South African students uncover massive grant fraud

Two first-year computer science students at Stellenbosch University, Joel Cedras and Veer Gosai, have uncovered massive fraud in the Social Relief of Distress (SRD) grant administered by the South African Social Security Agency (Sassa).

After the pair discovered that their and their friends’ identities had been stolen to obtain R370 grants in their names, they investigated further.

They found a bank account registered in Cedras’ name that had been receiving a grant every month.

As first reported on GroundUp, fraudsters use unsuspecting citizens’ identity numbers to apply for the SRD grant and receive the funds in bank accounts they have set up using the same ID numbers.

“We had to call some banks, and eventually we found a bank account with my name, and they were receiving my R370 grant every month,” Cedras told Heart FM.

However, the issue extends far beyond a group of university students.

To investigate further, Cedras and Gosai queried Sassa’s application programming interface (API) for February 2005 at a rate of 700 records per minute.

This was already a problem, as it should not be possible to query the agency’s database at such speeds.

The pair found that nearly 75,000 SRD grant applications were made for people born in February 2005. There were around 82,100 births that month, working out to an application rate of about 91%.

“That’s a very high amount that over 90% of people born in that month had an active Sassa application,” said Gosai.

This indicates that not only are fraudulent applications being submitted to Sassa, but many are also likely succeeding.

The students also conducted an on-campus survey of 60 other students they knew. Of the 60 respondents, 58 had active SRD grant applications, of which only two said they had applied for the grant themselves.

Speaking to Heart FM, Sassa grant admission head Brenton van Vrede admitted that the organisation’s grants system had been breached.

“We do, unfortunately, have quite a lot of these cases,” said Van Vrede.

“Some of the criminals have been apprehended. My personal view, though, is that it is at a very low level. We do think there’s a bigger operation behind this.”

He added that Sassa had noticed that three banks in the country were not implementing the Financial Intelligence Centre Act (Fica) correctly, enabling fraudsters to open bank accounts with other citizens’ ID numbers.

Van Vrede explained that many South Africans may find that an active application is already pending under their ID number when they attempt to apply for the SRD grant.

“In such an instance, clients do need to then call our call centre, and then we have a facial biometric system that we use to verify the true person behind the ID number,”

He added that the system is linked to Home Affairs’ facial biometric system.

Recommendations and a request for transparency

Cedras and Gosai believe there is no straightforward solution to the fraud surrounding Sassa grants due to the scale of the crisis.

The pair said Sassa should re-verify every grant application and request additional details to do so. They also recommend that the organisation reimplement its system from scratch.

However, they note that this would leave many recipients out of pocket.

Moreover, Cedras and Gosai believe Sassa’s focus on biometric verification undermines the purpose of the SRD grant, which is designed to be accessible even to people using devices with the lowest specifications.

The pair are demanding answers from Sassa and wants the organisation to disclose the cause and scale of the crisis, as well as who developed and maintains the Sassa SRD system and at what cost.