Last week, there was an advertisement placed by the insurance regulator IRDA in newspapers. The ad had an illustration of what looked like the comic character Superman holding up a sign that said ‘BEWARE!!’. The ad carries the following warning, “There are certain fraudulent phone calls by persons claiming to be employees of IRDA, trying to sell insurance policies.” It went on to warn readers that IRDA does not sell insurance and advises them to report the matter to the nearest police station if they got such a phone call. The ad did not ask victims to report the matter either to IRDA or to the insurance company whose products are being sold in this manner.
This ad demonstrates, in no uncertain terms, the level to which the selling of financial products has descended. This isn’t mere mis-selling, as it’s called. It’s outright criminality, involving what amounts to impersonation of a government official. As such, it is a matter that should theoretically be reported to the police. However, I believe that this not just a matter that can be dismissed as concerning no one but the victim and the local police thana.
It’s important to note that the final goal of this criminal activity is to sell a legitimate and regulated financial product, namely insurance. The goal of this criminal impersonation is not to break into your house and rob you at gunpoint, but to conduct a transaction which will add to the business of companies licensed by IRDA to provide insurance to the citizens of India.
Let’s not pretend that asking victims to go to cops is a solution. Every practical-minded Indian can see that only a minuscule proportion (if any) of such phone calls are going to be reported to the police. Either you are going to fall for the story, or you are going to ignore the phone call.
In effect, the advice given in IRDA’s ad will hide the extent to which this ‘sales channel’ is being used by those in the insurance business. I find it nothing short of amazing that the IRDA has no interest in following up (or even having the basic information) of incidents where its own name is being used to conduct fraud.
This column first appeared in the Hindustan Times on February 18, 2011