Citizens' Issues
Survey scams continue to increase spread on Facebook, says Sophos

According to the security firm, hundreds of thousands of Facebook users are hit by resurgence of "Girl killed herself" scam this weekend.

IT security and control firm, Sophos has warned Facebook users about the reappearance of survey scams that are quickly spreading across the social network. Many Facebook users are struggling to clean up their accounts once they have been tricked into allowing a third party application to post messages from their profile, it said in a release.

According to Sophos, typical scams include messages that read-
"OMG this girl KILLED herself after her dad posted on her wall: LINK"
"Amazing how such a harmless prank could cause something so bad!: LINK"
"OMG OMG OMG...I can't believe this actually works! Now you really can see who viewed your profile! LINK"

Sophos said, these scams are able to spread across the network as users think that online friends have posted the message, seemingly linking it to the enticing material. However, by clicking on the link and giving a third-party Facebook application access to their profile, users are helping the scammers to spread the application across their network of friends, the IT security firm added.

Graham Cluley, senior technology consultant at Sophos, said, "The safest way to protect yourself from such scams, is to not click on unknown links in the first place, even if you think they've been posted by a friend. If you have fallen for these tricks though, it's important to remove the applications completely, not just the wall posts, to ensure that you're not helping the bad guys to spread the scam further."

Sophos has created a YouTube video, which sites are free to embed, to help Facebook users clear up their profiles if they've been affected by any of these scams:


HC refuses to stay environment ministry order on Lavasa

Mumbai: The Bombay High Court today refused to stay the order of the ministry of environment and forest (MoEF) asking Lavasa Corporation to stop the construction at its township near Pune, reports PTI.

The court, which was hearing the petition filed by Lavasa Corporation challenging the stay of the construction, directed the ministry to take a final decision on the show-cause notice issued to Lavasa by 10th January.

The high court also asked the MoEF or the state-level environmental impact assessment committee to visit Lavasa before taking the decision.

The court said Lavasa can challenge the final decision of MoEF subsequently if it is aggrieved by it.


The Year That Was: Insurance not in good health

New ULIPs that are hardly better than the old ones, the ban on ULPs, and mediclaim policyholders hit by the cashless imbroglio. It’s been a tumultuous ride for insurance customers in 2010

Given the frequent headlines about various interventions by the Insurance Regulatory and Development Authority (IRDA), you can be faulted for thinking that 2010 has been the year of the insurance customers. But customers were battered by a variety of blows as well. Frankly, customers can trust insurance companies and agents at their peril. They need to be constantly vigilant. This was the story in 2010 as well.

First came the spat between the IRDA and the Securities and Exchange Board of India (SEBI) over who should regulate ULIPs-a cross between insurance and investment. SEBI looked at it as an investment and sent notices to insurance companies asking why they should not be regulated by SEBI because they were running what can be interpreted as collective investment schemes. IRDA won that battle but it came down heavily on the insurance companies and changed the rules regarding ULIPs. Were the new ULIPs any better? Not quite. (Read The New Old Ulips)

In an extremely candid comment to Moneylife in Hyderabad in August, J Hari Narayan, chairman, IRDA said, "The insurance industry has made a mistake in marketing insurance as investment. It is a risk product." (Read “The insurance industry has made a mistake in marketing insurance as investment. It is a risk product”)

But ULIPs have been the main source of revenue for insurance companies all these years. The new framework of ULIPs substantially reduces the profitability of companies and agents. As a result, agents are less motivated to sell ULIPs. The life insurance industry recorded a 50% dip in new business premium income in November. This was mainly because of the changes in the ULIPs which make them less enticing. The pension ULIPs offering 4.5% guaranteed returns also have few takers. As a result, insurers have already shifted to selling traditional plans like endowment plans and money-back plans.

For insurance companies too, selling traditional plans means more profits now. A lot of them were making money from high surrender charges so far on ULIPs. Now, IRDA has capped the surrender charges drastically. The change in the business is evident from the dwindling number of hoardings that exhibited ULIPs, and fewer branches and agents. Moneylife met insurance agents and found that traditional plans are getting a boost as they are more profitable for both insurers and agents.

