It often happens in the insurance market that customers sign the policy documents but have no idea about the terms and promises of the product they are purchasing. Recently, a similar case has come to light in which the court has made it clear that mere signature on paper cannot be considered as the final proof of the customer's will or his consent. In an important decision, the Consumer Court has given strict instructions to the insurance company and ordered it to refund Rs 10.6 lakh to a senior citizen. This decision has given a big relief to millions of insurance policy holders across the country who fall into the trap of false promises and mis-selling by agents or banks. This decision is going to prove to be a big milestone in the cases of insurance companies and financial institutions selling policies by giving wrong information to the customers in order to get higher commission, which has further increased the expectation of transparency in the insurance sector.
This whole controversy started when a senior citizen was induced by the employees of a reputed bank and insurance company to invest money in a lucrative policy in the name of investment. The victim was assured that this was a short-term investment scheme in which he would get much better and better returns than bank deposits. In such cases, agents often show customers a mixed dream of insurance cover and investment which is very difficult for a common man to understand. The victim trusted him and made a huge investment of Rs 10.6 lakh under that scheme. When the policy documents came into the hands of the customer after the stipulated time and he examined them closely, he was shocked. They discovered that the investment plan that was sold as a fixed deposit or short-term high return plan was actually a long-term traditional or unit linked insurance policy whose terms did not exactly match their initial investment objectives. The customer immediately raised his voice against this fraud and asked for his hard-earned money back, but the insurance company rejected his request and said that the customer himself has read and understood all the documents and signed them, hence now the money cannot be refunded. After this, the victim approached the Consumer Forum pleading for justice, where this historic decision came after a long legal battle.
When the matter reached the consumer court, the insurance company repeated its old and tired argument saying that the customer's signature is present on every page of the policy and by law it should be assumed that the customer had agreed to it only after reading all the terms and conditions. But the court completely rejected this argument of the insurance company and while making a very logical comment said that in the modern financial and insurance market, signature cannot be blindly considered as the final proof of consent. The Court acknowledged that in most of the cases, bank employees or insurance agents simply get the customers to sign on blank papers or digital pads by taking them into confidence or ignoring the hidden aspects of the documents. The court emphasized that in cases of mis-selling there is often a severe lack of information and that it has become very common to mislead vulnerable or senior customers. The Court clearly stated that if a financial institution or an insurance company sells a product to a customer contrary to his requirement and gets him to sign it by misleading him into thinking that it is something else, then the paper signature cannot legitimize that fraud. Thus, the court held that this is clearly a case of unfair trade practice, on the basis of which the insurance company cannot escape its responsibility.
In its decision, the court has taken the functioning of the insurance company and the bank to task and has provided relief to the victim senior citizen. The forum has given a strong order to the insurance company to refund the entire principal amount of Rs 10.6 lakh to the investor along with appropriate interest thereon and compensation for mental harassment. This strict stance of the court has created panic among the insurance companies, because thousands of such cases are gathering dust in different courts and consumer commissions across the country. This decision sends a huge legal message that insurance companies and banks can no longer easily shirk responsibility for false and misleading promises made by their agents. After this order of the court, now insurance companies will have to bring more transparency in their sales and distribution network and ensure that the customer has complete and correct information about what he is buying. This decision has become a big shield for many common people and elderly people who often fall into such traps due to lack of financial literacy and lose their entire life capital.
Every person in the country who buys insurance or investment products from a bank or any financial institution should learn a big lesson from this whole matter. While buying insurance, it is very important to read the terms and conditions of the policy yourself instead of blindly trusting what the agent says. Insurance regulatory body IRDAI has given every customer a free-look period of 15 to 30 days after purchasing the policy, during which if the policy does not meet your expectations, you can cancel it without any huge deduction. If you feel that the bank or agent has cheated you and given you the policy by giving you wrong information, then you should immediately complain to the grievance cell of the insurance company. Even after this, if the hearing is not done, then you can seek justice from the Insurance Ombudsman i.e. Insurance Ombudsman or directly in the Consumer Court. In today's digital and modern era, financial awareness is your biggest security shield, therefore, before signing any financial document, it is very important to check and examine every aspect of it thoroughly.