Beware Of Insurance Fraudsters

Have you received a call with an offer on your insurance policy that sounds too good to be true? Steer clear of such over-the-top offers or risk getting duped, advises Jay Sampat.

• Some fraudsters are posing as employees of the insurance regulator IRDA, and luring customers with false promises of a bonus on their existing insurance policy if they buy a new plan.
• IRDA has cautioned buyers against such fraudulent calls by putting up notifications on its website. They have informed customers that the IRDA is just a regulator for the insurance sector and that it does not make calls to individual policyholders.

There is a new set of fraudsters in town. They are posing as employees of the insurance regulator IRDA, and luring customers with false promises of a bonus on their existing insurance policy if they buy a new plan. The IRDA reports that the well-oiled racket has managed to sell an estimated 4000 policies to gullible buyers in the past one year.

The modus operandi of these scamsters is similar to that used in African scams and lottery frauds. Some tell the unsuspecting victims that a big bonus has been declared on their existing policy but to get the money they must buy a new plan directly from the IRDA. Others lure buyers by saying that their policies have been chosen for a bonus payment through a random draw. In the entire scheme, the scamsters seldom meet the victim in person. The whole business is conducted over phone, and once the scam agents gain the confidence of the buyer, they send a courier intermediary to collect the documents from the victim.

My colleague Prerna received such an offer, wherein she was promised a deal by someone posing as an IRDA official. She was told that in order to claim the bonus amount of Rs 75000, she would have to purchase another policy worth Rs 20000 from the company. She fell for the offer and bought the policy. Her eagerness encouraged the fraudster to sell an even bigger policy by announcing that the bonus had been enhanced to Rs 1.5 lakh, the only condition being that she would have to buy another policy of Rs 50000. Initially, Prerna told the person to give her only the original bonus amount of Rs 75000, as she could not afford the policy due to other commitments. The fraudster, however, convinced her to take a loan and repay the same when she received the bonus amount.

By giving into the insurance fraudster Prerna dragged herself into a big mess, as she didn’t get any bonus money and she now had two insurance policies (with an annual premium of Rs 70000) that she didn't need as well as the loan taken to purchase the second policy. When she complained to the insurance company, the customer care department informed her that after the first policy was sold to Prerna, the company had made a welcome call and explained the features of the policy in detail. At that time, she was told that there was no bonus offer. Since the 15-day freelook period was over, the policy could not be cancelled either.

A few days ago, I received a call from a person claiming to be from the insurance company in which I have a policy. The caller said, "I am calling from the customer service department of your insurance company. You are losing money on your ULIPs as the bonus that accrued on them has gone to the agent. You can have it refunded to your account if you link your existing policies with the code we have activated for you. All you have to do is buy a policy from any company through us." As I had heard about such fraudulent calls, I immediately asked them to send me an e-mail stating the details conveyed in the telephonic conversation. I am yet to hear from the caller again.

10 seconds is all that most of us are willing to give a telemarketer. However, if we receive a call from the insurance regulator’s office, we are likely to give the caller a patient hearing. Moreover, if the caller knows your personal details such as your name, phone number, address and the details of the plans that you have bought in the past two-three years, you are likely to fall for the offer.

An outraged IRDA has cautioned buyers against such fraudulent calls by putting up notifications on its website. It has informed customers that the IRDA is just a regulator for the insurance sector. It simply acts as mediator between you and your insurance company, and does not make any such calls. All it can do is direct a company for a certain action or ask the company to follow the guidelines. It never works on individual cases, nor does it send people to collect money from policyholders. Hence, these kinds of calls are purely fraudulent. They are made by those who know which policies you have, in an attempt to see if you fall for their bait. It is in your interest to use common sense before making payments to callers like these.

While the IRDA has written to the CEOs of various life insurance companies separately, urging them to investigate such instances and take action, it is in your best interests to be wary before taking any action the next time you get a call from someone claiming to be from the IRDA.