WATCH | Elderly duped into funeral cover with offer of free food parcels

The promise was simple: give them your ID number, sign a form and receive a free government food parcel.

But for dozens of elderly South Africans, that promise turned into a costly surprise when money began disappearing from their monthly social grants for funeral policies they insist they never agreed to.

Elderly social grant beneficiaries have told Sowetan they were approached by people claiming to be linked to the South African Social Security Agency (Sassa), asked for their ID numbers and signatures, and later discovered money was being deducted from their grants for funeral cover.

The deductions range from R190 to R240, and the money is taken before the grant reaches the beneficiary’s bank account.

Sassa has confirmed that at least 124 disputes involving policy deductions have been lodged by beneficiaries since July last year.

For 68-year-old Mapula Nobanda from Mdantsane in the Eastern Cape, her encounter with the insurance agents in January appeared harmless. “They took my ID number and promised me a government food parcel, but little did I know I was being tricked into signing up for a funeral policy I didn’t need.

“I signed because I needed the food,” said Nobanda, who now lives in Johannesburg.

At least four deductions of R190 each month were made from her grant, and Sassa in Roodepoort confirmed that 1Life Insurance Limited made the deductions.

Nobanda maintained she never knowingly consented to the policy because she already has funeral cover through Avbob, which she took out more than 20 years ago.

#PayTheGrants activist Israel Nkuna told Sowetan he is helping close to 200 beneficiaries with similar problems in Limpopo.

“I have learnt that between February and March funeral cover agents from Emerald Life and 1Life did a door-to-door campaign in Mahlathi village,” he said.

“I believe it was during this campaign that some senior citizens were made to sign up for life cover under the guise of, or promise of, free groceries and food vouchers.”

The allegations come against the backdrop of a lucrative funeral insurance market linked to social grant beneficiaries.

A presentation by the social development department to parliament in March showed that 30 companies were authorised to deduct premiums directly from grants.

At least R143m was being deducted from 1,2-million beneficiaries. Emerald Life accounted for almost R50m in deductions, while 1Life received R29,1m.

Evashnee Naidu, the KwaZulu-Natal manager of social justice organisation Black Sash, said some insurance companies “use predatory tactics and know how to bypass the system and Sassa’s weaknesses”.

Naidu said insurance companies often submit large volumes of policy applications, making it difficult for Sassa officials to verify every application thoroughly before they are processed.

She said beneficiaries frequently face an uphill battle when attempting to stop deductions.

A Sassa employee at the Roodepoort office, who spoke on condition of anonymity, said staff deal with multiple complaints daily. “It’s a popular scam, and these agents know who to target,” the employee said.

“Victims come to us to cancel the policy, and in most cases the policy is reinstated later because the insurance companies keep the beneficiary’s personal information.”

The employee said the office receives an average of about five complaints a day.

Under Regulation 29 of the Social Assistance Act, beneficiaries must provide consent before deductions can be processed. The regulations require signatures and biometric verification, including facial recognition or fingerprints matched against records held by the home affairs department.

Only one deduction per beneficiary is permitted, and premiums may not exceed 10% of the grant amount.

Sassa spokesperson Andile Tshona said complaints had been recorded across several provinces, with Limpopo and Gauteng reflecting higher numbers because of their larger beneficiary populations.

He said Sassa and the insurance industry were engaging to strengthen controls and oversight measures to prevent practices that may influence beneficiaries through rewards, incentives or similar programmes.

Tshona said the 124 complaints received by the agency were attributed to alleged misrepresentation by certain consultants.

He added that no evidence of collusion between Sassa employees and insurance companies had been identified and that no complaints had been escalated to the Financial Sector Conduct Authority.

1Life Insurance Limited said it has cancelled Nobanda’s policy and that investigations showed that the accepted process was followed when she was on-boarded.

“Our investigation confirmed that the required sales, validation, and policy acceptance processes were completed in line with our compliance requirements,” the company said.

Sowetan

This article has been updated to correct a factual inaccuracy relating to one complainant, Rirhandzu Mthetho, being a 1Life Insurance policyholder.

Furthermore, the original article omitted to include 1Life’s comment denying that Mthetho was their client.

We apologise unreservedly for the omission and the error.