6th December 2023 12:01 pm
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Lawsuit filed against NSFAS, bank account partner

  • NSFAS and partner Tenet Technologies have been issued a lawsuit at the Western Cape High Court.
  • The motion was brought forward by education firm Tertiary Education and Research Network of South Africa, which is registered also under the name “Tenet.”
  • The education firm is seeking damages caused by alleged copyright abuse by NSFAS and Tenet Technologies.

The National Student Financial Aid Scheme (NSFAS) and one of its banking partners, Tenet Technologies, have been issued a lawsuit by an educational firm.

This comes after the rollout of controversial new bank accounts and Mastercard-branded bank cards for the scheme’s beneficiaries, which are nearly a million strong.

A motion of copyright infringement was issued to the Western Cape High Court by the Tertiary Education and Research Network of South Africa, which also goes by the name of Tenet.

The motion, seen by Hypertext but which is now of public record, explains that NSFAS and Tenet Technologies are allegedly involved in the abusive use of the name “Tenet.”

Cape Town’s Tertiary Education and Research Network – a non-proift organisation – says that the name “Tenet” is a registered domain of itself and that Tenet Technologies, the NSFAS banking partner, has been abusing this copyright by operating using the same name and others including “TENET,” “TENET TECHNOLOGIES,” and “TENETECH.”

Tenet – the education institution – is the official South African trade mark owner of the name Tenet, but found that Tenet – the fintech – has been using its registered trade mark in official communications, business dealings and in its logo.

“The First Respondent has been using the marks TENET, TENET TECHNOLOGY and TENET TECHNOLOGY logo along with the domain names tenetech.co.za and tenetnsfas.co.za,” the motion reads.

NSFAS itself also uses these marks as they are a business partner of Tenet Technologies.

The main issue with this, as the motion explains is, “The infringing marks, unlawful company name and abusive domain names are identical or confusingly similar to the [educational institution’s] TENET trade mark. [NSFAS and Tenet Technologies] are using the infringing marks, unlawful company name and abusive domain names in relation to services that are the same as, or similar to, the services for which the Applicant’s TENET trade mark is registered.”

“The misuse of our name and trademark case had significant and detrimental impact on our company,” Guy Halse, executive officer: Trust and Identity at the Tertiary Education and Research Network of South Africa (Tenet), told Hypertext in an email.

“Call volumes have increased by about 300%, and we are dealing with large number of often irate students who mistakenly believe we have something to do with the NSFAS bank account. Even NSFAS’s own staff seem confused, since their walk-in centre in Cape Town is now referring students to our offices,” they continued.

Angry students and beneficiaries of NSFAS are due to the scheme’s handling of the launch of its bank accounts.

Initially, NSFAS enthused that the new bank accounts and cards would provide renewed financial freedom to its beneficiaries. Allow them to purchase things online and use tap-to-pay at the till.

However, after the bank accounts were officially rolled out, beneficiaries began noticing that the banking fees associated with the new bank accounts were much higher than the norm.

NSFAS did not make students aware that the bank accounts would even accrue costs, made worse by the fact that most of the scheme’s beneficiaries are of financially vulnerable backgrounds denoting the very need to be funded by NSFAS in the first place.

Student organisations have reacted negatively to the new bank accounts and their high costs, as well as the hasty implementation of the entire new system, which all beneficiaries have been forced to adopt.

Some, such as the University of Johannesburg Student Representative Council even threatened violence against the banking partners of NSFAS for the perceived botched rollout of the new system.

They, among others, claim that NSFAS rolled out the system without properly engaging with students, institutions and other stakeholders.

As for the copyright infringement motion, since the abusive registrations of Tenet Technologies and the use of the trademark by itself and NSFAS “constitute abusive registrations in terms of section 69 of the Electronic Communications and Transactions Act No. 25 of 2002,” the educational institution is seeking hefty comeuppance.

“The application is simultaneously brought for an order for delivery-up for destruction of all printed matter or materials bearing the infringing marks, as well as for an order directing that an enquiry be held for purposes of determining the amount of any damages or a reasonable royalty to be awarded to the Applicant,” the motion continued. The applicant is the education institution, Tenet.

We have sought comment from NSFAS directly via its official channels about the rollout of its bank account system, as well as their reaction to the suit. The scheme has not responded to any communications from Hypertext as of the time of writing.

Consumer watchdog OUTA has joined the ranks of furious students, claiming that the entire bank account project by NSFAS is simply another “eating” opportunity for connected cadres.

It cited evidence that the NSFAS’ tender for the implementation of the beneficiary bank account system cost taxpayers R1.5 billion. Four relatively new fintech firms won the tenders, including eZaga, Coinvest, Norraco and Tenet Technologies.

These four beat out established banks like Standard Bank and companies like MTN for the contracts. The fact that NSFAS awarded the contract to Tenet Technologies – a company that has been allegedly using a trademark that isn’t its own, speaks volumes about the rollout of the bank accounts.

NSFAS bank accounts are now the only way hundreds of thousands of students can receive their stipends and pay for their studies.

[Image – Photo by Tingey Injury Law Firm on Unsplash]

Luis Monzon

Luis Monzon

Journalist. Covering education, AAA gaming and consumer tech. Reach me at Luis@htxt.co.za.

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