Force Selling combined with other financial products

POSTED BY manish ON February 20, 2010 COMMENTS (93)

Can some one force you to buy ULIPs when you take a loan from the bank? I am seeing very unethical things going on in financial world these days in India. Lot’s of people are complaining that many companies are selling junk things like Endowment plans or ULIPs (which make big commissions) along with big loans or something big where a small ULIP might look like “Ok, let’s take this small thing for that big thing”. But this is not right! This is breaking the faith and such practices are against the principal of  utmost good faith!             Let’s see some real life cases:

Force Selling along with Loan Approval

I had to take this policy without knowing any details about this, as the Barclays finance company said this is mandatory for approving any loan , not sure how far it is correct. But as I was running out of time, i opted for it.

Force Selling along with Locker Facility

I requested for a locker in ICICI Bank in Hydderabad, VIdyanagar Branch, and they said there is lot of people in queue for lockers so they cant give me. But if I invbest in ULIP or make a FD of 5-10 Lakhs he said they will consider my Locker request on priority. This is forced selling and I told them straightaway that making investments for a locker is ridiculous reason and stayed away. I wish I could complain this to somebody but there is no written proof of they asking for investing in ULIP as it was verbal conversation.

Force Selling along with Home Loan

I thought banks like SBI would be straight in their clauses. I had a difficult experience recently with my loan.

 

Pre-Processing Blues:

The loan agent who works in my office, did not have any clue on the terms and conditions on loan. He was a retired officer from SBI and used his position to leverage the file movement. One fine day, he asked for payment against the services rendered (It was a shock to me). I guess, he would be getting some service fee on my loan from Bank already. I gave some required papers for gaurantor to him which was not in my file. I think he lost them. I reduced my loan amount during processing, for which I had submitted the request letter. Upon my loan approval, I noticed that there is a 1.9 Lakh additional loan sanctioned for me and added to the loan amount. I had declined the insurnace cover for the loan as I had planned to cover it on yoy basis. I discussed this with the manager and he agreed to waive it.

Next, the gauranor must be present when you go to sign the papers. I managed to get the gaurantor to accompany me during early morning hours.

Forcibly Selling SBI-Insurance with the Loan

I saw that Insurance cover has not been removed and the SBI person would not agree to waive it even when i told that i would buy SBI insurance policy. I was told that I need to go to branch where I applied for loan and get the approval from bank manager and then it will again go for approval in the loan processing center. After a lot of persuation with the sanctioning office and Chief manager, I managed to convince for a year on year insurance cover which I had to buy for this year on the spot.

Further, I was told that my this year loan is fixed for 8% ( I was happy that I was wise in choosing SBI) then I was updated that my loan is fixed at 9.75% for next 4 years. No one had told us this clause until we went for signing. We had asked this question from clerk to Manager level. No one had a clarity on it but the clause was there in the documents and I had no option but to sign it. In the recessionary situations, I understand that the rates will look further south but I will be stuck at 9.75 for next 4 years.

Otherwise, I am kind of satisfied with the pace and professionalism of officers but I feel that more transparency in the terms and condition is must.

Moral of the story: Read all the clauses before you go to sign and do not be satisfied if you do not get an answer. Private or Public banks – every one has clauses in fine prints that suits the bank and there is no one to tell you about them.

Link to original comment

Force selling along with Opening NRE Account

About a year ago, a 70-year-old non-resident Indian (NRI) woman went to one of the largest private sector banks in the country to open a non-resident external (NRE) account. While opening the account, an executive from the bank lured the lady into buying a co-branded insurance product under the pretext of ‘mandatory’ rules. He also told her that she will have to pay the amount of Rs10 lakh only once. With no option left for opening the account, the lady obliged and left for her overseas home.

“When that lady returned after 12 months, she was asked to pay one more premium for the insurance plan. Since the bank would not return the money which she had paid for the first premium, she was again forced to pay the second instalment for the insurance policy that was forced upon her,” revealed an independent financial advisor (IFA). Read full article

Another Case of force selling along with transfer of loan

I also also seen a case where one guy wanted to transfer his Home loan (ICICI Bank)  from Pune to Delhi and just for this , he was being forced to buy an ULIP from the officials who would be helping him in the paper work , other wise his work was stuck . At last when he approched Delhi branch , his work was done smoothly . So in this case the officials were forcing the unsuitable product.

