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Whether it is banking, insurance or real estate, it is easy to be taken for a ride. Find out how you can protect your rights.

Investor should not only be aware of the financial rights, but also act upon whenever necessary.

Imagine being sold a singlepremiuminsurance plan only to realise that it is a regular premium policy. If the 15-day free-look period has expired, there is very little you can do. You could curse your luck, rant at the agent, quietly swallow the deceit if he is a relative or friend and write off the loss. Or you could stop paying the premiums, let thepolicylapse or surrender it to salvage whatever you can of the premium already paid. Or you could fight for your rights like Sujeet Singh did.

Singh was mis-sold a policy with an annual premium of Rs 20,000 as a single premium plan that would yield over Rs 50,000 after five years. When he realised he had been mis-sold the policy, he first approached thelife insurancecompany to cancel the policy and refund the premium. The company refused. Its contention was that the policy had been issued on the basis of a proposal form signed by the policyholder. Moreover, he sought a cancellation more than two months after the policy bond had been delivered.

Most victims ofinsurancemis-selling dont go beyond this. But Singh did not take matters lying down. He escalated the matter to the insurance ombudsman office, which passed an order in his favour, directing the insurer to cancel the policy bond and refund the premium. The ombudsman indicated the delay ought to be condoned as agents are known to keep customers engaged for around two months, to prevent them from seeking timely redressal.

Some verdicts pronounced by grievance redressal authorities are giving consumers hope and reasons to fight for their rights.

Amongst deliberate mis-selling of policies, the most common malpractice is to sell a policy with a hefty premium, representing it as a one-time payment, when in reality it is to be paid annually. Very often the policy is sent late, claims consumer activist Jehangir Gai. Irdais data corroborate this statement. Unfair business practices, primarily mis-selling, makes up the highest proportion of life insurance complaints filed.

The number of awards given bybankingombudsman has increased, but still remains low

Figures in % indicate percentage to maintainable complaints. Source: Annual Banking Ombudsman report 2017-18

Proportion of not-entertainable complaints high in the insurance sector

Source: Insurance Ombudsman Annual Report 2017-18

Mis-selling weighs heavy in life insurance complaints

Claims prime culprit in general insurance complaints

As a buyer, go through the policy documents during the free-look period to ensure that the offerings match what the agent promised. Follow up with the insurance company directly if the agent delays the documents. Avoid telephonic communication. If a policy is delayed, let it be recorded through a letter or e-mail. When the policy is received, make a note of the date of receipt and retain the envelope, advises Gai. In case of any discrepancy, inform the insurer in writing about the same as well as your intention to cancel the policy, and retain the proof.

Complainant: Biman Krishna Bose, the insurers customer

The case: The complainants grouse was the insurer had declined renewal on same terms, effectively ruling out coverage to ailments contracted during the policy term.

The SC made it clear that a renewal of an insurance policy means repetition of the original policy. A new contract will have to offer same conditions as the original.

While life insurance policies are often sold and bought as investment plans, securing the finances of a deceased policyholders family remains its core function. Therefore, a claim repudiation hits harder than mis-selling. Take Jaggo Devis case. According to the case synopsis on the ECOI website, her late husband had purchased two policies with a sum assured of Rs 1 lakh each from LIC. The claim was, however, rejected on the grounds that her husband was paralysed before the date of proposal and the fact was suppressed. Jaggo Devi, on the other hand, argued that the insurer had medically examined her husband before accepting the proposal and he was healthy.

Redressal authority Allahabad High Court Year: 2014

The case: 72-year-old Kapoor alleged that he was mis-sold a Ulip, which resulted in his investment of Rs 50,000 shrinking to a paltry Rs 248 in fi ve years

The Allahabad High Court held SBI Life responsible for the mis-selling and the company had to refund Rs 50,000 to Kapoor.

Lesson for consumers:Do not condone mis-selling by bank distributors or agents by writing off your loss. Fight the good fi ght to get your dues.

The insurer relied on its investigations and declared his ailment to be pre-existing. Upon review of documents, however, the ombudsman concluded that all certificates issued by hospitals were dated after his death and failed to prove the deceased was paralysed prior to the proposal date. The ombudsman rejected the allegation of preexisting disease and directed the insurer to pay the claim. The onus of proof is on the party making the allegation. When the insurer alleges a disease is pre-existing, documentary evidence must be produced to refute the claim. Bald allegations are not permissible, says Gai.

Claim repudiations or partial settlements are more common in health policies than life since they pay for medical expenses of a recurring nature. Every claim goes through scrutiny in health insurance and dissatisfaction levels are high. Repudiation on grounds of pre-existing diseases being excluded from coverage is among the most common causes of disputes.

After purchasing a policy in November 2016, Bhuwan Chandra Joshi was diagnosed with a heart ailment in February 2017. He was admitted to a hospital for further investigations and procedure. The insurer, Star Health Insurance, however, rejected the claim on the grounds that it was a pre-existing ailment and the claim was not payable until 48 months of continuous coverage had elapsed. The insurance ombudsman pronounced a verdict in favour of Joshi, as the insurer could not submit evidence to prove the disease was pre-existing.

