Personal Finance   Exclusive
PNB Metlife refunds Rs25,000 to the correct policyholder: another Moneylife victory

PNB Metlife has returned Rs25,000 to the correct policyholder to make up for their error in earlier refund to wrong policyholder, following an article in Moneylife on 2nd May.

On 2nd May Moneylife had put out article about a PNB Metlife policyholder who was given a run around for Rs25,000 that it collected through its flawed online premium payment system. Ms Asha Kapoor (name changed) had approached Moneylife insurance helpline seeking help to get her money back, which PNB Metlife, surprisingly had given to some other policyholder. The system has no check of the entered data of policy number, date of birth, mobile number and email address and so the payment of Ms Kapoor was applied to a wrong policy number due to a typo with one digit switched (e.g. policy number 37012645 instead of 37012654).

 

Read - PNB Metlife online premium payment: You may lose your money for a minor fault!

 



Following our article, Ms Kapoor got a call and an email from head – grievance redressal team of PNB Metlife the next day (3rd May). According to Ms Kapoor, “He said in his conversation that he was sorry about the whole thing and that PNB MetLife would be looking into the lacunae in their system. They promised to deposit Rs25,000 into my PNB MetLife account within 3-4 days as premium paid for 2012-13 (original payment was done in Jun 2012 ).”  The premium amount of Rs25,000 was deposited into Ms Kapoor’s account on 6th May morning.

 

Moneylife had written to PNB Metlife on 25th April and 30th April and a call was made on 26th April, but there was no response. PNB Metlife was probably waiting to see if we really write about it and may be hoping that the issue gets sidelined.

 

Customers would now look forward to an improvement in PNB Metlife’s online premium payment system. In fact, we wonder why PNB Metlife online premium payment system even asks for the date of birth, email and mobile number when it is not cross-checked with the policy number for which the payment is made. It is not just the absence of cross-check of policy number to date of birth, mobile number and email address. The system accepts payment to even non-existent policy number. In short, you can even pay for a junk policy number.

 

PNB Metlife has recently launched TV ads that proclaim to “Be Double Sure” in life. A bank customer who receives money from the cashier does the counting of the money, when the cashier is counting and counts it again after receiving the money. The punch line is that “Paisa ho ya life insurance, hamesha double sure hona hi accha hain. Punjab National Bank and Metlife ne milke banaya PNB Metlife. Hua na double sure.” We certainly hope PNB Metlife can live up to same standard for their online premium payment system to make it “Double Sure” for a policyholder who may make an error in keying a long number. A policyholder may key in incorrect policy number, but he or she is unlikely to make mistakes with their own date of birth, mobile and email address. There is the need to cross-check all the entered data.

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COMMENTS

rajneesh pandey

5 years ago

PNB metlife is a scam.
i am a pnb metlife policy holder and when i opted for the policy sales manager promised something else when i got the policy documents there was something else.
same when i talked to the sales manger he took the documents from me and same that he will get the policy refunded and took all of the cancellation documents.
now they are deducting the money from my account for policy premium even i have called their customer service team and asked them to stop the charge but they have charged my card again.



rajneesh pandey
email - [email protected]
9711563298

nagesh kini

5 years ago

Congrats. Yet another case of "media activistism outreach" ?
The punching in wrong digit is the cause of the amount going to the wrong account. Possibly had the cheque been sent to the insured this could not have happened.
This is a classic case for the RBI Dy. Gov. Dr.KCC who swears by "chequelessness". They have to come out clean on what checks and balances will be put in place to prevent such gaffes.
Had MLF not taken it up, a wrong person would have been enjoying at the cost of the true beneficiary!

REPLY

N Kanitkar

In Reply to nagesh kini 5 years ago

The wrong person is still enjoying Mr Kini. The wrong policy holder was sent that money from MetLife.

nagesh kini

In Reply to N Kanitkar 5 years ago

It is certainly up to Metlife to recover from the wrong recepient.Double sure karna hi hai na?

manish wani

5 years ago

Congrats Moneylife.