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How to Complain for the Force Selling

To tackle such increasing fraudulent cases, the Reserve Bank of India (RBI) introduced a banking ombudsman scheme under Section 35 (A) of the Banking Regulation Act, 1949. The Act is in effect from 1995. A customer can register a complaint with an ombudsman if no reply is received from the bank within one month or if the bank rejects the complaint, or if the customer is not satisfied with the reply given by the bank. If a complaint is not settled within one month, the banking ombudsman may pass an award up to Rs10 lakh or to the extent of the losses suffered by the customer up to Rs10 lakh, whichever amount is lower. Between the years 2002-06, the banking ombudsman has settled around 36,000 complaints.

Conclusion

This is nothing but a form of corruption happening in Financial world these days. Sellers are thinking that loans are critical things for everyone and in order to let them happen smooth they can force people by miss-selling them, they feel like people in India are anyways frustrated with other things, what will they do? They will enquire a bit and then finally they will lose the patience and just buy the products and that happens. But please don’t let this happen. Raise your voice, ask explanation, demand proof and evidence, threaten them to complain and take matter higher to banking ombusdsman and consumer court etc. I am sure they will budge after some time.

Even on this blog which discussing PPF account opening at SBI we came to know that SBI bank officials sometimes force PPF account openers to start a Saving Bank account at SBI, which is a form of force selling.

Comments, please share some live examples you know of? Has this happened to you? What can be done to solve? Come unite and share ideas, you can leave a mark!!

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93 replies on this article “Force Selling combined with other financial products”

  1. Nikhil Mehta says:

    I experienced a similar forced selling sometime back at ING bank. I wanted a locker and the Relationship manager said I need to make an FD of Rs. 100000/-. when I said NO. they said its a rule.
    I said there is no Rule book which mentions this. Rules are same for all banks and branches. the Relationship Manager stubbornly said ‘This is the rule of this branch’

    I just went to their website, found the no. of Chief compliance officer and spoke to the officer who helped me on this. After 2 hrs, I got a call from the same Branch of ING and they requested me to come to the branch and gave me a locker without any kind of FD!
    This is one effective mechanism of staying away from forced selling!

    1. Thanks for sharing that Nikhil

      I always knew that , but never got a chance to apply it . I will refer to your example for the article I am using ! .. Thanks for mentioning it !

      1. Nikhil Mehta says:

        My Pleasure Manish!

  2. Vayuan garg says:

    i am intrested to take over a home loan through SBI, i submitted file with a cheque of rs 3500, but now bank officers asked taking a SBI LIFE INSURANCE is must and wants to add premium rs 1,20,000 with H/L of 20 lakhs for twenty year tenure.While i am not interested for life insurance please tell me IS it compulsory or not ? If yes then i take from other side?

    1. No , its not compulsory . Its just a way of misselling , tell them that you filed a RTI with IRDA and they have told you in reply that its not compulsory as per IRDA rules . ANd you have also heard about these kind of misselling cases. Tell them you dont want a loan , They will come back in 2 days . read this – https://www.jagoinvestor.com/2012/04/axis-bank-sold-policy-without-informing.html

  3. Joel Anthony Trinidade says:

    Dear Manish ,

    I complained to the operations head , the bank manager and they told me rules are rules . Nobody would give in writing that for locker such things are mandatory . From where i was there were two possibilities either to go their way or be without a locker.

    Now why am i raising this point now —- It is to create awareness Manish , sometimes people fall into a trap because they are gullible and there are still others that fall into it because they have no option. I am sharing my live experience thats why i posted over here. I am just highlighting how they took advantage of my desperate situation. In the above posts there is a mention about three points Information , time and power. They took the benefit of information ( i wanted locker desperately ) and time ( lockers are getting exhausted soon ….). Regarding knowledge , it was what i lacked because i was not aware that somewhere , someplace there existed something like Jaago investor. I wished I knew about the wonderful site Jaago investor back then.

