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Trust & Safety
Understanding Insurance Frauds: How to Stay Safe
Think about the last time you bought or renewed your insurance policy – be it health, life, car or bike insurance. The intention behind the purchase was to secure a safety net in case of unexpected financial loss. But what if this security net becomes the means to an end for a fraudster looking to loot you of your hard earned money?
Insurance fraud is an increasing concern that affects not only insurers but policyholders too! Just as insurance companies have protocols in place to prevent wrongful insurance claims and insurance fraud, it is important for you to understand the flip side of this where policyholders like you could incur significant financial losses if you are not careful.
This blog outlines the most common types of insurance fraud, their consequences, and practical steps to safeguard yourself against them.
What is Insurance Fraud?
Insurance fraud is one where fraudsters use deception or misrepresentation with the intention to unlawfully siphon funds from a victim, under the guise of low premiums or limited-time discounts – which are more often than not – fake.
Insurance Fraud Scenarios
Scenario 1. Fake Offers: Fraudsters contact victims and entice them with unrealistically low premiums or exclusive deals, and trick them into sharing personal or banking information.
Ramya receives a call claiming her car insurance policy will lapse if she doesn’t renew it immediately. She is also offered a last-minute discount that would expire within the hour. Pressured, she shares her credit card details to renew her policy, only to find out later that large sums of money were fraudulently withdrawn.
Scenario 2. Fake Insurance Websites: Cyber criminals create look-alike websites of actual insurance portals, aiming to steal personal information, banking details, or payments for non-existent policies.
Praval needs a health insurance policy to cover himself and his family. He goes online and searches for “best health insurance” and lands on a website that seems to be of a well-known insurance company. What he missed was the outdated logo and the misspelt name of the insurer. Without paying heed to the details, he enters his personal details, banking information, and makes an online payment for a policy. Later, when he tries to contact the insurer, he discovers that the website was fake, and his money and personal data have been stolen by cybercriminals.
Scenario 3. Phishing Emails: Phishing emails are a common fraud method where scammers send deceptive messages and aim to steal sensitive information or install malware through malicious links or attachments.
Sushant receives an email that appears to be from his insurance company, claiming that his policy will be canceled unless he verifies his account details immediately. The email includes a link to a website that looks like the insurer’s official portal. Trusting the email and giving in to the urgency created, he clicks the link and enters his login credentials. Later, he discovers unauthorized transactions in his bank account, as the fake website was designed to steal his sensitive information.
Scenario 4. UPI & Digital Payment Scams: These scams involve fraudsters sharing their personal UPI links or QR codes, claiming them to be legitimate insurance payment links. They trick victims into transferring money to their personal accounts, leading to unauthorized transfers of money, under the guise of insurance payments or discounts.
Sucheta receives a call from someone claiming to be an insurance agent offering a limited-time discount on her policy renewal. The fraudster sends her a UPI link, asking her to complete the payment to secure the discount. Believing it to be genuine, Sucheta clicks the link and enters her UPI PIN, only to find that her bank account has been debited, and the insurance company has no record of the transaction.
Common Red Flags of Insurance Fraud
- Unrealistic offers, such as very low premiums or huge benefits.
- High-pressure tactics like “limited-time offers” or threats of policy lapses.
- Requests for payment through unofficial methods like UPI or personal accounts.
- Websites without proper security (e.g., no HTTPS) or contact details.
- Requests for sensitive data like OTPs, UPI PINs, or account details.
- Unsolicited calls, emails, or messages asking for personal or financial information.
How to Protect Yourself from Insurance Fraud
- Research Insurers: Verify the insurer’s history, financial standing, licenses, and customer reviews.
- Avoid Cash Payments: Use secure payment methods like online portal payments or card payments to ensure documented transactions.
- Protect Sensitive Information: Share personal data only with trusted sources and secure channels.
- Read Policy Details: Carefully review terms of the policy document to ensure legitimacy of the policy.
What to do if you’re a victim of Insurance Fraud
If you suspect fraud or have been scammed, act quickly:
- Report the Issue:
- PhonePe App: Go to the Help section and raise a complaint.
- Customer Care: Call PhonePe at 80–68727374 or 022–68727374.
- Social Media: Report incidents on official PhonePe accounts:
- Twitter: PhonePe Support
- Facebook: PhonePe Facebook
- Grievance Redressal: Use PhonePe’s grievance portal with your ticket ID: Grievance Portal
- Report to Authorities:
- Cyber Crime Cell: File a complaint at the Cyber Crime Portal or call 1930.
- IRDAI: Report fraud to the Insurance Regulatory and Development Authority of India at IRDAI Contact Us.
Important reminder — PhonePe never asks for confidential or personal details. Ignore all mails claiming to be from PhonePe if they are not from the phonepe.com domain. If you suspect fraud, please contact the authorities immediately.
