BREAKTHROUGH: Fifteen people were arrested in George and Oudtshoorn for alleged pension fraud. Picture: Herbert Matimba
Many people living in farm areas and on the Cape Flats live through what they describe as “the tyranny of the loan sharks”.
In the tough economic conditions and with high unemployment in the Western Cape, many complain that they are caught in a Catch-22 situation where they have to borrow money from loan sharks who charge them exorbitantly high interest rates on loans. They says they are caught up in a debt spiral where loans are extended and increased and are never fully paid back.
In many cases, pensioners are trapped in debt cycles described as being “tantamount to blackmail”.
A breakthrough was made at the weekend when a number of people were arrested and found in possession of pension cards.
Social services confirmed that 15 people were arrested in George and Oudtshoorn in what is believed to be cases of fraud relating to the SA Social Security Agency (Sassa).
It said that six of the people were money lenders and caught in possession of about 440 Sassa cards.
The current state pension is R1200 which means the value of those 440 cards could be more than R500000 a month.
Those who were arrested were found to have been linked to misused grants.
Sassa issued a statement warning that there were laws that govern the issuing of social grants. For instance, it said: “The usage of the Sassa card as a guarantee for a loan is in contravention of the Social Assistance act and the National Credit act.”
Although the people, suspected of being money lenders, were arrested, pensioners who hand over their pension cards in exchange for loans are also guilty of offending and Sassa will attempt to trace all those whose cards were found on the suspects.
The pensioners would be issued with warnings, Sassa said. The warning letters will tell guilty pensioners of the legal breach they have committed by taking part in the money lending process and “that should the card be found in the possession of money lenders or any other third party again, the social grant will be cancelled”.
Those who had been arrested in Oudtshoorn were found with large amounts of cash and the identity cards of a number of people.
There are cases where others are allowed to collect monies on behalf of pensioners in terms of Sassa rules.
If a person is too sick or old they can sign a power of attorney to another person; they can make an affidavit at a commissioner of oaths to allow another person to collect the pension. Sassa officials also do home visits to assist with signing a power of attorney form, or a welfare organisation or old age homes can collect pension on behalf of those in their care.