    Btw i explored other options too : Many banks did not have locker facility , some had but did not have vaccant lockers. SBI asked me to make a FD of Five lakhs , IDBI asked me to make a FD of 50 K and take some ulip .

    1. Joel

      Ok, thakns for sharing it in if it was awareness purpose, I thought you are trying to find ways to complain against them. Note that for locker purpose, there is no requirement like this as per RBI guidelines, its just banks which pose these kind of rules. If its a PSU bank, then you can file a RTI and get the requirements for opening the locker , and then show it to them !

  4. Joel Anthony Trinidade says:

    Hello everybody,

    This is my personal experience of forced selling. I was in search locker. I went to indusind bank borivali branch next to Gokul hotel and enquired for a locker . I was told that for getting a locker it is mandatory to open a indusind maxima saving bank account with minium quarterly balance of Rs25000/- and it was mandatory to take a Aviva dhan vridhi policy for a minimum tenure of 10 Years ( Premium amount Rs 21 K for insurance cover of 1.5 L , i know i feel like kicking myself ) apart from the usual FD . I argued but to no avail and then finally after much arguement had to settle for the policy as well as open a Savings bank account. Worst part is where do i go and complain and to whom there is no actual proof that such misselling occured because everything was verbal. The only fact which might slightly indicate misselling is allocation of locker , start of insurance policy and Savings bank account are all with very near dates.

    1. You cant do anything after taking it , you should have done something before taking the plan , Why are you raising this point now ! .

  5. upendra says:

    My question is that does this free look period include the day of receipt of the policy document and also does this 15 days include the non working days also such as public holidays, sunday etc? And also what will be the free look period if the the insurance company office is not located in the same city? I tried to find the answer every where but no clarification was available regarding this?

    1. Upendra

      It should include the day of recieving the policy , but should not include the Public holidays . Better confirm at : jagoinvestor.com/forum

  6. Pradeep says:

    Absoultely right!!!
    Even I personally got offered this yesterday itself. This site really made me to take a firm decision. kudos guys!!
    I need to take decision on my homeloan payment, I put my story on comments board.PLs help me. If anyone wants to help me in taking the decision please mail me at deepindeepsea@gmail.com. I dont know if i can put my discussion here. so ping me pls

    1. Pradeep

      can you mail me the discussion .

      Manish

  7. bala says:

    true
    when opening bank lockers (including public sector ones), there is a defacto unofficial rule to open an FD from 1.5 lacs upto 5 lacs. depends on which bank you choose.
    this is apart from the annual charges you pay for lockers

    1. Never knew this , cant we complain for this somewhere ?

      RBI ?

      Manish

  8. Marshal says:

    manish,

    are riders facility available with term insurance (LIC)

    Marshal

  9. Ninad says:

    I faced this while opening a locker.

    1. IDBI bank asked to me buy MFs/Insurance from them. I refused.
    2. One cooperative bank asked me to open FD of 25K. I found this better option than IDBI and opened FD with them.

    1. Ninad

      What did you say to IDBI guys about rules ? Did you ask them to give it to you in written ?

      manish

  10. Sandeep says:

    hello

    My question is a bit out of the topic..But i would like to know the best free portfolio manager. I dont like money control just because too many ads.. can you suggest some good ones.

    Thanks
    Sandeep

    1. Sandeep

      I personally like http://money.rediff.com/ a lot . try that

      Manish

  11. mitesh says:

    manish ….what u think about LIC’s New wealth plus pln. ??

  12. What to do when u r a victim of such a fraud?
    ======================================
    This is based on my experience, i was forced a ULIP when i went for a home loan switch by ICICI Pune.

    1. send them a mail with all the relevant docs (keep a copy of it, i sometimes find it hard to keep an offline copy so i made a blog which server dual purpose http://icicidupedme.blogspot.com)
    2. send a mail to all the three level of escalations mentioned at ICICI website – this is just a formality as u need to give a proof of ur complaint before sending a mail to Banking Ombudsman.
    3. now send a mail to ICICI ombudsman with all complaint letter attached. Make sure you provide the complaint in the desired format.
    4. send a mail to ICICI Pru Bombay, thru mail and online, if u have been asked to buy a ULIP. Trust me the ICICI Pru is very fast in resolving any dispute.
    5. Keep sending stinker mails to ICICI, well they not budge but you will feel good and light.
    6. online blog will help u maintain the flow of sequence, the best part is that u will learn blogging very fast 🙂
    7. keep on following and one day someone will respond, in my case it took them 9+ months…..

