understood the answer is simple enough.\u201d<\/p>\n He finished off: \u201cI think I have assisted you as much as I can. May the truth set you free.\u201d<\/p>\n Getting beneficiary data<\/strong> The salesman said he and two Net 1 colleagues drive to a rural Sassa pay point every month to flog Net 1\u2019s products. The car is branded with CPS, Smart Life, Moneyline and Net 1 logos.<\/p>\n He also said only Sassa beneficiaries could buy Net 1\u2019s products.<\/p>\n \u201cNet 1 has a broad system of getting to the beneficiaries,\u201d he explained. \u201cFor 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.\u201d<\/p>\n He said they insert the Sassa card into the device and the beneficiary provides a fingerprint: \u201cThen it will show the ID number and the name of the person.<\/p>\n \u201cFor 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].\u201d<\/p>\n The funeral policy is slightly different, because the Social Assistance Act allows one funeral insurance deduction every month, capped at 10 percent of the grant value. He said the Net 1 system detected existing debit orders on the account and declined the sale if there was already a funeral policy debit in place.<\/p>\n A Sassa cardholder, who had applied for a Moneyline loan, gave a similar account.<\/p>\n The cardholder showed me the Net 1 printout from his transaction. After he inserted his card and fingerprint, the machine produced a slip that stated: \u201cI hereby authorise Moneyline to access my bank account transaction history for the purposes of approving my loan request.\u201d<\/p>\n The Net 1 insider confirmed, in detail, the accuracy of these accounts.<\/p>\n Yet Net 1 CFO Herman Kotze recently told the Pretoria High Court \u2013 under oath \u2013 that Net 1 and Moneyline \u201cdo not have, and do not seek, access to the beneficiaries\u2019 accounts\u201d.<\/p>\n And this month, Belamant told the Constitutional Court: \u201cI have stated repeatedly under oath, and affirm again, that CPS does not share the beneficiary data that it captures during beneficiary enrolment or receives from Sassa with any third parties \u2013 including Net1 subsidiaries.\u201d<\/p>\n A secret backdoor<\/strong> I asked him to explain himself. He ignored me.<\/p>\n Recall that, from 2012, CPS subcontracted Grindrod Bank to open bank accounts for each Sassa beneficiary, and Grindrod issued the Sassa cards. The broader Net 1 group also enjoys a partnership with Grindrod.<\/p>\n Belamant seemed to be telling me that, through Grindrod, Net 1 had legal backdoor access to beneficiary information.<\/p>\n Net 1\u2019s lawyers laid this out more fully in recent court papers. They said beneficiaries \u201chold these bank accounts in their own names, and have a direct client\/banker relationship with Grindrod. There is no contractual relationship between Sassa and Grindrod Bank, and Sassa does not operate the Grindrod accounts.\u201d<\/p>\n This is a sleight of hand.<\/p>\n The CPS-Sassa contract says CPS can use subcontractors \u2013 Grindrod is a subcontractor \u2013 but it \u201cshall be responsible to ensure that its sub-contractors comply with the terms of this Contract\u201d.<\/p>\n In other words, neither CPS nor Grindrod can share any beneficiary information \u2013 specifically biometrics \u2013 that they gathered while executing the Sassa contract.<\/p>\n I asked the Net 1 insider if other companies could use the Sassa cards and fingerprints to get beneficiaries\u2019 bank account information.<\/p>\n \u201cAbsolutely and emphatically not,\u201d he said. \u201cIt is not technically possible for another party to access the Net 1 backend system where the data is stored.\u201d<\/p>\n What about the data stored on the card? \u201cAlso impossible. Proprietary chip to Net 1. Cannot be read by any other institution.\u201d<\/p>\n Serge\u2019s \u201creal deal!\u201d<\/strong><\/p>\n In a conference call last month, Belamant briefed investors on Net 1\u2019s latest earnings. The earnings call was open to the public, so I listened in.<\/p>\n Telling them about Net 1\u2019s financial products, Belamant said: \u201cThe provision of financial services to beneficiaries was an integral part of that initial tender submission. it was accepted by Sassa.<\/p>\n These are facts that cannot be denied.\u201d<\/p>\n But they can be.<\/p>\n Rewind to August 2012, when Net 1 published its first annual report after winning the Sassa contract five months before. Belamant was upbeat in his opening remarks, writing: \u201cThis award secures our financial security and will add to our war chest.<\/p>\n \u201cI am very optimistic that Net 1 has now entered the reaping stages of the seeds we have sown over the last few years.