Unmasking Online Insurance Scams.......by Gurjot Singh Kaler

Mohali: The advent of digital technology has revolutionized the way insurance policies are purchased, renewed, and claimed, offering unparalleled convenience without the need to leave home.

However, this ease of access has a significant downside: a rise in online insurance fraud. Cybercriminals are leveraging technology to deceive unsuspecting individuals, robbing them of their savings and jeopardizing their personal information.

With more consumers relying on digital platforms to purchase and manage insurance, fraudsters are uncovering new methods to exploit these systems.

These cybercriminals craft fake websites, pose as legitimate companies, and deploy advanced tactics to deceive individuals into buying fake policies or revealing sensitive details.

Understanding the mechanics of online insurance scams is crucial to protecting oneself. Below are some of the most common tactics employed by fraudsters:

1. Bogus Insurance Policies

Scammers create counterfeit websites that closely mimic those of genuine insurance providers. They attract customers with irresistible discounts and lower premiums.

However, after receiving payment, they issue fake policy documents, leaving victims to realize their policy is invalid when they attempt to make a claim.

2. Phishing Emails and Phone Scams

Posing as representatives of reputed insurance companies, fraudsters send phishing emails or make convincing phone calls. They claim to offer policy renewals, benefits, or refunds, tricking victims into disclosing personal information or making payments.

3. Fraudulent Policy Renewals

Using leaked customer information, scammers contact individuals whose policies are about to expire. They provide false renewal links or account details, duping victims into transferring funds to unauthorized accounts.

4. Fake Claim Assistance

Some fraudsters pose as agents who promise to fast-track insurance claims in exchange for a fee. Once they collect the money, they vanish without providing any assistance.

5. Social Media Advertisements

Social media platforms are often exploited by scammers to advertise fake insurance plans or entice users with attractive offers. The apparent legitimacy of these ads often leads unsuspecting individuals to fall into their trap.

Scammers often exploit policyholders through fake insurance policies, where fraudulent cover notes or digitally altered documents are issued. Customers, relying heavily on intermediaries and lacking insurance knowledge, struggle to identify these fakes.

Digitalization has made it easier for fraudsters to manipulate original policies. To counter this, verify policies directly with the insurer or, for motor insurance, check details on Parivahan.

Another scam involves premium manipulation, where intermediaries overcharge and pocket the excess. Always ensure the premium amount matches the policy document.

Identity theft is another threat, where fraudsters use stolen identities to create policies, later filing false claims. Remaining cautious with personal data can help prevent such incidents.

Misrepresentation is also common, with agents selling unsuitable policies or overpromising returns, particularly with unit-linked insurance plans (ULIPs). Policyholders should carefully read and verify policy terms with the insurer.

Lastly, unverified online platforms pose risks—always confirm the IRDA license before purchasing policies online.Being alert and identifying potential red flags can protect you from falling victim to online insurance fraud. Here are some key signs to watch out for:

1. Unexpected Offers

Exercise caution if you receive unsolicited calls, emails, or messages on social media promoting insurance policies or renewals. Authentic companies seldom reach out in this manner without prior engagement.

2. Deals That Seem Unrealistic

Be wary of offers that claim to provide unusually low premiums or substantial discounts. Such enticing deals are often bait used by fraudsters to lure unsuspecting individuals.

3. Suspicious Payment Requests

Requests to make payments via unconventional channels, such as UPI, digital wallets, or gift cards, should immediately raise alarm.

4. Insecure Websites

Scam websites often lack proper security measures, such as SSL encryption (indicated by a padlock symbol in the browser's address bar), and may not display valid IRDAI registration information.

5. High-Pressure Tactics

Scammers frequently create a sense of urgency, urging potential victims to act quickly and make payments without taking time to verify the authenticity of the offer.

Protecting yourself from online insurance scams requires vigilance and proactive measures as follows:

1. Verify Authenticity

Confirm the legitimacy of insurance companies and their representatives by checking details on the official IRDAI website and contacting them through verified channels.

2. Avoid Sharing Personal Information

Never share sensitive details like Aadhaar, PAN, or bank account numbers over phone calls, emails, or untrusted websites.

3. Use Official Websites and Apps

Purchase or renew insurance policies only via the verified website or mobile application of the insurance company.

4. Scrutinize Policy Documents

Carefully review policy documents to ensure they align with the promised terms, and check for official logos, policy numbers, and accurate coverage details.

5. Monitor Bank Statements

Regularly check bank and credit card statements for unauthorized transactions, especially those related to insurance payments.

6. Enable Two-Factor Authentication

Activate two-factor authentication for online transactions to enhance security.

7. Educate Yourself and Others

Stay informed about emerging scams and share your knowledge with family and friends to help them avoid falling victim to fraud.

Thus, to avoid falling victim to online life insurance frauds, ensure the authenticity of the insurance company by verifying its registration on the Insurance Regulatory and Development Authority of India (IRDAI) website.

Be cautious with personal information and avoid sharing sensitive details like bank account numbers or Aadhaar over unsolicited calls or emails. Use secure websites with "https://" and a padlock icon when purchasing policies online.

Verify the credentials of insurance agents, ensuring they are registered with IRDAI, and avoid offers that promise unrealistically high returns or very low premiums.Carefully review policy documents, including terms, coverage, and claim procedures, before signing, and clarify any doubts.

Keep records of all transactions, including receipts and communication with the insurer, for future reference.If you suspect fraudulent activity or fall victim, promptly report it to the police and the insurance company to assist in investigations and prevent further fraud.

Before purchasing an insurance plan, thoroughly review the product brochure to understand its features and benefits, which can usually be downloaded from the insurer’s website. Verify that the policy document matches the details explained during purchase, and ensure accuracy in your application form before submission.

Store policy documents securely and inform your family for easy access during emergencies; digital copies are also available online. Immediately report any unauthorized transaction communications via the insurer’s helpline or website.

Keep your contact details updated to stay informed about policy updates and transactions. Always include your policy number when making premium payments, whether online or offline, to ensure a smooth and secure process.

To identify a fake policy, examine the digital signature at the end; any alterations to the original document will invalidate the signature. In insurance, the principle of "caveat emptor," meaning "let the buyer beware," does not apply, as the industry follows "caveat venditor," or "let the seller beware," making the seller responsible for the product's authenticity.

To verify a policy's legitimacy, email the insurance company with the policy details for confirmation. If you encounter a fake policy, promptly report it to the insurer and file a complaint with the police to ensure appropriate action is taken and others are protected from similar frauds.Regularly monitor your bank statements, scrutinize policy documents, and enable two-factor authentication for added security.

Educate yourself and others about the latest scams, and report suspicious activities to authorities such as your local cybercrime cell or through the National Cyber Crime Reporting Portal. The IRDAI also provides a grievance redressal mechanism for policyholders.

Prompt action can help recover losses and prevent others from falling victim. For assistance, visit the Cyber Crime Portal at https://cybercrime.gov.in/, the IRDAI Grievance Cell at https://www.policyholder.gov.in/, or call the Consumer Helpline at 1800-11-4000.

The convenience of digital insurance should not compromise security; staying informed and vigilant is key to preventing online insurance frauds. Remember, if an insurance offer seems too good to be true, it likely is.