    OR
    ============================================
    There is this very simple way of getting ur work done smartly by complying to all the stupid rules set by ICICI or any other bank for that matters.

    1. Go to the bank and take the visiting card of all the people who takes ur case (this is very important, if no visiting card atleast take their name, designation and mobile no.)
    2.Agree to their ULIP demand, pay the premium.Get ur work done
    3. wait for the ULIP welcome kit
    4. there is a freelook period of 15 days to 1 month during which u can refund the policy without provide any reason.
    5. as soon as u get the welcome kit, go to the nearest ICICI pru office and tell them u were forced to buy this policy by so you dont want it. give them in writing the details of the people who attend u at the bank. Write a strong mail, screw them.
    6. ur money will be refunded and ur work will be done 🙂

    choose which ever way is comfortable to u, i have learned the second way after going thru so much a pain but you guys can easily opt for solution no 2 🙂

    http://icicidupedme.blogspot.com

    1. Hehe . plan number 2 is really awesome , its kind of planned terror attack 🙂

      Nice

      Manish

    2. S S says:

      My colleague kind of did that..plan no 2. He and his friend entered the bank, the friend posed to be a journalist. He was running from piller to post since 2 months, everything got settled in 1 week.

      1. SS

        So it means that these Banks work on pressure . once they see that their misselling can be highlighted in public , they are afraid 🙂 . I got a good idea from this 🙂

        Manish

  13. oh my god .. so this is an organised racket .. and i used to think only ICICI is doing it …. see my blog which i have made for ICICI and how they forced me to buy a ULIP ….. for home loan conversion……

    man he whole banking system is gong for a tos…damn

    http://icicidupedme.blogspot.com/

    1. Hi

      You wont believe I wanted to out your story on this article , as I had read your story some time back , but i was not getting the link for your blog , so I didnt put it 🙂

      Manish

      1. Thanks Manish,

        Well actually after 9+ months i finally got all my answers but the solution itself has created another set of questions.

        I have sent ICICI a recommendation mail for all those who helped me along with my new queries which i guess, will never answered.

        http://icicidupedme.blogspot.com/2010/02/3hzyqwd2ka64.html

        All i can say to the investors is to get everything in writing and if the bank officials act smart, show them this blog.

        tc
        http://ICICIdupedme.blogspot.com

        1. thanks

          i saw that letter 🙂 nice . let us know when its answered

          manish

  14. Vinod says:

    Manish,

    I said well-timed because advertising and marketing by financial institutions have become so aggressive lately that people are more prone to buy investments that they may not need.

    I have put up a reference to your article in my latest blog at http://www.investjunction.com/

    Vinod

    1. Vinod

      ya you are correct .that for the link back

      Manish

  15. Mukul says:

    one doubt, can i purchase MFs online from my demat account?

    1. Mukul

      Yes you can , if your demat account allows , ICICI and HDFC allows it . See “mutual funds” section if any 🙂

      Manish

      1. Sathya says:

        Sharekhan also allows 🙂

        1. ok great .. I didnt knew about them . I am sure there are many others also but generally people have accounts with major ones only .

          Thanks for the update .

          Manish

  16. Swathi says:

    Good article Manish. People need to be aware and raise their voice against this unethical practice.

    I would like to share my dad’s experience. My dad has a savings account with ICICI bank and when he went to take a DD of 1.5 lacs (which is urgent) from the bank, they forced him to take a ULIP policy with premium 30k per annum.They haven’t processed the DD until he signed the ULIP policy docs.

    1. Swathi

      this is generally the employees fault , they force investors like this , Did you guys try to talk to the manager at Bank ? Highlight this to other investors there .

      manish

  17. Mahesh says:

    @Manish,

    This article is really an eye opener, no wonder atleast 8 out of 10 home loan applicants are becoming victims of misselling of products by so called banks. Surpriselying, PSU banks are harassing the common man on par with private banks. I had bitter experience with SBI housing loan and still there was no end of this issue. Would like to share our experience with you all.

