Do not give loan sharks your SASSA card

ATM scams, online fraud and personal information being sold on the dark web are not the only financial crimes plaguing South Africa. South African Social Security Agency (SASSA) spokesperson Paseka Letsatsi says that beneficiaries who have a SASSA card should never hand their cards over to lenders when they want to borrow money. Recipients of government grants, like the elderly, too often fall prey to this illegal practice.

While traditional banks don’t offer loans to people who receive government grants, there are numerous lenders who will lend you money if you’re battling to make ends meet, no matter how low your income. Some operate legally as registered financial service providers, subject to the National Credit Regulator and the Consumer Protection Act, but generally charge the maximum interest rates allowed by law.

But other lenders (mashonisa or loan sharks) operate outside the law and charge whatever interest rates they can intimidate desperate clients into paying. These loan sharks are shady operators who often want to hold onto your SASSA card until you pay off your loan. This can take many months at the illegal, high interest rates they charge, leaving desperate pensioners or unemployed people – who rely on their grants to survive – with no access to their money.

In this interview with SABC News, Letsatsi unpacks the challenges that people reliant on basic-income grants are facing. He says that loan sharks are regularly caught at ATMs with hundreds of SASSA cards in their possession. They move from ATM to ATM, withdrawing grant recipients’ money to ‘service their loan agreements’.

The grim reality of stolen grant money in SA

Several reports in 2022 highlighted the challenge of loan sharks scamming people out of their SASSA money. According to the Cape Argus, SASSA had received 106 reported cases and 109 people had  been arrested since 2012. SASSA’s Fraud Unit manager, Marlon Joubert, said that the arrested parties were not all illegal money lenders. Several were registered financial services providers or local shop and tavern owners. In May 2022, News24 reported that 2 presumed loan sharks were caught in possession of 200 SASSA cards in Sebokeng, and similar cases are reported countrywide on a regular basis.


SASSA urges beneficiaries … not to give their SASSA cards to anyone under any circumstances

According to Joubert, these criminals force SASSA beneficiaries to hand over their identity documents, SASSA cards and PINs. He believes it’s a serious issue, as the numbers reported are only a small fraction of the total number of grant recipients affected.

You can report loan providers who demand your SASSA card as security on a loan to SASSA online or call 0800 701 701.

Avoid becoming a victim of loan sharks

Although SASSA warns that illegal money lenders found in possession of SASSA cards will be arrested, numerous elderly grant recipients still fall prey to loan sharks using these tactics. SASSA urges beneficiaries not to borrow money from loan sharks and not to give their SASSA cards to anyone under any circumstances.

‘The unregistered loan shark business is a big societal issue. This is a problem which does not affect SASSA only, it affects everybody in society,’ says Letsatsi.

So, if you do need a short-term loan, rather look at your cost-effective, tailored personal loan options with a licensed financial services provider and registered credit provider.