My small question though. If Metlife would have responded to you phone call then would this case been settled as one off case without Metlife setting the systems correct and others still exposed to such mismanagement?

Now that the case is resolved, can this be followed through to the logical end by confirming that their online payment system is corrected?

Once again congratulations and thank you. Please keep up the good work.

raj

5 years ago

Thank you all for your wonderful comments! Appreciated.

REPLY

CA PRADEEP AGARWAL

In Reply to raj 5 years ago

It is not only wonderful comments, but MLF team has really worked very hard, plus like hawks you should keep yourself posted and bring it in public domain, we will be really great full of you all. AGAIN ALL THE BEST FOR FUTURE EN DEVOURS.

CA PRADEEP AGARWAL

In Reply to raj 5 years ago

It is not only wonderful comments, but MLF team has really worked very hard, plus like hawks you should keep yourself posted and bring it in public domain, we will be really great full of you all. AGAIN ALL THE BEST FOR FUTURE EN DEVOURS.

Shashikant Eklare

5 years ago

Congratulations Moneylife. For active support to the policyholder. It needs the concern. U have showed it once again. All the best to you.

shailesh gandhi

5 years ago

This is a great example of media acting as a watchdog and helping individual victims. More power to Moneylife

uttamkumar dubey

5 years ago

Great job indeed in the age of lawlessness and all evils!!!!

Great success in such a short span...thumbs up Moneylife!!!!

Suiketu Shah

5 years ago

As Ms Dalal rightly stated banks like Indusind and PNB have fallen in line and reversed the injustice(thanks to ml intervention) as they have some shame.

Banks like HDFC and HSFC have no shame.Infact the former specialises in harassing customers and insulting and abusing them at all levels in any which way.Try a simple thing like closing yr account with them.

Great work by moneylife:)
Suketu

REPLY

CA PRADEEP AGARWAL

In Reply to Suiketu Shah 5 years ago

PNB does not have any shame, they are charging ISO(Inter Sol Charges) with impunity, though their agreement says that ISO not to be charged, but they charge and return them back after considerable long time. Why? charge in the First place

Suiketu Shah

In Reply to CA PRADEEP AGARWAL 5 years ago

Mr Agarwal

PNB atleast has the shame to reverse the wrongdoing pointed out my ml.HDFC Bank behave with every retail customer as if they own the money and refuse to close the account saying "come after 1 week".The rule says once all paperwork is over account has to be close same day.HDFC Bank staff also hate each other the way they behave with each other.

PNB are angels compared to HDFC Bank Mr Agarwal.

DR TENY

5 years ago

great job,money life

DR TENY

5 years ago

great job,money life

DR TENY

5 years ago

great job,money life

DR TENY

5 years ago

great job,money life

DR TENY

5 years ago

great job money life

Rakesh

5 years ago

Keep up the good work Team....

Kavita Swame

5 years ago

Moneylife you are my hope, it really works I have been following for sometime. Retired individual also got his money back from IndusInd bank etc. Thanks a lot.

Personal Finance   Exclusive
PNB Metlife online premium payment: You may lose your money for a minor fault!

PNB Metlife online premium payment does no verification of the policy number with date of birth, mobile and email address. One policyholder made a mistake in keying in the policy number. Amazingly, PNB Metlife refunded the premium to the wrong policyholder and is washing its hands off!

In June 2012, Asha Kapoor (name changed) used the online premium payment facility of PNB Metlife to pay Rs25,000 for her ULIP policy. While she put correct date of birth and mobile number, the policy number had a typo with one digit switched (e.g. policy number 37012645 instead of 37012654). Without any cross-check with the entered date of birth and mobile number, the payment was accepted for a wrong policy.

 

To make the matter worse, PNB Metlife refunded in full to the policyholder of the wrong policy (also a ULIP) to which payment was applied. It must be first case in history of ULIP that an insurance company claims to have refunded full premium!