    I am NRI and took housing loan of 16.5Lac for the tenor of 10 years along with my mother.
    I am a co-borrower of this loan and all obligations will be with myself including repayment
    of EMI. I provided all the documents to banker at the intial stage itself. No nody from SBI, mentioned that buying insurance product is mandatory to approve the housing loan at that time. But, just before approving the loan, they started cribbing and told that term insurance cover of 75K should be taken on my mother name.

    My father questioned the bank field officer and wrote a letter to SBI chief manager saying that why there was no communication during the application of loan and why you are insisting to take term insurance on my wife’s name even though our son is taking the obligation and sole responsibility. If they want me to take term insurance, surely insurance amount would have been much lesser considering my age. So far, there is no response from SBI branch officials, we are awaiting for the response from them. Mean while, they disbursed 10Lac and credited to our account.

    They might be thinking that, people are not aware of platform where they can raise concerns.
    Please advice, how can I take it up further to resolve the issue with my bank ?

    Your views and comments are much appreciated. I am sure, there are so many victims like me.

    Regards, Mahesh

    1. Srinivas says:

      I suggest you talk to senior SBI officials and if no response you can approach consumer court.
      Recently in Medical insurance case, Court ordered Oriental insurance pay the amount and judgment was towards the consumer.

      Keep us updated. Good luck
      Srinivas (http://money360.wordpress.com/2010/02/22/top-3-elss-mutual-funds-for-2010-11/)

      1. Srinivas

        Thanks for the update, so you have a link for this Oriental case ?

        Manish

          1. Thanks for the link . It was encouraging to see that people are taking legal actions against the company and winning too .

            Good one .

            manish

            1. Sathya says:

              This news was on the front page headlines of Times of India (Main Paper)….it shows the importance of the case winning by the party…thou it took a long time and they got some 50k bucks but the point is of winning it….

              Note: I m also planning to take medical insurance from oriental 🙂

            2. Sathya

              yes , winning is a big acheivement and it shows that consumers are being heard now . There are thousands who dont even attempt to raise their voices .

              Oriental is a nice company , you can take the Mediclaim from them . Just make sure that the policy suits your requirement .

              Manish

            3. prabeesh says:

              I dont know if many have hearded it. I used to read deccan herald paper in which a weekly issue used to come where the questions on consumer court cases are written. I had seen many case against the no payment of the court ordered amount. There are cases where court has to give another order to initiate the payment.. have you people heard of theses things?

            4. Prabeesh

              I am not sure if there are news like that, i have not ready any 🙂 . Any link ?

              Manish

            5. prabeesh says:

              Dont have exact link but should try the GOD for any links

              usual place where they put in deccan herald is in here
              eg:
              http://archive.deccanherald.com/Deccanherald/jan272004/spt12.asp

            6. Prabeesh

              Thanks for link , will look at it

  18. krish says:

    Excellent one manish…Thanks for the info…

    1. Thanks Krish

      Are you aware of any such force selling ? What measures do you suggest to curb them ?

      Manish

      1. krish says:

        Hi Manish,
        I am currently in US. I am not sure how it works in India but let me explain how it works here.
        Here we have a group called BBB (Better Business Bureau). If we have any such problem here with any retail stores / Banks / hotels etc… , we just have to launch a complaint with BBB. We just have to file a complaint over online. The entire process is very simple in such a way that any lay man can do it over online in 5 minutes. Thats it…our job is done. Now its BBB ‘s job to contact the retailer / Banks and take the disciplinary action againts them. They do have a SLA of 15 working days. The retailer has to respond and close this case within this timeframe. Otherwise the retailers / Banks will have to face the court hearings etc…Once they get into this loop, their reviews & ratings will get affected badly and they gets screwed. Because of this, the retailers here will take this seriously and they don’t do these kind of stupid work behind us.

        Finally EOD, our job will get sorted out in just 2 weeks of time and that too we don’t need to visit any offices or any person for this.

