How to spot and deal with fake insurance agents

A few newspapers, DNA for instance, carried an advertisement by Life Insurance Corporation (LIC) of India yesterday (see here), warning costumers against fake calls from unauthorised people pretending as LIC agents. The ad cautioned against getting cheated by such impersonators. To know more read on.

How this works: There are a number of ways these fraudsters work, here are a few examples.

1. For instance, if you are an existing LIC policyholder, the fraudster gives you a call, and advices you to stop paying premiums towards your existing policy since it’s lapsed due to some reason or they ask you to surrender your policy. They might further tell you, a new policies are being offered to you by the insurers with better terms, and you no longer need to continue with the existing policy. “They lie that a new policy needs to be issued and since with the new policy they get mouthwatering commission in the first year itself, they deceive consumers,“Anuj Bhagia, CMO, Policybazaar.com said.

[caption id=“attachment_693660” align=“alignleft” width=“380”] At times, this fraud goes beyond promising false bonus amounts to entice you to buy a policy. AFP[/caption]

2. Another tactic is that they pretend to be LIC employees and promise huge bonus and elevated returns when you buy a policy for them. Take for instance, thiscomplaint files on an India Consumer Forum website.

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3. At times, this fraud goes beyond promising false bonus amounts to entice you to buy a policy. Here, the agents sell you policies for which you pay premiums. But the premiums are credited to the agents account and the agent gives you fake receipts which look like authentic receipts. While, you think your money is invested in a policy, the agents are ripping you off your money.

This is not an issue which only LIC faces, according to this report published in the_ DNA_ , a few policyholders surrendered or discontinued their ICICI Prudential policy after calls from such fraudsters. At times, the agents tell you that you were cheated by the company and he just thought it was his moral duty to inform you. “Instances when agents from one insurance company bad mouthing another insurance companies been reported in the past,“Bhagia said.

4. According to this report published in the Hindustan Times, on May 12, 2102, a 71-year-old widow form Delhi was conned by a fake agent, who said he was from LIC.

5. In fact, not only LIC’s name but fraudsters are also posing as representative of the watchdog Insurance Regulatory and Development Authority (IRDA). Take for instance, this complaint filed at the Indian Consumer Complaint Forum. Here the victim received a call from a fraudster who posed to be an agent form IRDA. He told the victim that he was entitled to a bonus for a life insurance policy he had with an insurance company. But to realise the cheque, the victim would have to make a an investment first.

What to do: If you get a call from someone claiming an IRDA agent, you can be sure that the caller is a fake agent or fraudster for the simple reason that the regulator does not make such calls. “The general public is hereby informed that the Insurance Regulatory and Development Authority is a regulatory body which does not involve directly or through any representative in sale of any kind of insurance or financial products,” a public notice posted on its website said.It further adds that if you make any kind of transaction with such a fake agent, you would be doing so at your own risk.

Likewise, if you receive calls from an agent claiming to of LIC or any other insurance company for that matter, it’s best to disconnect the call. Instead you should call the insurer’s call centre number mentioned on their website, to get more details. Also keep in mind that if any agent asks you to pay cash, it should be an immediate red flag. According to the LIC’s advertisement, when you buy a LIC policy, you should register the same on their portal for easier management of the policy. Also when agents visits you, you should check their licence, issued by LIC. But, then, we think it isn’t too difficult for fraudsters to make fake licence. So, may be paying a visit to the insurers branch office or buying a policy online via the company’s website or online insurance portal, would work better.