 

A ULIP has premium allocation charge, policy administration charge, surrender charge and also mortality charge for risk cover. Once you make a premium payment to an existing policy there is just no way to get back your full premium. How did PNB Metlife ‘refund’ the full amount?

 

On not receiving an electronic receipt, Ms Kapoor filed a complaint with the grievance cell in November 2012. After couple of interactions, she finally got a reply in February 2013 that the premium had been paid to a wrong policy and that PNB Metlife had refunded the full premium to the policy owner of the wrong policy in Septmber 2012. Ms Kapoor should have asked for statement or logged in to see if the payment was indeed used to buy units for her policy in June 2012. It was a mistake that proved too costly.

 

PNB Metlife gave Ms Kapoor the name, address and landline number of the wrong policyholder and asked her to follow-up on her own and get her refund. According to PNB Metlife’s reply to the policyholder, We would like reiterate that the user is responsible for the accuracy and authenticity of the instructions provided to Metlife and/or service provider and the same shall be considered to be sufficient to operate the payment gateway. Metlife have no liability or obligation to independently verify the instructions or the authenticity of any transaction.”

 

Ms Kapoor has tried contacting the wrong policyholder on many occasions, but has not succeeded since the telephone number does not exist. The wrong policyholder’s address is in a different state which makes it difficult to physically visit and find out.
 

The case gets interesting based on what Ms Kapoor found out about the wrong policyholder. According to Ms Kapoor, “The person had enrolled for a ULIP policy in 2008. No premiums were paid thereafter. The policy was probably in a suspended state. This person got a refund of Rs25,000 and closed the policy. He was a PNB MetLife agent till 2010 or thereabouts. It is clear that there has been collusion between this person and PNB MetLife.”  

 

The questions that arise in this case are:

 

1. Why does PNB Metlife online premium payment ask for the date of birth, email and mobile number when it is not cross-checked with the policy number for which the payment is made? Even if it is accepted, can they not know that details entered do not match and then alert the bank account holder at some later time?
 

2. How did the wrong policyholder come to know that someone has made premium payment towards his policy?
 

3. If he somehow came to know about it, did he ask for a refund? If so, how is it possible that PNB Metlife gave full refund of Rs25,000 by cheque? Does any life insurance policy give back the full premium paid at anytime?
 

4. Why did PNB MetLife refund the Rs25,000 to the wrong person and not to the bank account from where the money originated?
 

5. Did the wrong policyholder commit a fraud by asking for a refund knowing that someone else had made premium payment by mistake?
 

6. Did he get an SMS alert or email when Rs25,000 premium was paid towards his policy.
 

7. How will PNB Metlife account the refund with its database of policyholders? The exact amount of Rs25,000 may not be what was due from the wrong policyholder. That should have also alerted PNB Metlife before they even thought of making any refund. How will the refund be accounted for against a wrong person?
 

8. Why did PNB Metlife take such a long time to find out what really happened?  Why did PNB Metlife take over two months to tell Ms Kapoor that they refunded her premium payment to wrong policyholder? Does this represent usual customer service delays?
 

9. Is it good customer service to tell your policyholder to go and retrieve your the money you lost from someone else?
 

10. Was the wrong policyholder a PNB agent and if so, was a there a collusion between PNB Metlife staff and the wrong policyholder?

 

PNB Metlife has kept a stony silence on the issues raised by Moneylife even after couple of emails and a phone call.

 

We have checked other websites like ICICI Pru Life and HDFC Life for online premium payment. They have much more checks than PNB Metlife. At the minimum each website stopped from online payment if policy number and date of birth did not match. Can PNB Metlife put a simple check to verify the details it takes from policyholder before accepting the payment or are they too eager to get payment from anyone by hook or by crook?

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COMMENTS

Ashok Desai

12 months ago

I have paid online premium on my policy no 20871663 pn 23.06.2017 fpr which receipt was not generated.Pnbmetlife has been reminded on so many occassions by mail.Now I am not sure whether premium is received by them and adjusted to my policy. premium is neither acknowledged nor receipt is sent.

