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Private life insurers join hands to fight phony investment fraud

As Sebi is continuing its probe,six private insurers have formally filed a complaint with EOW.

Written by PTI | New Delhi | Mumbai |
April 24, 2013 2:01:35 pm

Amid a continuing Sebi probe into a phony investment syndicate active in the national capital region,six private life insurers have joined hands to fight the menace of mis-selling of insurance products through spurious calls made by fraudulent agents.

Capital markets regulator Sebi earlier this month unearthed a syndicate of fraudulent gents operating in the

national capital,wherein a large number of people could have been defrauded in the name of mutual fund and insurance products purchased by their deceased family members.

Sebi widened its probe after preliminary investigations,conducted with the assistance of the Economic Offences Wing of Delhi Police,indicated an organized attempt by several people to defraud the gullible investors.

As Sebi is continuing its probe,six private insurers – Reliance Life Insurance,ICICI Prudential,HDFC Life,Birla Sun Life,SBI Life and Aegon Religare – have formally filed a complaint with the Economic Offences Wing (EOW),seeking its help to act against the spurious callers,sources said.

In their complaints with the EOW,the private life insurance companies have sought action against offenders who make spurious calls to customers with false promises on loans or other investment products to dupe them.

Their modus operandi typically involves the customers being asked to surrender their existing insurance policies and shift to some new products for better returns. The agents,in the process,earn hefty commissions or at times dupe the investors of their entire investment values.

When contacted,Reliance Life Insurance confirmed the development and said that the insurance companies have given presentations to EOW about the modus operandi of fake callers. As per their presentations,these fraudsters are operating from make-shift call centres in the Delhi NCR.

The preliminary investigations by the insurers also found that some of these persons were previously associated with insurance companies,directly or indirectly. Typically,these persons use pre-paid mobile numbers or calling cards to contact gullible investors,while some people operate as field staff to collect documents and cheques.

Sensing a large-scale fraud,the insurers and their regulator IRDA have also begun sensitizing the public on the matter though emails and SMSes on a regular basis. According to Reliance Life Insurance CEO Anup Rau,there are strict compliance policy and processes to help identify and act against spurious callers trying to mislead customers.

“We have been regularly alerting our customers through SMS and emails against falling prey to any person or entity making superficial offers of high returns,loans,bonus or gains,” he said.

In a recent public notice,IRDA also warned customers against fake entities calling on behalf of insurers. The country’s biggest insurer,state-run LIC has also warned its customers and the general public about fraudulent agents,through newspapers and other channels.

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