        I am not sure whether the same kind of things can be possible in India but the Government should implement all these things to help the ordinary people like us.

        immm…looks to be long way to go!!!!!!!!

        1. Krish

          nice to know about BBB . Right now we dont have anything like this in India , but I hope its there in some years 🙂 . We really have long way to go 🙂

          Manish

  19. Vinod says:

    Manish

    Excellent and a very well-timed article.

    Vinod

    1. Vinod

      thanks for comment . Why well-timed ? You getting some loan ?

      Manish

  20. Nikhil says:

    Interesting Article…

    Nikhil

    1. Thanks Nikhil

      Are you aware of any such force selling ? What measures do you suggest to curb them ?

      Manish

  21. Suhasini says:

    I agree that force selling does happen and do you think complaining about this will result into any action?

    1. Suhasini

      There are many cases settled against force selling, look at the article, I have mentioned that . I am sure raising our voices against this will make the difference somewhere .

      Have you faced forced selling ?

      Manish

  22. marshal says:

    excellent manish, very True…. I also faced similar situations when taking home loan and opening locker facilities

    1. Marshal

      Why dont you share more information 🙂 . I am sure it will help other to know what happens and it will add to diversification in force selling information 🙂 . hehe

      Manish

  23. S S says:

    Most of us make that mistake, we avoid reading documents. When one is buying a policy or loan for 15 years why can’t one spend 15 days reading the document? It won’t harm if I’ll process papers after 10-15 days and its worth it.

    1. Shweta

      Yes , Not reading Policy document is such a big reason for problems, why 15 days , it does not take more than some hours to read it . if a person is committing for years and decades in a policy or any investments , cant we commit some hours for policy document ?

      Manish

      1. Rama says:

        Asking to read the document is a good suggestion but the document is designed to obfuscate than to reveal. In one of the ULIPs I had, the first year charge ( which was about 55%) was not mentioned in a direct way but using some indirect 4% monthly charge ( and in very small letters so as to be inconspicous)- I missed this completely and thinking it was 4% yearly ( because this was what I was told when I was offered the product and it was a deliberate lie to get me to buy the product) I failed to return the product during its free look period. I found out that I had been duped after six months when I monitored the funds online but it was too late. I shouted at the agent but he now claims that he had warned me of all these costs – but I have no proof to expose a verbal promise. Either I have to stop paying the second premium and cancel out or go through at least five years and hope that I get some returns. Since the premium is 2lakh per year it is not easy to decide what to do. With a smaller premium it would have been easy to let go and get out of the trap.

        1. Rama

          Its sad to hear that , but you should look from % point, Which ULIP is it , Most probably you can stop your payment now and get your fund value after 3 yrs of lock in . Check the docuements again

          Manish

  24. Let me share my experience.

    HSBC Bank: “Zero Balance power vantage saving account but you have to take Mutual Fund SIP of Rs 3000(New Branch so there is a special scheme)”.
    In 2006 I was posted at Jodhpur & was looking for a Saving Account. I accepted this bcoz anyways I was looking to increase my SIP in tax saver & was badly needing saving bank account. After 3 months first statement came where they deducted Rs 750 for non maintenance of Minimum balance. I called the RM & he said galti se kat gayen honge & he waived it. Again after 3 months I got similar statement. My RM left the job, I discontinued the SIP & withdrawn all amount. This case is still pending as I moved to Jaipur.

    Problem is if you made investments through quinis (HSBC/Citi bank internal investment system for MF) you don’t have actual control over money. I can’t even change my address & bank details. It’s compulsion for me that I have to redeem it in that account. I don’t know what will happen, how much charge they will deduct when I will redeem the taxsaver.

    1. Hemant

      So is that true for buying mutual funds through demat account also like ICICI Direct ?

      Manish

      1. anonymous says:

        Guys
        You can change the detail, You need to visit mf office with all document (PAN Card , cheque book) and ask them to convert online to offline… You may need to fill the form again as in online folio they dont have your detail fully.
        Recently SEBI has issued directive, I had 2 MF online via citibank, was planning to change to offline but due to time not able to do, though I enquiried to AMC, they seems to fine.