P S MANI

5 years ago

Pnbmetlife insurance should take care of the online payment of the policy holder to get his/her receipts through email without fail and avoid sending postal correspondence on renewal policy payment.

srinivasan M

5 years ago

This case is ripe to be taken to IRDA and Banking Ombudsman to see if they truly stand for justice. To set up online system and that also to accept payments, but still not have any online validation for the data taken from customer,Whose fault is this ? This is also a deficient service to the customer as he is dealing with a very dangerous online system where the system cannot recover from simple data errors.

REPLY

CA PRADEEP AGARWAL

In Reply to srinivasan M 5 years ago

TOTAL DEFECIENCY on the part of the Insurance Company.

CA PRADEEP AGARWAL

5 years ago

Metlife if had done in their country the establishment might have closed their shop or heavy penalty might have been imposed so that they do not dare it again but in our country laws are OK but operations is very weak due to............

manish wani

5 years ago

Alarming but interesting in other way. PNB Metlife's add emphasizes about value of double checking. So are they indirectly telling the customer that you double check before paying :) If confidence and trust is the foundation for insurance company and I am assuming that is what they are trying to convey in ad then how come they do not have this simple double check before processing?

REPLY

CA PRADEEP AGARWAL

In Reply to manish wani 5 years ago

Yes, they are adding value by cheating the customers, I feel a direct complaint may be sent to RBI GOV. today he said about strictness on Banks and Insurance Companies and their nexus.

CA PRADEEP AGARWAL

5 years ago

Should file a case with the Insurance regulator i.e IRDA

N Kanitkar

5 years ago

One morre revelation. You can key in any random number as policy number and all other fictitious details and it still takes you to Bill desk for payment.Cheers. Then who keeps the money and for how long??

REPLY

raj

In Reply to N Kanitkar 5 years ago

that's terrible....

Dayananda Kamath k

5 years ago

their advertisement it self should have been an eye opener for the customer the person double checks the cash being counted by cashier and again he himself to be double sure. and tag line that is why 2 have joined together to form pnb metlife. and 2 together have looted the policy holder. long back one of the nationalised bank provided mobile recharge through atm. here the atm will recharge the mobile and recredit the amount back to your account instead of the service providers account. this was brought to the notice of the bank management, reserve bank of india, the charman of the service provider and even a police complaint was lodged. but no action was taken. rbi conducted a special inspection of the bank on my followup and some times a nsaty letter which forced them to do the inspection. they found the irregularity but did not bothere to initiate action. the telecom service providers where also not bothered that they are loosing revenue. police once enquired what is the actual situaton and gone.

REPLY

raj

In Reply to Dayananda Kamath k 5 years ago

Yes, Mr Kamath. You are right about PNB Metlife advertisement on double checking the money. Unfortunately, PNB Metlife online payment does not seem to cross check anything. So, forget about double checking there is not even single checking with PNB Metlife online payment.

Rajeev Sharma

5 years ago

She should raise the issue with IRDA.

REPLY

CA PRADEEP AGARWAL

In Reply to Rajeev Sharma 5 years ago

YEAH YOU ARE RIGHT

Personal Finance   Exclusive
IRDA stops advance premium payments beyond 30 days. You may face issues!

On 12th April, LIC issued circular to all its offices stating that the advance payment of premiums facility is withdrawn. While IRDA may have good intentions for it, there will be many customers who will get adversely impacted. Did IRDA consider genuine difficulties that will arise?
 

The Insurance Regulatory and Development Authority (IRDA) has banned life insurance companies from accepting premium under linked as well as non-linked products for more than 30 days in advance to prevent money laundering. Life Insurance Corporation of India (LIC), in a circular dated 12 April 2013, states that the premium due may be accepted 30 days before the due date of payment of premium. In case you have opted for monthly premium payment mode, you will now be allowed to pay only three months’ premium in advance on the date of commencement of the policy.

