😱 Brazil🇧🇷: investigation into illegal payroll deductions affecting public servants puts pressure not only on banks and payment platforms, but also on government institutions

😱 Brazil🇧🇷: investigation into illegal payroll deductions affecting public servants puts pressure not only on banks and payment platforms, but also on government institutions

Police carried out 50 search and seizure operations as part of an investigation into payroll deductions used to settle interest-free transactions. The case involves Banco de Brasília (BRB), which was responsible for processing payments, the Federal District Ministry of Economy, the Federal District Public Servants’ Social Security Institute (Iprev), PicPay, and the Federal District Public Servants Association.

⏩ The scheme — formally based on a regulation issued on August 8, 2024 — involved the deduction of service fees from the salaries of public employees who chose to receive salary advances. These deductions were processed through PicPay.

⏩ The arrangement is now considered a key factor in assessing risks involving PSPs and partner banks, particularly BRB, due to the combination of elements such as salary flows, government entities, and payroll deductions operating within the same structure.

⏩ Authorities froze nearly 17 361 000 USD held in accounts associated with PicPay and the Federal District Public Servants Association.

⏩ The Ministry of Economy stated that “the investigation focuses on the conduct of public officials rather than institutional actions by the ministry”.

⏩ The suspects face allegations involving crimes against the public economy, misleading advertising in consumer relations, unauthorized insertion and alteration of data in public administration systems, active and passive corruption, criminal organization, and money laundering.

⏩ However, the case remains legally complex. According to the applicable framework, the salary advance structure operates as follows:

🟩 It is a free service provided directly through the application, without intermediaries and without interest charges. Users receive an advance equivalent to the salary amount corresponding to the days already worked during the month, with funds credited immediately to a free card protected by biometric facial identification.

🟩 If users choose to transfer the funds directly to a checking account, the advance is no longer free and becomes subject to a service fee, which is clearly displayed before the transaction is confirmed. The funds are credited automatically and, according to the declared structure, PicPay does not have access to salary information.

🟩 The payment solution is not classified as secured lending or payroll-backed credit and is structured in accordance with the Consumer Protection Code and Central Bank regulations.

⏩ The case has generated interpretations that authorities may be strengthening anti-corruption enforcement measures in a political context ahead of future electoral processes.

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