The Plight of a Government Teacher: A Case of Forced Mis-Selling by Bank and Insurer

 

Mis-selling is a practice that has been rampant in the financial sector for decades, and the victims of this practice often suffer silently. In this blog, we will shed light on the case of a government teacher who was forcefully sold a life insurance policy in exchange for a loan top-up, and the subsequent troubles he faced while trying to cancel the policy and get a refund of his premium.

The victim, a government teacher, had a salary account with Purvanchal Bank (now Baroda U.P. Bank) and had applied for a loan top-up in November 2017. However, instead of approving the loan top-up, the bank employees asked him to buy a life insurance policy worth ₹50,000 per annum from SBI Life. The victim, unable to afford such a huge premium, resisted the banker's pushy sales tactics, but was told that the loan could only be approved if he opted for the life insurance policy.

Left with no other option, the victim applied for the policy of SBI Life Insurance, and the premium was directly adjusted from the loan amount disbursed to him by the bank. After a few days, he received a verification call from SBI Life, where he categorically told the caller that the policy was forcefully sold to him, and he did not want this policy. The verification caller assured him that the policy would not be processed further and the premium would be refunded back to him.

However, to his shock and surprise, the bankers managed to get the policy issued, and they seemed to be upset with his for giving negative feedback during the pre-issuance verification call. The victim repeatedly requested the bank to help him cancel the policy and get a refund of his premium, but they refused to offer any help to him.

The victim continued to follow up with the bank to get the policy documents issued against the premium deduction and to study the terms and conditions of the policy. However, the bankers categorically refused to provide the policy documents, stating that it was not mandatory to deliver them to the customer, and that they would only be given to the customer after payment of at least three premiums.

The victim started getting reminders and renewal calls from SBI Life, but he informed them that he could not pay such a huge premium every year and wanted a full refund of his premium. However, the insurer refused to refund and asked him to pay for the policy for the entire term of the policy. Even after contacting the head office of the insurer, the victim was told that he would have to deposit at least three premiums before the surrender value could be paid.

This case highlights the unethical and illegal practice of mis-selling in the financial sector, where innocent customers are forced to purchase products, they do not need or cannot afford. It also exposes the lack of transparency and accountability of banks and insurers, who are more interested in selling policies than in providing genuine advice and assistance to their customers.

If you find yourself in a similar situation, it is essential to know your rights as a consumer and to seek legal advice if necessary. The victim in this case has yet to receive a refund of his premium, but we hope that his story will serve as a warning to others and inspire the financial sector to reform its practices and put the interests of customers first.

Disclaimer: The blog is based on the written complaint, supported by evidence submitted by the victim to the bank and insurer. There is no intention to defame anyone named in this blog. The insurers and bankers are also open to resolving such cases. However, we highlight these cases just to make others aware of prevalent unethical practices.