Online Fraud - How Insurance Firms Deal With Online Fraud
When it comes to economic activities where money is involved in public domain, the risk associated with ill practices also runs significantly high. This is what develops into full time financial frauds and the unsavory experiences that innocent persons and agencies go through. Earlier it was thought that such frauds are limited to urban cities where organized crime takes place at a higher rate than the rural areas.
However, with the advent of digital age and information diffusion, there have been numerous such instances in the far flung villages across India. More often than not, instead of being one person’s misdeed, such frauds have been attributed to gangs who work in complicity with one another and swindle funds in a big way. In fact, over the years, insurance companies have collected and maintained data pertaining to the areas where the incidence of fake claims and monetary frauds is high. Surprisingly, such areas are not limited to urban or metro centers.
As identified by the insurers, these gangs operate in rings, with structured outline of a corporate agency and carry out their misdeeds with a great efficiency. The modus operandi varies – somewhere these gangs actually fudge the policy documents of an insurance company and somewhere, they collect data of persons on their deathbeds and even take some doctors on board to sign fake documents related to death certificates and claiming the insurance amount. The annual loss caused to the life insurance companies because of such activities actually runs in thousands of crores and the earnest revenue takes a big hit.
During the nineties and early 2000s, when the insurance sector was fairly in the early stages of expansion, the insurers suffered heavy losses because of such frauds. However, with the rapid technological solutions being infused everywhere, the insurers today have become much more aware of the tiniest mechanisms of these frauds and have begun to aggressively pursue such fraudulent designs. Of late, the insurance companies have set up dedicated departments that deal with risk and loss mitigation. These departments keep a track of the claims, identify potentially risky zones or deals, oversee the ground-level analytics and identify suspected cases for further action.
The severity of such frauds has been more in rural and semi-urban areas where the infrastructure for identifying such cases and ensuring further action is either too lax or incompetent. Added to this is the rate of corruption in local administration, the corrupt nexus between fraudulent medical professionals and these gangs, the dubious role of local police and the slow process of identification of such frauds. There have been instances when a large scam was unearthed by an insurer based on a random slip and the culprits were identified and legal action was taken. Among the frauds, the fake motor accident claims and the fake claims where natural deaths were falsely documented and shown as accidental deaths, top the chart. The legal recourse, however, has been effective in creating some sort of limited order. For instance in Uttar Pradesh, after the intervention of high court, the number of such fake claims fell to a large extent.
HDFC Life offers online life insurance plans where you receive numerous benefits with total transparency and flexibility. For details, click on the mentioned link: https://www.hdfclife.com/online-life-insurance-plans
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