\u201d He explained that over the next year, Net 1 would focus on integrating its loan and insurance business \u201cinto our national distribution network\u201d. Their national distribution network existed almost entirely of Sassa beneficiaries.<\/p>\n I wrote an article for the Mail & Guardian<\/em>, a month later, explaining how Belamant\u2019s plan appeared to breach CPS\u2019s contract with Sassa. Belamant denied this.<\/p>\n But papers filed in the Pretoria High Court more recently show that Sassa\u2019s CEO at the time, Virginia Petersen, disagreed with him.<\/p>\n Petersen wrote to Belamant, quoting the article and demanding an explanation. She said: \u201cI wish to remind you that the contract that you have signed with Sassa strictly prohibits you from using<\/p>\n Sassa\u2019s data for any business other than to pay social grants.\u201d<\/p>\n Belamant responded with a six-page letter. He defended himself, telling Petersen that \u201caccess to and the provision of financial services is an integral part\u201d of CPS\u2019s 2011 tender.<\/p>\n This, at least, is true.<\/p>\n In any event, Belamant said: \u201cNo information of beneficiaries obtained by CPS through the execution of the contract \u2026 is necessary or utilized to render any financial services to beneficiaries.\u201d<\/p>\n He sent a separate email the same day, including a \u201cpaper\u201d he had written on \u201cfinancial inclusion for all\u201d. This he defined as \u201cthe facilitating of financial \u2018products and services\u2019 to the less advantaged and poorest of the poor.\u201d<\/p>\n Unfortunately, he wrote, banks and other financial institutions were already coining it in the sector and were \u201ctherefore not inclined to upset the applecart\u201d.<\/p>\n He begged for Petersen\u2019s support, saying the CPS tender award \u201claid the groundwork to achieve the real deal!\u201d. Petersen was not impressed. She wrote back: \u201cSassa accepted CPS’s proposal in so far as it responded and relates to the payment of social grants. Sassa is not in a position to allow\/agree and\/or commit to the implementation of your request or proposal on \u2018Financial Inclusion\u2019.\u201d<\/p>\n The letters flowed back and forth, literally for years.<\/p>\n In a January 2013 letter, Petersen accused CPS of breaching its contract with Sassa. She threatened to terminate it \u2013 but did not.<\/p>\n In 2014, Petersen threatened to obtain a court interdict to stop Net 1 from debiting loan, insurance and other payments from beneficiaries\u2019 Sassa accounts. She did not.<\/p>\n Later that year, Sassa tried to review the Sassa-CPS service level agreement to stop the debit orders. That went nowhere.<\/p>\n So, in May 2016, Dlamini tried to rewrite the law instead. She promulgated amendments to the Social Assistance Act which, Sassa argued, banned any debit orders on the Sassa accounts.<\/p>\n Net 1 sued. Piling in with its subsidiaries and subcontractors and a few unrelated companies, Net 1 argued that Dlamini\u2019s new law did not ban debit orders \u2013 and if it did, this was not constitutional. Thousands of pages of court papers were filed at the Pretoria high court. It heard the case in October 2016 but has not ruled yet.<\/p>\n Reaping it<\/strong> Belamant often attributes this phenomenal growth to \u201cword of mouth\u201d marketing, but Net 1\u2019s monopoly over access to the grant beneficiaries\u2019 data appears to have given it a remarkable competitive advantage over traditional microlenders.<\/p>\n For example, the Net 1 insider said Moneyline\u2019s bad debt ratio is close to zero. He said: \u201cI can confidently say Net 1 has the lowest bad debt ratio in the microfinance Industry.\u201d If true, this would mean that nearly all loans extended to grant beneficiaries are repaid in full.<\/p>\n Recall that unlike Net 1\u2019s Moneyline \u2013 which uses a beneficiary\u2019s fingerprint to unlock information stored on the Sassa card \u2013 the competitor I visited in Cape Town required that I produce my ID book, proof of address, bank statements and a Sassa certificate to apply for a loan.<\/p>\n Net 1\u2019s 2008 financial statements reveal the critical difference such information can make to a loan book\u2019s performance.<\/p>\n At the time, Net 1 was contracted to pay social grants in five South African provinces. These beneficiaries used Net 1 cards. It also had two money-lending businesses.<\/p>\n Net 1 described the one business as a \u201ctraditional\u201d microlender which sold short-term, high interest loans to people. The other business sold loans to grant beneficiaries, using Net 1\u2019s cards, much like they do today.<\/p>\n Of its traditional microlender, Net 1 reported: \u201cDespite the fact that we attempt to reduce credit risk by employing credit profiling techniques, the rate of default on loans has been high due to the high credit risk of these borrowers and the difficulty of collecting outstanding repayments.