Policyholders are persuaded to buy the more opaque traditional plans now. Strangely, even though the IRDA chairman hinted at mis-selling of ULIPs, the regulator doesn't want to touch traditional plans. According to Mr Hari Narayan, "Traditional plans are not broken, so why fix it? They have been around for so many years and there is no need to make changes." The increase in lock-in period for ULIPs from three to five years has given impetus to single premium ULIPs. The insurance component in them is much lower compared to that for regular premium ULIPs.

IRDA has taken a big step in banning Universal Life Plans (ULPs). ULPs were totally anti-consumer. For instance, Reliance Life insurance swallowed a hefty 80% of the first-year premium as allocation charge for some policies. Apparently, 40% of Reliance Life Insurance's new business premium came from sales of ULPs during the June quarter. The new guideline renames ULP as variable insurance products (VIP). It charges first-year premium allocation of 27.5% which is certainly not going to make it attractive.

On the general insurance side, customers were hit by the withdrawal of cashless facility by PSU insurance companies when they found cases of gross overcharging in hospital bills. But IRDA refused to actively intervene, leaving Mediclaim policyholders in the lurch.

Government-owned insurers rolled out the preferred provider network (PPN) concept to continue the cashless facility at hospitals that agree to their pricing for 40-odd procedures. Even though the network boasts of over 450 hospitals-in the metros-that have acceded to their price list, the majority of corporate hospitals in Mumbai have stayed away from PPN. Unfortunately, in India, there is a supply side constraint of quality hospitals and hence it is no surprise that corporate hospitals don't feel the pinch of the withdrawal of the cashless facility. Interestingly, the insurers applied the PPN concept to only individual policyholders.

Call it corporate muscle power or the lure of future business, insurers still bend over backwards to take care of group insurance policies. This is despite the fact that they suffered huge losses in group insurance during 2006-2009. Government-owned insurers suffered a loss of Rs417 crore on individual mediclaim policies and Rs622.49 crore on group mediclaim policies.

Government-owned insurers have decided to float their own third-party administrator (TPA) for better management of claims by reducing the high-claims ratio. This comes after the reputation of TPAs was tarnished by allegations that with an eye on profits they were compromising their role by encouraging high claims, working hand-in-glove with some hospitals. TPAs were slapped from both sides, with hospitals alleging that TPAs delay in making payments to them. Future Generali Insurance launched Future Generali Health (FGH), an in-house cell for servicing health insurance clients, to gradually replace TPAs. They join insurers like Bajaj Allianz and ICICI Lombard who rely on their own claims department.

Some insurance firms also continued with dubious practices through the year. Reliance General Insurance jacked up the premium in Reliance HealthWise mediclaim by almost 500%, which put off customers. This, at a time when the general insurance sector is expanding and no other company is exhibiting negative growth. After being labelled as the cheapest policy for three years, Reliance General attributed the increased premiums to a rise in illnesses and the inflationary trend in medical costs. IRDA approved the steep hike much to the agony of policyholders.

With portability still a distant dream, policyholders cannot easily change insurers because pre-existing conditions will be disallowed by the new insurer for four years. Policyholders have been writing complaints to different authorities without success, and more importantly they haven't heard from the insurance regulator. It's surprising, considering that the regulator had put out a lot of advertisements in newspapers this year, urging policyholders to get in touch if their grievance were not resolved by insurers. Well, as we said, insurance customers will have to be on a constant vigil.




7 years ago

IRDA not only lacks integrity but is also grossly incompetent in its task as regulator. How else can you explain that these things are happening and IRDA is doing nothing about them? The regulation on ULIPs/ULPs was also done only after SEBI stepped on its toes and claimed jurisdiction. Till then, it was happy to be asleep at the wheel and let the insurance companies loot the public!

Deepak Mendiratta

7 years ago

Absolutely Raj !! Bingo on the TPA issues. The health insurance experience of policy holders is only going to get worse before it gets any better.

The challenge is that the entire exercise of IRDA to introduce TPA's seems to be under going a radical shift. There is already a Huge learning available within the TPA industry which never got captured in the first place. With insurers trying to come up with their own TPAs, the learning of the current ones, their relationships grown over the years - all that will now get reinvented.
One hopes that the costs will get controlled for the final consumer. And this can only be done by the GIPSA TPA coming in and wielding more power than 28 odd smaller entities.

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