Just finished watching a TV serial (real life program I believe) called ‘Crime Patrol’!

One Nationalised bank had opened a bank account – without proper papers, and not remembering the basic Anti Money Laundering lesson 101. The story is very simple, but shocking.

There is a death claim which is fraudulently encashed by a Branch Manager and accountant of a LEADING life insurance company. The amount involved was Rs. 12 lakhs. The insurance branch helps an outsider with all the details necessary to open a bank account. The cheque is then issued to the fraudulent couple and they encash the cheque.

LUCKILY for the victim one of the persons involved was the accountant of the insurance company and the branch manager himself. Luckily because the life insurance company must have bought peace by paying out quietly.

HOWEVER, if the fraud was done by an agent along with the branch manager, the company would have denied it, sacked the branch manager, terminated the agent and …..This would have meant the widow of the victim would not have been paid.

Life is really becoming difficult for the common man to deal with financial institutions. I think I am understanding why we have so few investors and so few policy holders….

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  1. Subraji, Not sure which company you are talking about. Because you wrote “Leading company”, it only gives goosebumps as individuals like me go through the pain of checking claim settlement, term availability, etc etc and finalize a company to buy insurance, only to find out that few bad apples still exist there. The punishment for fraudulent activities is not severe enough. We should have a system such that anyone thinking of doing some fraud, should think twice and eventually not commit.

  2. Sonny,

    i myself do not know which company. This was an episode of Crime Patrol on Sony TV – and they did not reveal the name. However i know it is a private sector life insurance company. Logically it is not LIC. Other than that you can guess as much as I can.

    The worry is if the fraud is done by the agent, the company WILL SURELY NOT PAY…..and the client would have suffered. Here the police inspector was honest – or he would have taken the cut and killed the case!! And the woman who had lost her husband was tough and willing to fight. If it was say Rs. 2 lakhs, she may have lost interest or not had the energy. CAN YOU BELIEVE SHE GOT PAID ONLY Rs. 12 lakhs? If I were her lawyer, I would have sued for Rs. 1 crore damages, mental trauma, stress and settled for Rs. 50 lakhs. Believe me, they would have paid.

  3. Subra,
    The frauds are everywhere in the big institutions. I opened the account of my wife in the largest Pvt. Sector Bank in Chandigarh Branch (in 2004). A friendly employee visited our home, filled the form and next day delivered welcome kit with a cheque book & ATM.
    Two days later I got an SMS from Bank that Rs. 6000 withdrawn from account. I checked with my wife & she denied the transaction. I visited the branch same day to enquire, & the transaction was thru cheque from the branch.
    Since cheque book was safe in our custody it was apparent that the cheque was torn off before the same was delivered. I went to the Branch Manager & he simply washed off his hands & delivered me a lecture on how to safe guard your bank documents.

    Then I did what works best in such situations- Created a Scene in the bank, Asked the bank to call the employees who are involved in opening a/c & threatened to call the police & Local Newspaper. The tone of the manager changed immediately & next day I received Rs. 6000 in to the a/c along with an apology phone call from the bank.It was proved that the employees responsible for a/c opening were doing the fraud.
    Modus Operandi was simple – Before delivering the cheque book they would tear one leaf(some where from the middle). People usually check 1st & last no. of cheque book. Then forge the signature (since they have the specimen) & use some friend to en cash the money. Till the innocent victim knows the matter is subdued.
    I was lucky that I opted for SMS alerts & got the warning in time. I wonder how many people fall victim of such frauds.
    Not to say, I withdrew money the next day & account is closed.

  4. Pramod,

    what you did was right…the alternative is to go higher up in the bank…and of course the regulator RBI. If you had mentioned the word RBI it would have had the same effect.

    And I do not see why you should say ‘leading pvt sector bank’- as a layman you should name it. If I have an email naming the bank, I am happy to carry the name. I will not carry the name when somebody tells me – but does not give it to me in writing…- do not want to be accused of bias.

  5. @Pramod:

    Creating a scene! Was that easy? I was of the opinion that Such banks do have a strong pool of goons too..

    P.S. (MY father is in a public sector bank and the bank sponsors local goons for recovery)..

  6. I must confess to creating a scene, very politely but insisting on a complaint written and duly acknowledged for an inordinate wait to encash a cheque at Indusind.
    Trivial? Sometimes nessecary to remind that they are service providers.

  7. @ Subra: I did not use the RBI name however I did threatened them to go to the ombudsman who incidentally sits in Chandigarh just 4 Kms away from them. But naming higher level people works. I was not able to close one Internet Service A/C (thru which one can buy MF from Bank’s Website) with HDFC Bank for (hold your breath) 1.5 years. Then I went to branch Manager’s office and threatened to write about it to Aditya Puri. Guess what ! Problem solved in 15 Minutes. Thanks Mr. Puri.

    @ Aditya: I did not started beating somebody there 🙂 Shouting about your problem in front of the other customers is enough to scare the bank staff. Especially when it is about a fraud in which you claim their employees are involved. Banks use goons only to send them to your home, they dare not touch a dissatisfied customer in the branch when there are 30-40 people are present all the time.

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