Outsmarting the Con-Man – Priceless Lessons from Insurance Scams

Posted 22 January, 2017 by Surely
in Pitfalls to Avoid

We all have heard them before.
How people have been conned by insurance companies and their sales staff.
The stories may be reported in the news or discussed through the coffee-shop gossips.
And they leave a lasting impression on most people.

Is insurance industry filled with crooks?
Not true at all.

There are admittedly unsavoury people working in the insurance field but you can say the same about almost every occupation.
Unscrupulous manufacturers are churning out fake rice; an accountant syphoned $16 mil from the companies that he was supposed to liquidate.
Lawyers absconding with clients’ money isn’t a rare phenomenon.

While it is perfectly okay to berate and shame the wrongdoers, it is also imperative that we learn from them.
It is how we improve our awareness and stay vigilant.

We discuss insurance scams today.
Not to disparage the insurance industry.
But to glean valuable lessons from them.

 

The Curious Case of Sally Low.

 

Sally Low was one of the highflying AIA sales staff when she decided that it was not enough.
She sold a Thank You policy to her client in 2002.
Except that no such insurance plan had never existed.

 

Sally Low - when she was not in Changi Prison.

Sally Low – when she was not in Changi Prison.

 

The rogue agent proceeded to buy 4 policies with the client’s money and netted a generous commission for herself.
She also managed to convince Mr Ong (the victim) that the insurance proceeds from 3 policies were computer mistakes and thus had the money transferred back to her.

This came to light after Mr Ong verified with AIA that the said policy was bogus.
Our scheming villain was subsequently put behind bars for 8 years.

 

Lessons learnt

If a veteran businessman like Mr Ong can be duped, commoners like us should take note and stay cautious.
We have to take steps to ensure that we are paying for a bona fide policy.

Insurance companies will issue the policy contract and send it to you upon receiving the premium and approving your application.
It is a sure sign that your agent has sold you a genuine insurance plan.
Always keep a lookout for that.

If somehow you do receive any unexpected payout from your insurance company, give a call to the insurer to verify.
And do not issue any payment in the name of your agent.
The insurers have the facilities to process your cheque without going through the intermediary.

 

Betraying a long-time friend

 

Staying in Singapore and AIA, Tan Peng Khoon conned his friend Mdm Lim into surrendering her policy and taking a loan on another.
For a mere sum of $7,518.11!

The victim Mdm Lim earns just $500 a month.
The heartless agent duped his client to sign the documents by lying that they were meant for the change of adviser because he was leaving AIA.
In truth, Mdm Lim was surrendering her insurance proceeds to Tan who then went to the casino and lost them all.

 

Apparently Tan's gambling skill isn't as good as Zach Galifianakis.

Apparently Tan’s gambling skill isn’t as good as Zach Galifianakis.

 

Tan’s jail term was deservedly extended to 18 months after the Prosecution appealed against the initial punishment.
No more casino for him then.

 

Lessons learnt

If you are unable to understand the documents that your insurance agent request you to sign, please bring along a trusted friend who can.
Obviously, that does not apply to you who is reading this.
But you can inform your family and friends about this.

In fact, this applies to any real life situation.
Never sign anything you cannot comprehend.

 

Disguising as an insurance agent

 

In Hyderabad (India), a man lost Rs 1 lakh (2k SGD) to his supposed insurance adviser.
However, Ram Kishore has never been an insurance salesman.

 

Never underestimate make believe.

Never underestimate make believe.

 

Moving over to Hong Kong, the scope of fraud is even wider.
Over 700 victims was misled by Lap Shing Insurance Broker, an intermediary that purported to be able to transact motor policies for various insurers.
Lap Shing issued numerous vehicle insurance contracts which turned out to be bogus.

 

Lessons Learnt

Although the frauds occurred on foreign lands, we have to stay vigilant against fake insurance advisers here in Singapore.
Lucky for Singapore residents, you may verify whether the sales person in front of you is licensed by MAS.
Simply request for the Representative Number of the person and verify it here.

We encourage you to scour for low premiums with our Compare feature.
On the other hand, if the quoted premium is unbelievably low, you may want to do a second take and verify with the source insurer.

 

The Barely Illegal One

 

Churning is the process whereby agents encourage policyholders to surrender their existing plans and to purchase a replacement with them.
Unethical advisers who have just switched agency may prey on their existing clientele to earn their commission quickly without a care for their client.
This is against the practice code of life insurance adviser but not entirely illegal.

 

Some advisers are more interested in the high score in their bank accounts than your welfare.

Some advisers are more interested in the high score than your welfare.

 

If your adviser proposes to have your policy terminated and get a new one, you may need to seek a second opinion.
Get it here if you have no one to turn to.

 

Conclusion

 

Regardless of what type of scams, it is good to learn from the victims than to be the target yourself.
When you look at the above examples, what the victims lost was more than just money.

They had lost longtime friendships.
They suffered emotional distress when seeking justice.
They lost faith in the greatest gift that money can buy.

So the ageless wisdom still applies.
Prevention is still better than cure.
Stop, look and avoid being a victim of insurance scams.

www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.

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