 

According to Mr. Prashant Tripathy, chief financial officer, Max Life Insurance, “At Max Life Insurance we have some specific steps in place to ensure that we do not hold on to customer money, paid in advance. As per our current process, we refund advance premium if it is paid three months in advance (for all modes). We are conceptually aligned to the recommendation of not accepting advance premium. The time-frame of one month for yearly premium modes and three premiums in advance for policies with monthly mode premium payment options is also apt.” But, it means not all companies have implemented the 30-day rule yet, even if they agree to it. If the 30 day rule was really good then all insurance companies would have jumped for it.

 

Until now, a policyholder could make a lump-sum payment of premium before the due date and even get a nominal discount on it. IRDA may have reasons like preventing mis-selling to come up with this rule as agents may be enticing policyholders to avail the premium discount by paying premiums in advance. In fact, LIC, for its traditional policies, allows premium payments five years in advance. IRDA may want to promote a regular savings habit.

 

While IRDA’s intentions may be genuine, the move will adversely impact several groups of policyholders. It is unclear if IRDA has given a thought to the problems that can arise. The change may even be termed as anti-consumer by many policyholders and agents based on the grievances that can arise. IRDA should have allowed three to six months of advance premium payment without any discount. Here’s why.

 

Some of the issues that will soon come up:

 

  • Companies ask salaried employees to submit proof of 80C investment by 31st January every year. If the life insurance policy premium for the employee is due in March, how will the employee submit the proof as the insurance company will not accept premium payment in January due to the 30-day restriction? Most of the insurance policies are usually sold in the month of March due to the looming deadline of financial year end. If so, there will be lakhs of salaried employees who will not be able to comply with company rules. Will the corporates change their rules to accommodate employees unable to show 80C proof by January end?

 

Mr Tripathy, says, “This we understand is a concern but customers while filing I-T returns can ask for a refund for any excess tax paid.” Asking for refund for any excess tax paid is tedious process that will arise if companies stick to 31st January deadline for 80C proof and the employee cannot give it as renewal is due in March.

 

  • On 6 December 2004, LIC had come up with a circular which states, “We have been receiving requests especially from the deference personnel to allow acceptance of premium under their policies by November, so as to enable them to obtain the tax rebate at source. If the premium is paid after November, tax rebate at source is not available and refund has to be obtained from the Income-Tax Department.

 

In order to facilitate availability of tax rebate at source, it has been decided to allow acceptance of premium up to six months in advance and the premium receipt is issued across the counter. However, no discount would be allowed on such advance premium payment and the advance payment option shall be allowed only within the same financial year.”

 

It is clear that the defence personnel will face issues now that premiums will be accepted only 30 days in advance of the due date. Allowing premium payment up to six months in advance with no discount was put by LIC for a specific purpose.
 

  • Many policyholders have fluctuating income. They may have money on hand that can pay future premiums, but if they are not allowed to pay the premium the money may end up being spent on non-financial things or go in other financial investments. When the actual premium due date comes, they may not have readily available funds to make the premium payment.
     
  • The new ULIP does not have a ‘cover continuance’ feature. There is no concept of revival of new ULIP. If you are not able to make premium payment, the policy will go in a discontinued mode and the funds will earn a pathetic savings interest rate. If five policy years are completed, then the corpus is returned back to you. A person with a fluctuating income will be refused to make advance premium payment when money is available and will fall in the trap if the money is not ready at the time of premium renewal. The policy may get discontinued at a wrong time when the fund value is low due to market conditions.

 

  • Policyholders leave India for a few years and may not want the hassle of remembering to pay premium within 30 days of the due date. It is much easier to make premium payments in advance and forget about the issues that can arise if you are unable to make the payment on the due date. The convenience of premium payment is completely lost with the new rule. Sure, online payments can be done from anywhere in the world, but many policyholders would rather pay by cheque. They want to ensure that payment is properly applied to the policy and no obligation outstanding.

 

Many policies have small amount of annual premium (less than Rs1,000). It is just easy to make future premium payments and forget about it rather than to remember such small commitments. Can IRDA help these customers?

