FD turned into policy without nod, insurance company told to pay back Rs 3.5L

Time of India

7 hours ago

Ghaziabad: The District Consumer Dispute Redressal Commission last week ordered an insurance company to refund Rs 3.5 lakh that was taken from a city resident whose fixed deposit for her minor daughter was converted into an insurance policy without consent years ago.
Ritu Garg, the complainant, approached the commission in 2021, alleging that four years ago, an official of AU Small Finance Bank — Rohit Jain — approached her to open a fixed deposit account for her daughter. Garg told the court that she was told the FD would give her 8.5% in returns.
Garg opted to go ahead with the FD and deposited two instalments of Rs 1.17 lakh each in 2018 and 2019.
Instead of creating an FD, the bank allegedly redirected the funds to Future Generali Insurance Company as premium for a life insurance policy.
Garg said she only became aware of this in 2020, when she was informed about the policy by her portfolio manager.
The insurance company argued that Garg's claim was false as she had received policy papers. She did not raise any complaints within the 15-day free-look period after being issued the New Saral Anand policy, the company argued.
The bank also denied responsibility, saying that its employee – Jain – would not have encouraged an account holder to open a fixed deposit.
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It argued that Garg willingly took the insurance policy.
After hearing both sides, the commission -- led by president Praveen Kumar Jain and member RP Singh -- concluded on June 11 that Garg made several attempts in 2020 to have the funds returned.
Despite her letters to the bank, stating the money was directed to an insurance policy without her consent, the bank maintained that the interest rate would be comparable to a fixed deposit.
The insurance company also told the commission that the premium amount was returned to Garg, but it failed to provide documentary proof.
The commission found both the bank and the insurance company guilty of deficiency in services provided to the customer under the Consumer Protection Act.
It directed the insurance company to return the entire amount of Rs 3.5 lakh with 6% interest (from the date of the complaint filed) to Garg.
It also directed the bank and the insurance company to each pay Rs 5,000 as fine to Garg within 45 days of the judgment.