A Kerala consumer panel has highlighted issues of misleading marketing practices and unauthorised deductions by insurance agents, prompting a reinvigorated call for transparency and protection for vulnerable consumers.
A Kerala consumer commission has once again underlined how aggressively marketed financial products can cross into unfair trade practice when customers are not told what they are actually buying. In recent months, consumer forums in the state have dealt with similar complaints over unauthorised deductions, missing cover and insurance products sold without clear consent, reinforcing the expectation that banks and insurers must spell out terms plainly and act in good faith.
In the latest case, a 62-year-old man told the commission that two authorised agents of an insurance company approached him in December 2019 with what they described as a “single premium fixed deposit” promising attractive returns. Believing the pitch, he said he handed over Rs 35,000, only to later learn that the sum had been used as the first premium for a policy in his own name. A month later, he alleged, he was persuaded to part with another Rs 1.10 lakh on the assurance that it would be returned with interest within a month, but that money was instead used to buy a policy in his son’s name. The policy papers, he said, arrived only about two months afterwards.
The complaint went further. The man said another Rs 1.10 lakh was later debited from his savings account in January 2021 without his knowledge or consent and treated as the renewal premium for his son’s policy. He told the commission that he had never authorised any standing instruction for such a deduction and that the money had been kept aside for his wife’s cancer treatment. In its July 17 order, the panel said: “Converting ‘single premium FD’ to ‘regular premium policy’ by concealing facts is unfair trade practice.” The commission added that the complainant was a senior citizen whose wife was undergoing cancer treatment, making the loss especially serious.
The commission also noted that the policies were sold as fixed deposits even though they were insurance products with continuing premium obligations, and that the insurer’s agents did not contest the case despite being served. It held the company liable for unfair trade practice and ordered it to refund Rs 1.10 lakh with 9% interest from the date the complaint was filed, while also awarding Rs 30,000 in compensation and Rs 10,000 in litigation costs. Consumer lawyers say cases of this kind often turn on documentary evidence such as policy papers, payment records and correspondence, which can help establish whether a product was misrepresented at the point of sale.
The ruling is a reminder that seniors and other vulnerable consumers should be especially cautious when a high-return “deposit” is linked to insurance paperwork. It also shows the value of challenging suspicious deductions quickly through the insurer, the insurance ombudsman or a consumer forum. Kerala’s consumer helpline is 1800-425-1550, and the National Consumer Helpline can be reached on 1915.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
