UIF adds new bank account verification measures to combat TERS fraud

Teboho Maruping. Image credit: Twitter/UIF

The Unemployment Insurance Fund (UIF) has added new bank account verification measures to curb fraud in its temporary employer/employee relief scheme (TERS).

In a statement on Tuesday, UIF Commissioner Teboho Maruping said applicants will now have to insert either the enterprise number (CK/CIPC) or the ID number of the bank account holder in the TERS online portal.

“This requirement, which may seem onerous, is critical to ensure banking details are verified before any TERS payment is authorised. Failure to populate the system properly will unfortunately lead to more delays in the payment process,” he said.

Reports of alleged fraud

In June, reports emerged that around R5.7 million in UIF TERS funds had allegedly been paid to a single individual instead of 200 workers. A labour brokerage firm had made the claim.

The individual, Tshepang Phohole, allegedly channeled the funds to friends, forcing the National Prosecuting Authority (NPA) to obtain a court order freezing 28 bank accounts.

According to court papers, R2.4 million of the funds remain unaccounted for. Five people were arrested and charged with theft, fraud and money laundering.

Employment and Labour Minister Thulas Nxesi also said in June that some companies were not passing on UIF TERS payments to workers. He explained, “It is alleged that there are companies that have not paid the workers what is due to them. We are aware of some companies allegedly loaning employees the money and that is not legal. 

“We are also aware of other companies that are allegedly paying part of the money and not the full amount, as well as companies using the money for something else other than the intended purpose. If all these allegations are true, we appeal to companies to do the right thing still.”

Turnaround time to increase

Maruping said the alleged cases of fraud had prompted the Fund to put in place the validation and verification measures before payments are made.

He said, “We expect this to increase our turnaround time by two days, as the accounts are verified and validated to ensure that fraud at company level is eliminated and reduced as far as possible.

“We cannot overemphasise how important it is for companies to provide correct information that can be validated and verified with the banks so that there are no delays with the payment.”

The Fund said it had paid a total of R29.7 billion to more than 6.7 million workers since April 16. More than 539,000 employers had lodged claims on behalf of their employees, it added.

Be the first to comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.