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Mis-selling By Financial Institutions

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Have you been tricked by the relationship manager of your bank into buying policies that you didn’t need? Are you a victim of insurance fraud? Then this blog is for you!!

Misselling by bank

Let me first break down to you as to why mis-selling continues to prevail

Bank employees have hard sales targets to achieve, which in turn forces them to push products that lead to high commissions. Giving into the natural greed, instead of investing their time in order to understand policies that meet customers’ needs,  they rather push products that yield more incentives for them. Despite regulatory laws, banks continue to mis-sell policies to customers.

Now let’s move on to why is it even mis-selling?

It is a definite case of mis-selling primarily because of two simple reasons- First and foremost, your personal interest or needs were not taken into account while selling you this policy. As previously mentioned,  employees tend to push products with higher commissions than products that are sustainable for the customer as well as meet the primary needs of the customer. Secondly, the customer is not fully aware or informed about the risk that they are enduring, which is why the customer is not able to make an informed decision about his/her/their own money.  As a result of these fraudulent mis-selling cases, the customer ends up losing his/her/their life savings.

Often, we receive cases of bank mis-selling where the customer was lured into buying policies in a fraudulent manner or was issued policies when applying for loans. These are just some examples of bank mis-selling. However, let’s dig deeper and uncover few types of products that are often mis-sold by bank officials-

  • Fixed deposit– Often Elderly and Housewife who visits banks to start FD or renew FD are convinced to buy Insurance Policies promising high returns to them. Since they trust the bank they sometimes blindly sign the proposal form and become victims of mis-selling. Generally, these policies are regular pay and they realize the fraud when they get renewal premium notices. 
  • Bank lockers or loans– Often, customers are forced to buy policies in order to get a locker or loan. There are many cases where the customer is not even aware that he/she/they were sold policies while applying for a loan or a bank locker. It is illegal to force a customer to invest in unnecessary products in order to get a loan or a  locker.
  • Ulip insurance– Banks tend to promote ulip insurance due to higher commissions. However one must not forget that the concept of insurance is to cover risks and not yield returns. Not only is the Ulip insurance premium much higher than term insurance but also the cover it offers is often inadequate as compared to term insurance.
Also Read:  The menace of mis-selling in insurance their types, reasons and how to prevent it

Mis-Selling Solutions from Insurance Samadhan

Insurance Samadhan, a tech-based platform driven to derive solutions for any insurance-related issue that include lapsed insurance policy, assistance in case settlement, claim recovery in case of insurance fraud, assistance to NRI’s in servicing their policies, and much more.

We begin by understanding your case then we find solutions to any insurance-related issue, i.e. mis-selling. Our experts help you in filing your case at the company grievance cell, IRDA, Ombudsman, and consumer court as needed.

Our user-friendly tech platform works on bringing justice to your insurance-related issues and with much pride, we say that we already have a family of over 14000 happy customers. You can raise your insurance complaint here

Pragya Arora

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