Organisations caring for the elderly fear that data-sharing is taking place between Cash Paymaster Services and a loan company
Paul Kirk
An adviser to the government on pensioners has set up a company that offers loans to the aged at an interest rate that the Mail & Guardian has calculated to be more than 420% a year.
Syd Eckley, a former director of the South African Council for the Aged and a member of the Minister of Social Development’s Advisory Committee on Matters Concerning the Aged, set up Age Secure earlier this year.
Joining Eckley on Age Secure’s board of directors is Sarel Etsebeth, a director of Cash Paymaster Services (CPS), which pays out state pensions in many provinces.
The presence of Etsebeth on the board has caused concern among organisations caring for the elderly. They say they have encountered instances where errors appearing in personal data of pensioners held by both CPS and Age Secure are identical raising fears that data-sharing may be taking place between the two organisations.
Age Secure deducts its fees from social welfare grants before they are paid out to pensioners. The law is ambiguous with regard to this highly controversial practice and NGOs have complained in the past that it seems CPS will only make deductions for certain companies.
The Black Sash has campaigned for some time for deductions from state pensions to be outlawed. It wants pensioners to receive their grants intact a process it believes will eliminate fraud and the exploitation of the elderly.
Mbulelo Musi, spokesperson for Minister of Social Development Zola Skweyiya, expressed great shock on hearing of Eckley’s business. He said the minister was not aware of the activities of either Eckley or Etsebeth but that he would be consulting with Skweyiya at the time of going to press.
Pensioners receive R570 a month and Age Secure will grant loans of up to R500 but only to pensioners who have a funeral policy that can be ceded as security.
NGOs working with the elderly told the M&G that Age Secure’s agents advised pensioners on funeral poli-cies. These agents seem to favour the products of a company called Top Top, which is run by former Inkatha Freedom Party strongman Musa Myeni, who once threatened to unleash 150 000 IFP warriors on Gauteng to deal with troublesome members of the African National Congress. Today he is a wealthy businessman.
Investigations by the M&G have revealed that Myeni is himself a director of Cash Paymaster Services. He became a director at about the same time as Aplitec bought 100% of the shares in CPS. Aplitec is a company that developed smart card technology, which is used to pay out pensions. The major shareholder in Aplitec, with about a 26% stake, is Nedcor.
Henry Spencer, a director of The Association for the Aged, told the M&G he considers Eckley, Etsebeth and Myeni’s positions with CPS and Age Secure to be a potential conflict of interest and views the situation in a serious light.
Spencer says he first became concerned about the scheme when he obtained a copy of Age Secure’s introductory pamphlet. He describes the document as a “typical American sales pitch complete with many ‘and that’s not all’ enticements”.
Among other things the company says it will offer a voucher system for the elderly, enabling them to buy goods at discounted prices. But, Spencer points out, pensioners already receive good discounts from most shops. The company also offers to open Nedbank savings accounts on behalf of pensioners. But Spencer points out that pensioners could simply open accounts for themselves. He says that with a pension of only R570 pensioners are hardly able to participate in savings schemes.
Age Secure has not responded to inquiries made by either the M&G or interest groups working with the elderly.
Ashnie Padarath of the Black Sash Advice Office in Pietermaritzburg says she has written to Age Secure and CPS on a number of occasions trying to obtain information about the company but has received no reply.
The Registrar of Companies could not at the time of going to press provide details of Age Secure’s list of directors. Online search facilities have not as yet processed Age Secure’s registration details. CPS correspondence shown to the M&G cites Etsebeth as a director of Age Secure.
“The Black Sash is appalled that CPS has entered into an agreement with Age Secure to deduct loan repayments from pensions,” says Padarath. “We are unable to comment on the merits of Age Secure’s business operations as attempts to get further information from them since August 1 2001 have been unsuccessful. However, from the information pamphlet faxed to us by Age Secure there appears to be a host of inconsistencies and anomalies that merit further investigation.
“The fact that people who have business interests in Age Secure and Top Top are also directors of CPS casts doubt on the integrity and business ethics of the companies involved. It would seem that there is a coordinated strategy to extract the maximum profit out of pensioners using their already precarious financial situation as bait. Research has shown that most loans are taken for consumptive purposes and that pensioners become locked in a cycle of debt and poverty that is difficult to escape. We call on Skweyiya to put a stop to this practice immediately and to introduce legislation barring any deductions from pensions.”
Spencer praised Skweyiya, who he says seems to be doing sterling work in supporting the elderly.
Eckely’s former organisation has distanced itself from his company. In a press statement faxed to the M&G the Council for the Aged says: “The South African Council for the Aged has no formal association with Age Secure and does not support or endorse any of its products and/or activities. The two organizations are completely separate entities.”
Despite e-mails and phone calls, Eckely, Etsebeth and Myeni did not respond to inquiries.