\u201d<\/p>\n Net 1 forecast that about 35 percent of these \u201ctraditional\u201d loans could default, so it set aside funds to cover this.<\/p>\n But lending to social grant beneficiaries was another story. It said: \u201cWe consider [Net 1 card-based] lending less risky than traditional microfinance loans because the grants are distributed to these lenders by us, and these loans are insured.\u201d<\/p>\n It did not set aside any money in case of defaults by grant beneficiaries.<\/p>\n Unsurprisingly, Net 1 sold the traditional microlender a few months later to focus on the second company, which grew to become Moneyline.<\/p>\n A June 2016 affidavit sworn by Grindrod Bank reveals that Moneyline alone accounted for nearly 70 percent of debits against grant beneficiaries\u2019 Grindrod accounts between January and April 2016.<\/p>\n The getaway car<\/strong> The first threat is Dlamini\u2019s attempt to change the law. If she is successful, Net 1 will not be able to debit money from beneficiary accounts to pay for financial products. However, Net 1 has already said this is likely to be fought to the Constitutional Court, which could take years.<\/p>\n The other threat is the expiry of CPS\u2019s Sassa contract. It is due to end on March 31, but Dlamini is pushing to extend it by up to three years.<\/p>\n Other officials are pushing to get rid of CPS as soon as possible \u2013 after no more than one extra year. They want Sassa to pay most grants straight into beneficiaries\u2019 bank accounts \u2013 at whichever banks they choose \u2013 when CPS\u2019s contract ends. Sassa would pay the rest in cash.<\/p>\n If that happens \u2013 and if Sassa stops using the CPS-issued cards \u2013 Moneyline and Smart Life will not be able to use Net 1\u2019s system to easily access 17-million beneficiaries\u2019 information and secure debit orders on their accounts. Net 1 would have to queue, gather client information and load debit orders like any other lender or insurer.<\/p>\n So, Net 1 created its \u201cGreen Card\u201d account \u2013 formally EasyPay Everywhere \u2013 in 2015. The accounts are run by Net 1\u2019s loan business, Moneyline.<\/p>\n Net 1 designed the Green Card so it could herd Sassa beneficiaries onto its books \u2013 out of Sassa\u2019s reach \u2013 before the contract ended or before Sassa account debit orders could be stopped.<\/p>\n One Net 1 advert calls out to \u201cSASSA CARDHOLDERS\u201d. It quotes Dlamini, who once said: \u201cGovernment does not provide any loans to grant beneficiaries through the Sassa card.\u201d Government would \u201cblock and reverse with immediate effect any debit deductions for loans and any other financial service\u201d.<\/p>\n Dlamini was bluffing. While she can block deductions before the grants are paid into beneficiaries\u2019 accounts, she holds no power, yet, to block debit orders from beneficiaries\u2019 Sassa accounts.<\/p>\n The Net 1 advert continued: \u201cShould you wish to have a loan, funeral policy or purchase prepaid airtime or electricity, please get an EasyPay Everywhere account.\u201d<\/p>\n Another Green Card advert claimed, misleadingly: \u201cYour social grant will NOT be stopped if you are an EasyPay Everywhere Green Card holder. Open your account today!\u201d<\/p>\n To find out how it works, I went back to the Net 1 salesman, the Net 1 insider and the Sassa cardholder.<\/p>\n A green card to financial freedom<\/strong> \u201cThe person that does the loans, he will explain to the people that the government has said people are not allowed to have loans with Sassa cards. So, to have a loan, we are going to issue this card, which is EasyPay Everywhere,\u201d he said.<\/p>\n \u201cYou must remember these are the old people. They don\u2019t have to read and do whatever, because they need the money. That is why they took these EasyPay Everywhere cards, and I can tell you they don\u2019t like them.\u201d<\/p>\n He said: \u201cMost of the beneficiaries here have these green cards and it charges R10.50 for each transaction and people are always complaining. If you are on a Sassa card, you get your whole money, but with this card, even if you have finished paying your loan, it will still charge you R10.50.\u201d<\/p>\n But Herman Kotze, Net 1\u2019s CFO, recently told the Pretoria High Court: \u201cThe EasyPay Everywhere account is popular with grant beneficiaries because it is cheaper than the Sassa account.\u201d<\/p>\n That is another sleight of hand.<\/p>\n With the Sassa card, beneficiaries can draw their grant money for free from numerous stores, at Sassa pay points and at CPS. There is no free cash withdrawal option for the EasyPay Everywhere card.