The moot point was not whether the insured had this problem prior to proposal or not but whether he was aware of this problem prior to proposal and whether he had consciously concealed facts from the company. In absence of any evidence, the insurance company was directed to make payment of admissible claim amount, says the report. It is important to disclose all health conditions at the time of buying a policy, but a company cannot deny a claim if you were unaware of the illness.

Customers are often left in the lurch in case of fraudulent card or electronic transactions if their banks take the stance that the formers negligence led to the fraud. Since 2017, the RBI has taken several steps to safeguard interest of banking as well as electronic prepaid instruments customers. The Banking Ombudsman annual report 2017-18 lists several cases where customers have emerged winners after hearings.

One such case relates to fraudulent online transfer of Rs 1.5 lakh through 60 transactions when the card was in the complainants possession and OTPs had not been shared. Despite this, the bank alleged the complainant had shared card credentials, she was negligent and therefore, no liability could be pinned on it. During investigations, the banking ombudsman scrutinised the SMS delivery log and account statement of the complainant and observed that the bank had not carried out velocity check and transaction pattern monitoring as required by RBI rules.

Given that the complainant had never used the card for bulk transactions in the past, the bank failed to detect the unusual patterns. The banking ombudsman then advised the bank to refund the disputed amount to the complainant. Even though the bank failed in its duty to monitor the transactions, it still wanted the customer to bear the loss. So it was held negligent, says Gai.

To ensure that the onus of any fraud lies with the bank, inform the bank of any unauthorised transaction you notice within three working days. If you report a dubious transaction after three working days and within seven working days, your liability will be capped at Rs 25,000. After seven days, its up to the bank to determine your liability. As customers we must know what checks and balances are available in the system and in case there are any lapses and loopholes on the part of the bank in adhering to them, one must take up the issue or escalate it at the earliest, says Ateev Mathur, Partner, SN Gupta and Associates, a law firm. Do not assume you have to write off your loss. Recourse is available thanks to RBI rules. If your bank does not perform its duty in spotting frauds, it is a ground for complaint.

You can approach the banking ombudsman in such cases, but ensure that you file a complaint with your bank first. The complaint has to be made to the BO within a year from the date of reply from the bank or if no reply is received within a period of one year and one month from the date of representation to the bank. The customer cannot make a complaint if the subject matter of the complaint is pending for disposal or has been dealt with at any other forum like court of law or consumer court etc, says Anand Aras, CEO, Banking Codes and Standards Board of India (BCSBI).

Often, its the relationship managers at banks who sell unsuitable policies, disregarding age, goals and risk profile. Though the banking ombudsman puts proportion of mis-selling complaints at just 0.5% of total grievances, the menace is rampant. Besides, it is also likely that such complaints have been filed under non-adherence to fair practices code and BCSBI code, which cover sale of unsuitable products.

In one such instance recorded by the BO annual report, the complainant, who wanted to park proceeds from sale of land in fixed deposits, was sold a life policy. He had no regular income, but the policy carried an annual premium of Rs 99,000. The bank refused to cancel the policy within the freelook period claiming it had no authority to refund the amount as it was the insurers product. The ombudsman ruled in favour of the complainant, noting that the bank had not examined the feasibility of the transaction.

Besides, the application form, too, wrongly mentioned that the complainant was employed, which was not the case. The bank was asked to refund the premium along with interest applicable to deposits of more than a year from the date of selling the policy till the date of refund and `10,000 as compensation for loss of time, harassment and expenses. When a person opts out during the free look period, the bank is duty-bound to cancel the policy. Moreover, if an unsuitable policy is sold, it clearly indicates deliberate mis-selling, says Gai.

You may also read:Banking, insurance, RERA: How to complain to financial ombudsmen

Until theReal EstateRegulation and Development Act (RERA) came into being in 2017, homebuyers had no recourse for grievances against builders. They had to approach consumer courts. With a clutch of states implementing RERA, it is expected that redress will be faster, though gaps remain.

Homebuyers short-changed by builders can look up to recent cases that have been adjudicated. In a case of delayed possession and misrepresentation in Mumbai, Wadhwa Developers was asked to compensate Ketan Kataria, a homebuyer. The builder failed to give possession by the promised date. The MahaRERA allowed the complainant to withdraw from the project and directed the company to refund Rs 1.9 crore with interest, and pay a compensation of Rs 2 lakh for misrepresentation on access to amenities offered.

The case: Delay in construction and possession

The SC penalised the builder Unitech- which was directed to pay 14 % interest on over Rs 16 crore invested by 39 homebuyers.

Lesson for consumers:The judgment and RERA redressal actions offer hope to homebuyers exasperated with unending delays and tall promises. Knock on the doors of RERA and the courts if your developer falters.

You can also approach a consumer court. In a recent case adjudicated by the National Disputes Redressal Commission, developer Orris Infrastructure was directed to not only refund the principal of Rs 1.15 crore, but also pay interest of 12% per annum and foot the buyers litigation bill of Rs 25,000. Consumer fora are the best choice. This is because even though they are over-burdened and more time consuming, they are more consumer oriented, says Gai.

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