A Kerala consumer forum has ruled against an insurance company for unfair trade practices after its representatives deceptively sold regular insurance policies to a 62-year-old man under the pretense of high-yield fixed deposits, drenching funds set aside for his wife’s cancer treatment.
Penalties And Directives Issued
In a July 17 order, a bench comprising President George Baby and member Nishad Thankappan mandated the insurance provider to refund Rs 1.10 lakh alongside 9 percent interest calculated from the filing date of the case. The tribunal further required the insurer to pay Rs 30,000 in damages for mental strain and financial hardship, along with Rs 10,000 to cover legal expenses.
The commission observed that the company’s representatives declined to contest the allegations despite being served official notices. It concluded that concealing material terms and misrepresenting regular-premium insurance plans as single-premium fixed deposits constituted a clear breach of trade practices.
Deceptive Schemes And Misrepresentation
The matter originated in December 2019 when two authorized insurance agents approached the complainant, offering what was framed as a high-interest, single-premium fixed deposit. The senior citizen, who had minimal knowledge of information technology, handed over Rs 35,000 under that impression. The representative, however, processed the sum as the opening premium for an insurance policy issued in the man’s name.
A month later, the agents persuaded the complainant to invest another Rs 1.10 lakh, claiming the principal and interest would be returned within a month. Instead, the payment was allocated as the initial premium for an insurance policy registered to his son, with physical documents delivered only two months later.
Unauthorized Debits Drained Medical Savings
The dispute worsened in January 2021 when an additional Rs 1.10 lakh was debited from the man’s bank account without his consent or authorization to cover the renewal premium on his son’s policy. The complainant maintained that he had never granted standing instructions for auto-deductions.
According to the complaint filed through advocate K Sreelal, the unauthorized withdrawal caused severe distress because the capital was reserved specifically for his wife’s cancer treatment. The commission accepted that the failure to explain policy terms and the conversion of deposit funds into regular premium commitments inflicted significant emotional and financial harm on the senior citizen.