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COMMENTS

ABHA CHAWLA MOHANTY

5 years ago

IRDA POLICY MAKING APPEARS IN CONSONANCE WITH SPAN OF MANAGEMENT,,,,!?TOUCHE'

Emerging Voice

5 years ago

This is good initiative. Many of us who use internet banking will benefit as we schedule payments for different dates. Why pay in advacnce when one has grace period upto 30 days for different payment ter ms.

PRABHAT

5 years ago

PERSONS WANT TO PAY PREM. IN ADVANCE , FOR THEIR PERSONAL REASON SHALL KEEP THAT MONEY IN THEIR SAVINGS A/C AND GIVE MANDATE TO INSURANCE CO. TO COLLECT PREM. FROM HIS BANK AND TILL THEN BANK WILL PAY S B INTT. FOR THE BALANCE IN THE A/C. NO BOTHERATIO FOR CUSTOMER .

DEEPAK KHEMANI

5 years ago

Another hare-brained idea from IRDA.
Why cant the policyholder pay his premium in advance when he has the funds available with him?
Why should he wait till the premium due date?(or 30 days before)
It's all about convenience.
How does limiting a premium payment to 30 days prevent money laundering?

Kirit Nagda

5 years ago

IRDA Should allow at least for One Year advance Premium. All are not Punctual including agents and Clients.

Kirit Nagda
Insurance Agent

REPLY

Dipen Shah

In Reply to Kirit Nagda 5 years ago

You can advise your clients to park the advance premium in debt mutual funds and transfer the due premiums on regular due dates. By doing so, they would have the dual advantage of continuing policy cover and earning higher interest. In advance premium, if one would have the requirement of the money, he/she cannot withdraw the advance premium. Here they would have the benefit of flexible funds too.

Dipen Shah

5 years ago

LIC has now come up with an arrangement with LIC Nomura MF to direct transfer of premiums from LICMF Savings Plus Fund, which is a debt fund and provides 6-7 % p.a. returns to the investors. The policyholder has to provide details of his/her policies in prescribed format and LICMF will transfer the said premiums on the due date to LIC. This facility is similar to ECS, where in the policy holder has to maintain balance in his bank a/c.

However, the issue of showing payment proof in month of November for policy due in March would remain there. The employers should consider the fact that payments may be made in March on time and should give the benefit to the employee.

pawan

5 years ago

1. The idea of IRDA thru this clause is primarily to curb money laundering and ALSO miss-selling. The regular pay policies are communicated to client as single pay and premium of next 3-5 years is collected in one shot. This gives a false impression to client of the product being single premium low cost.
2. For tax benefit, most of the companies consider payments made till Nov-jan and on the basis of last year premium receipt accept that the person shall make further payment in his policy and thus extend tax benefits. It happens every year with thousands of my customers.
3. people going outside india may very well choose auto debit mode through which they dont need to remember the premium dates. If they leave the amount in their account, premium shall get debited when due.
4. It is a rule of insurance that one should take liability of only those premiums which can be fulfilled by your regular income. In case of fluctuating income, it is always suggested to go for single premium products. This is precisely one of the reasons due to which IRDA wants to restrict advance payments so that customers buy suitable products as per their earning schedule and not as per the agent's wishes.

REPLY

Deepak Shenoy

In Reply to pawan 5 years ago

Great points Pawan and I agree with all the above. Curbing of mis-selling is very very important - more than the minor difficulties that people will face.

In addition, if people want to go abroad but still pay by cheque, they can provide post-dated cheques that meet the 30 day criteria? This applies for those 1000 rupee cheques as well.

I have worked in organizations where they honour 80C insurance payments if you show last year's receipt (for payments to be done in Feb-Mar)

The problem really is the mis-selling, but it doesn't seem like these mis-sellers are being arrested and being charged for fraud, or that LIC (or IRDA) is actively banning them from any further insurance activity for at least 10 years. That is really the best deterrent - tweaking laws is one thing, but can we punish offenders too?

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