Picture this: You are in the middle of an important project when you get a call from your bank. Since it’s your bank that’s calling you, you are obliged to listen to find out what the voice on the other side has to say. The agent seems to be talking about some insurance policy that appears to be a good deal, but you may not know the fine print. A few days later, you realise that your card account has been charged for the premium amount and you’ve been issued six insurance policies. You call the bank and inform them that you had never agreed to buy the policy — not in writing at least. You had only obliged the bank’s call centre agent over the phone about the insurance policy, and the policies were issued without obtaining your written consent. You refuse to make any premium payments, and the bank continues to levy non-payment fees and other financial charges on your card for non-receipt of insurance premiums.
You tell the bank to immediately cancel the policies and credit the amount debited towards policy premiums as well as non-payment fees and finance charges. The bank cancels the insurance policies, but re-credits only the non-payment fees and finance charges, not the premium amounts for six insurance policies. Their logic – since you did not request for cancellation of the policies within the 15-day “free look” period of the policies, you are not entitled to a refund of the insurance premiums.
This happened for real: If you thought this is an imaginary situation, it is not. This happened for real and is cited in a Reserve Bank of India document. Even after several requests to the bank to reverse the premium amounts, it seemed the request fell on deaf ears and the customer finally approached the banking ombudsman (BO). The ombudsman investigated the matter and found the policies were issued through telemarketing by the bank without obtaining the consent of the complainant in writing. Also, the complainant was not informed (during the conversation or afterwards) about the ‘Free-Look Period’ and its significance in the cancellation of the insurance policy. The RBI document said: “BO observed that the policies were issued in an unfair manner and it was a case of mis-selling and, therefore, not valid. BO ordered the bank to refund the entire amount of premium to the complainant and also to reverse all the financial charges and non-payments fees debited to the card account of the complainant.”
What we can learn: Clearly the bank goofed up in this particular case. As we’ve told you before here, here, here and here, many things can go wrong if you are not careful. It is thus wise to figure out what all can go wrong, so that you can be cautious in advance and avoid having to face an unpleasant situation. This logic seems true even when it comes to dealing with credit cards and banks’ tele-marketing agents.
When you get a call from your bank’s telemarketing agent, we suggest it’s best you hear them out, but don’t give even a verbal consent for any product or service unless you are 100 percent sure. In fact, when the call is regarding insurance policies, its best not to entertain such calls altogether. If you are interested in buying insurance, do your own research, compare policies and premiums across companies on insurance companies’ websites or insurance aggregation portals, and only then buy insurance. Buying insurance over the phone without first reading the fineprint isn’t a wise thing to do.
Also remember to monitor your card account to ensure that the bank does not charge you something you haven’t agreed to. The above mentioned case clearly shows instances like these do happen.
Lastly, if you are in the middle of something and unable to pay attention on the conversation, it’s best to hang up. You can always call them later at a better time. It’s best to talk when you are ready for it.