<\/p>\n The Net 1 salesman told me how \u2013 with the end of CPS\u2019s contract approaching \u2013 the company put the sales staff under enormous pressure to get people onto Net 1\u2019s books.<\/p>\n \u201cWe got monthly sales targets. They are all huge,\u201d he said. \u201cI think it started at 350 sales a month for the EasyPay cards, and then it goes down to 250. The [Moneyline] loans is 400. The Smart Life was 250 and then goes down to 150.<\/p>\n He said the company focused on changing beneficiaries from Sassa cards to Moneyline\u2019s EasyPay Everywhere accounts: \u201cCause there were some stages where we were told we mustn\u2019t worry about Smart Life. We must focus also helping the loans and the EasyPay cards. They were telling us this will be our future business.\u201d<\/p>\n Late last year, he said, they were all called to a meeting in the nearest capital city. \u201cOur general manager called all the staff. He was very, very angry about us not reaching our target. We told them this thing is very difficult because we are being supervised by Sassa, because Sassa doesn\u2019t like anything concerning this Moneyline stuff. Sassa comes and tells the people not to take the EasyPay card, not to take SmartLife policies.\u201d<\/p>\n Last year, Net 1 switched about one million beneficiaries from their Sassa cards to EasyPay Everywhere accounts, more than doubling the client base.<\/p>\n Getting the grant money away from Sassa<\/strong> The process is described in an \u201cEasyPay Everywhere Enrolment User Guide\u201d that I have seen. The beneficiary provides a fingerprint, after which a message appears: \u201cTransfer authorisation:<\/p>\n Confirm that you have granted permission that your social grant may be transferred to your new EasyPay Everywhere account. Click the \u201cOK\u201d button.\u201d<\/p>\n The Sassa cardholder showed me photographs of the EasyPay Everywhere computer screen during his loan application, while he first set up his EasyPay Everywhere account.<\/p>\n After \u201cOK\u201d was clicked, the salesperson was prompted to scan the cardholder\u2019s \u201cFica documents\u201d.<\/p>\n Fica is the Financial Intelligence Centre Act. When you open a new bank account, the bank must scan your ID book and your proof of address among other documents. This is to help stop fraud.<\/p>\n In January, I asked Belamant: \u201cWhen grant beneficiaries enroll for EasyPay Everywhere accounts, is a full Fica process always performed? For example, are their IDs and proof of address scanned etc?\u201d<\/p>\n \u201cYes,\u201d he said.<\/p>\n That is not true.<\/p>\n The cardholder\u2019s photos showed that in the first Fica step, the computer prompted the Net 1 salesman: \u201cYou are not required to re-scan ID document, as it has been previously scanned.\u201d The Sassa cardholder told me the only time his ID was scanned was when CPS enrolled him with Sassa. \u201cThey must have gotten my ID scan from the Sassa enrolment,\u201d he said.<\/p>\n Next the computer prompted: \u201cDoes the client have a proof of residence document? Click Yes to scan or No to continue.\u201d The salesperson clicked \u201cNo\u201d.<\/p>\n \u201cFica document scanning process successfully completed,\u201d Net 1\u2019s computer concluded.<\/p>\n Every month thereafter, the Net 1 insider said, the entire Sassa grant will be sucked across to the new account as soon as it is paid. Smart Life, Moneyline and other Net 1 debit orders can be applied to the new account, and even if the courts accept Dlamini\u2019s legal amendment banning debits from Sassa accounts, she will not be able to stop them.<\/p>\n Unfounded claims<\/strong> Belamant said: \u201cI point out that both the National Consumer Tribunal and the Competition Commission have been called on to investigate such claims\u201d \u2013 that CPS is sharing beneficiary information with the rest of Net 1 \u2013 \u201cand properly rejected them as unfounded.\u201d<\/p>\n In 2014, the National Credit Regulator claimed that CPS had breached the National Credit Act by sharing beneficiary information with Moneyline, among other complaints. The case was heard by the National Consumer Tribunal.<\/p>\n It found that CPS is not bound by the act and that, in any case, CPS had not shared beneficiary data with Moneyline. It based the latter finding on a KPMG report which \u201cconfirms [Moneyline] does not have access to social grant beneficiary accounts or information in the custody of Grindrod\u201d.<\/p>\n In light of everything I had discovered, I was perplexed to read this. I wrote to Belamant again to ask for the KPMG report. \u201cIf the KPMG report is sound and credible,\u201d I said, \u201cthe easiest way for you to debunk my story would be to share it.\u201d He refused \u2013 three times.