India is considered to be a burgeoning economy, and thus its insurance and other money investment sectors are also flourishing. But cases of fraud being exposed is a major concern for people in financial sectors, and the significant role these insurance scams play in negatively affecting the insurance sector and lives of people is often under-reported.
Shovon Sarkar, a high court lawyer from Kolkata, who has been at the helm of fighting for some of the insurance fraud cases, feels investment scams are often pulled off by a team of people who set up a makeshift office, called a boiler room.
To convince common people that their companies are real, they set-up a website that looks real and sometimes have a toll-free number to make the company look legitimate.
Scammers often target investors, who have lost money in a risky investment. They pose as Insurance Regulatory and Development Authority (IRDA) officials over the phone, while giving them offers to recover from their losses on their previous investments.
It is then followed by a series of manipulations by the people pulling of these scams. They first ask the investor to pay a substantial amount of money as a deposit, and what they promise is a considerable amount of profit in return.
Rammurti Chaurasia, a retired fourth class staff of a college, who was cheated twice, says people having retirement savings in a Locked-In- Retirement Account (LIRA) are often being targeted. There are usually limits to how much money you can take out yearly, and the investors have to pay extra tax for withdrawing money outside their limit.
These fraudulent companies misguide the retired people to pay 60-70 percent as a tax, whereas the actual amount to be paid is a lot lesser in these cases.
Rupashri Roy, a homemaker, was duped by Rose Valley Group of Companies. She said the fraudulent company gained the faith of people over time and used local agents to carry out their task.