        1. Thanks Anonymous

          Do you have some link which explains these things in detail , it would be helpful .

          Manish

          1. anonymous says:

            Call to AMC abt detail for change from online to offline, if they resist ask them abt SEBI recent circular, they will say how it can be done without any (they know u are informed investor).
            And Do your homework !!

  25. Debashish says:

    A shameful case of mis-selling (Bank sells ‘mandatory’ insurance plan to 70-year old NRI)
    http://www.moneylife.in/article/8/3657.html

    The bank has forced some70 yr old NRI lady to Take a policy with 10 Lakh Annual premium to
    open a NRE account . (Though I wonder which Insurance company gave a 1 crore policy to a 70 yr old )

    1. Debashish

      I have included this story in the main article here . its very sad to see that force selling is crossing limits now .

      manish

  26. DG says:

    I have never experienced things like this myself but have been forced to buy ULIP 3 years back by ICICI agents. Forced in the sense that I had recently relocated from US and had no idea about such schemes and that ‘advisor’ was all over us …calling day and night ….and trying to explain as if that was the best possible scheme in this world …and finally I said what the heck …let’s buy it …din’t want to be on the loosing side … From that point onwards, I have been offered ULIPs or such schemes many times but have been able to avoid them At the same time, I can easily visualize people force sell, missell and do any sort of thing to just get that cheque from an investor. In India as a small time investor, life is difficult…

    However, I kind of disagree with the example given by Satya @ real estate … I don’t think that is sort of force selling … that is their salesmanship … if you go to any one trying to sell any thing, he will always say that it is the hottest thing available in the market …go to buy a car, phone any where …

    1. DG

      “I didnt wanted to be on loosing side” , this is really a big reason of getting into mess . Psychological pain of loosing good returns is much higher than pain of loosing money .

      What do you suggest to improve this ? How did you over come this ? Knowledge ?

      Manish

  27. Sathya says:

    Good point…[:D]
    I would also like to mention that not only in endowment policy or ULIPS or loans, force-selling takes place…even in Real Estate it does. When ever you go around with a broker to see some flats for purchase, observe him carefully. He plays with one weapon i.e. Time. He will make you take that hasty(wrong) decision. He will market his flats as if no. of buyers are waiting in queue for his flats and he is giving you the golden opportunity. BEWARE of such street-smarts!!!..
    Happy Investing!!..[;p]

    1. @ Sathya & all jago readers

      You rightly said TIME is the weapon with real estate Agent. But there are 2 other weapons. Let me share it with all Jago readers.
      There are 3 weapons of selling or I say mis-selling.
      Or points where a consumer loose battle.

      INFORMATION: Do salesman knows about your need? (Don’t show you badly need it)
      TIME: If you have less time you will lose. (Be Patient-women are better bargainers)
      POWER: Perceived Power. Your Knowledge is your power. (Visit JAGO regularly)

      1. Hemant

        you have bring out important points here . 3 main problems which makes investors loose battle .

        INFORMATION

        Yes, everyone has to think from “need” point of view , people have never thought of “do we need it” , “how much we need it” , “do we need it at all” kind of questions .

        TIME

        No proper planning leads to this , once investors sit and plan things , they can save taking wrong decisions in hurry , no body is interested in this and do not understand the importance 🙂 .

        POWER

        Empowering ourself through proper education , this is lacking big time especially in our country , where we rely too much on others .

        Manish

    2. Sathya

      I have seen this while I see flat for rent , no matter what the flat is always going to go if we dont take it within 12 hrs , atleast we have to pay the token money 🙂 and this happens every time we see a flat to rent , some one or other has always in queue and we will loose the opportunity 🙂 . Huh .. its frustrating some times 🙂 .

      I would also not call it as “force selling” , but a tactic used by agents to force sell and play with time component .

      Manish

  28. Srinivas says:

    Though I have not faced such issues as I am still out of loan radar :).
    I would like to share stories of my brother and sister. They are state govt teachers. The day they joined the service, they had to report to First division clerk, Block Education officer and other junks as a joining process.
    These people have a side business of working as LIC agents (or wife), they will order or threaten to open LIC Jeevan* or Endowment policies through them. I used to tell my brother/sister not to take any LIC, but they could not complain to anybody and they started giving torture as corruption is common up the ladder in different ways.

