War declared on loan sharks

MASHONISAS’ or loan sharks’ days of illegally holding Sassa cards and identity documents as collateral are over as the National Credit Regulator declares war on the unlawful users of pensioner’s cards.

“Mashonisa” is a derogatory name given to people within the community who provide financial services, charging exorbitant self-set interest rates for repayment.

Many mashonisas have, since the rollout of Sassa cards, taken it upon themselves to use pensioners’ Sassa cards as collateral.

The repayment of the loan is then withdrawn from the Sassa card every month by the mashonisa until the debt is paid off. This often includes the ever-increasing self-set interest rate, which at times prolongs the repayment periods of the initial loan.

The National Credit Regulator (NCR) has reiterated that it has declared war on this unlawful practice.

“Retaining these cards is a contravention of the National Credit Act (NCA) and it is a criminal offence,” says Jacqueline Peters, Manager of the Investigations and Enforcements Department of the National Credit Regulator.

“The exploitation of vulnerable and unsuspecting consumers by credit providers will not be tolerated,” added Peters.

She said: “We urge consumers who have handed [over] their ID books and pension cards to go to the Nigel police station to collect their instruments.”

In closing she cautioned consumers to avoid credit providers who required them to hand over their ID books or cards, as it is a criminal offence and is usually coupled with reckless lending and overcharging.

This comes after a massive bust in Nigel early on Tuesday morning (August 1), where 11 people were arrested in possession of thousands of bank and Sassa cards. Criminal cases have been opened and the suspects will appear in court this week.

This was part of a joint operation by the South African Police Service (SAPS), South African Social Security Agency (Sassa) and the National

Credit Regulator (NCR), who joined forces in an operation aimed at curbing fraud, money laundering and the illegal retention of Sassa cards to enforce credit agreements.

The operation focused on persons making withdrawals from ATMS in the Nigel area in the early hours of the morning, just after Sassa grant recipients’ monies were deposited in their accounts.

NCR spokesperson Lebogang Selibi said the focus of this kind of operation was primarily to identify credit providers who were unlawfully retaining the pension cards, bank cards, identity documents and personal identity numbers (PIN) of their clients as surety.

She said NCR’s partnership with Sassa and the police was part of the NCR’s ongoing strategy to root out predatory lending practices and to ensure that all credit providers, no matter where they conduct business, comply with the provisions of the NCA.

Selibi said operations of this nature have been, and would be, conducted regularly in and around Gauteng.

“We unfortunately cannot disclose when the next operation will be for obvious reasons.”

She said the cards retained after the bust in Nigel would be used as evidence and the card owners were advised to apply for new cards.

She condemned the use of people’s cards by mashonisas and confirmed Peters’ statement that it was a criminal offence.

The people found guilty would be liable for a fine or imprisoned, depending on the verdict.

This comes after a stern warning by Sassa that no person – unless given special permission as the procurator, by SASSA – was allowed to have or draw someone else’s pension.

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