<\/p>\n The National Credit Regulator also refused and the tribunal said I had to file a formal Promotion of Access to Information Act request, which I did. I have not heard from it a month later.<\/p>\n A year ago, the Democratic Alliance complained to the Competition Commission. It wrote: \u201cYou are called upon to investigate the unfair advantage of Net 1, Grindrod Bank and all their subsidiaries, who through CPS have direct access to the social development database of between 16 and 19 million clients or beneficiaries. No other bank has this advantage.\u201d<\/p>\n The commission investigated and concluded five months later: \u201cThe issues in the complaint do not raise any competition concerns.\u201d<\/p>\n Grindrod retail head Chris Newland said he would not answer my questions but that the bank would issue a public statement this week.<\/p>\n Belamant insisted that in targeting social grant beneficiaries with financial products, Net 1 is on the side of angels. \u201cYour help and thoughts are always appreciated,\u201d he said in a recent email. \u201cI am sure you are investigating all in the best interest of all people in RSA, poor or rich, individuals or companies, competitors or allies, etc.<\/p>\n \u201cIn a way, we are similar,\u201d he said. \u201cWe strive at equality for all even if this leads to attacks on our vision, credibility or motivation. One, in its belief, must take the good with the bad, as long as one can justify its own actions (sic).\u201d<\/p>\n The social grants system has been taken captive.<\/p>\n","protected":false},"author":2,"featured_media":22360,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-4686","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stories"],"acf":[],"_links":{"self":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/4686","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/comments?post=4686"}],"version-history":[{"count":1,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/4686\/revisions"}],"predecessor-version":[{"id":30666,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/4686\/revisions\/30666"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media\/22360"}],"wp:attachment":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media?parent=4686"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/categories?post=4686"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/tags?post=4686"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nAmaBhungane has long received a stream of tipoffs that Net 1 was breaking the rules. I emailed Belamant in January to ask, is it true that Net 1 uses CPS\u2019s access to social grant data when it sells beneficiaries loans, funeral insurance and the like?<\/p>\n
\nBack at the office, someone slipped me a copy of The Smart Life Insurance Company\u2019s business plan. Smart Life is 100 percent owned by Net 1 and sells insurance to pay for funeral costs when clients die. The plan also thoroughly contradicted Belamant.<\/p>\n
\nIn search of \u201cfreedom\u201d, I spoke to a Net 1 salesman, a Net 1 insider and a Sassa cardholder. They wanted to stay anonymous because they feared retaliation.<\/p>\n
\nIn one email to me, Belamant seemed to defend Net 1 by way of cryptic tipoff. He wrote: \u201cAs a tip, try to understand the differences and the overlap between Sassa data and bank data and then, of course, CPS and non-CPS data.\u201d<\/p>\n
\nBut: \u201cTo achieve this practically and quickly, we require the full commitment of Sassa as we will have to fight the existing institutions that will lose out due to this implementation\/initiative.\u201d<\/p>\n
\nSassa, in turn, laid criminal charges \u2013 then withdrew them.<\/p>\n
\nSince CPS won the Sassa contract in 2012, Net 1\u2019s revenues from its financial services business have grown by a factor of 70. Financial services now comprise about 50 percent of its profits.<\/p>\n
\nBut this lucrative Net 1 revenue stream faces two threats.<\/p>\n
\nThe Net 1 salesman told me how people wanting cash loans will approach his team in the Net 1 car near a grant paypoint.<\/p>\n
\nThe Sassa cardholder confirmed that before he could apply for a loan, the Net 1 staff told him he had to change from a Sassa card to an EasyPay Everywhere card.<\/p>\n
\nThis month, Belamant filed an affidavit to the Constitutional Court, which has to decide how to handle Sassa\u2019s failure to make a plan for the payment of grants after CPS\u2019s contract expires on March 31.<\/p>\n![](\"https:\/\/amabhungane.org\/wp-content\/uploads\/2018\/03\/250x106.jpg\")
<\/a>
\nThe amaBhungane Centre for Investigative Journalism produced this story. Like it? Bean amaB supporter<\/a> and help us domore. Know more? Send us <\/em>a tip-off.<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"