    Finally, they succumbed and took LIC policies.

    1. Amit Kumar says:

      Manish what you have mentioned here is 100% right and I am one of the victims. Unfortunately these are kept into wraps and people don’t bother to bring this up. Now that you have brought up in your post, I would share my experience. In fact now I would like to review 3 Home Loan providers on my blog – whom I approached last year on my blog.
      The incident is like this. It happened with me last year with LIC Housing Finance. I needed urgent Home Loan as it was the last flat left into the apartment and we really liked it. And LIC Housing being a govt entity we thought it as most transparent. But we were told that for getting the loan I need to get an endowment policy which to me was useless. LIC in its loan form mentions an interest of +0.5% if you don’t take insurance. And I was ready to pay it but had no need or wish to take an endowment plan. But my agent and others in the firm insisted on “no loan sanction without endowment policy”! I had no option then but to take it. So I took it as an additional one time cost in buying my house and gave in. Though the amount of premium was not high (I obviously chose the lowest premium as I noway would continue the policy) but it was an unfair trade practice by all means.
      And I have found many such complaints on online consumer complaint forums too.

      1. Amit

        Go back to article and see how to complain against this kind of forced selling, you are eligible for the compensation it seems, atleast file a complaint and see what happens . Even though company does not force it , the employees at company make all this up so that they sell a policy and make commission . This is wrong .

        Do you think investors just compromise with these forced policies because they are looking at the big picture , I think yes .

        Manish

    2. Srinivas

      This is bad !! . Big govt officers are also doing Agent-giri .. Big officers are respected every where and lots of people who know them might buy policies from them either to impress them , buttering , in pressure .. but the money these agents will make will be very big , Just imagine if they sell 50 policies a year with an average 1 lac premium , they would get a great share in that , even a 30-40% share means 15-20 lacs 🙂

      What is the current state of their policies, I am sure they would be continuing them ..

      Manish

      1. @ Manish
        Insurance companies runs special drive to attract big officer’s(IAS/IPS & even politicians) family members to be their advisor(agent).

        Do you know Mr. Lalu Prasad Yadav’s daughter is an LIC Agent. She collected premium of 21 Crore(in just 1 one month of her joining) in 2007.

        1. Ohh my .. Premiums of 21 crores , so she earned crores in just 1 month from commisions , even though its indirect , its kind of cheating ..

          Manish

          1. @ Manish
            Statement of Miss Lalu’s Devlopment Officer
            “She herself has been responsible for her achievement. She visited the slums to create awareness among the people there about insurance policies. She is a self-made lady….”

            1. Hemant

              I think Indians lack of knowledge and ability to think analytically is responsible for her achievement . People who are in slums are anyways less uneducated and have less time to think about financial decisions in detail . They are most vulnerable to mistakes . Culprit are LIC and politicians 🙁

              Manish

      2. Srinivas says:

        Yes. these policies are still active. I have been convincing them to exit these policy, but they feel surrendering would fetch less money but they have to pay premium till retirement which is 30 years ahead.
        Also they fear going against superiors thinking they will take revenge in other way.
        Some how I am helping them to get out of it, but they know the ground situation(how they are getting harassed from these officers). It really sucks.

        1. Srinivas

          Yes , there can be cases of revenge , i accept . This is now the question of integrity and in some way politics 🙁 .

          I just wonder if they stop the policy on grounds of “no money to pay” , what will those gunda’s do then ?

          Manish

          1. Srinivas says:

            Since it is a govt job; one place and one salary account. They work in a village, they get salary credited to co-operative bank society. Premium is deducted from salary, the clerk incharge of salary matters knows all this and if premium is stopped, they will come to know easily.
            Hence my sister fear closing this premium. To get maternity leave, they forced her to open RD in post office.

            Sister now feels peace of mind is more important than money at work place.

            1. This is like “hafta vasooli” , in a clean and legal way.

              I am not sure what can be done here except motivating these Big Officers to have some dignity in life and try to come out of “blood sucking” mentality 🙂

              Manish

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