The Ceo of a small unlisted company walks into a bank. The very pleasant RM sells him a ULIP. This happened in 2003. He paid the premium in 2003 and 2004..and forgot to pay the premium in 2005. Policy lapsed.

In 2005 he bought another ULIP from the same RM (surprising thing is that the RM had not changed).

In 2006 he bought another ULIP pension plan.

Total premium committed Rs. 11 L per annum.

In 2013 I told him he had been had. He not only bought wrong products, but these were heavily invested in debt and had very little equity element. Long story short, he was still in the red, without even adjusting for inflation. He could have got a much better deal with mutual funds and term insurance. Hey, hold your horses this story is not about that.

Story 2:

A man fell in the kitchen and hurt his head. He was removed to a very famous hospital..they were a little worried..but they got him admitted. They found that he had a mediclaim policy for Rs. 5 L. The hospital kept him till the bill reached Rs. 5L and then said ‘nothing can be done’ and asked them to take the patient home. They flew him to Chennai (where he stays) and in a week’s time he was up and about and the docs in the Chennai hospital apparently could not find what was wrong. At least not enough to require 1 month of ICU stay.

Another hospital in Mumbai billed a DOCTOR – his doctor grand-daughter found billing mistakes worth Rs 19000 – duplicate bills.

There is very little doubt that both the clients were cheated, and deliberately cheated by the hospital administration. Whether the doctors are involved is difficult to say, but the cheating was real.

Story 3:

A 33 year old boy gets a call. He is in USA, and his father has died in Mumbai. He has one sister based in Australia, she is also headed to Chembur, a suburb of Mumbai. They do not know too many people in Mumbai and their neighbor found them a priest. The children had one Mama who was in New Zealand and he did not attend the funeral. The father was an only son who did not keep in touch with his relatives. Son was married to an Indian settled in US, and they too had no connections. The priest charged them 20k for the rites to be done at the cemetery. He then charged them Rs. 2.1 lakhs for the other 13 days rituals.

A distant cousin from Chennai said that they were overcharged at least by Rs. 1L 

Now let us come to the facts of all the cases:

The client was told UPFRONT about the charges. Yes all the details of the Ulip are given to the clients. Most clients are too lazy or too ego driven to read it, understand it, ask about it, Google the details…..and will just sign where their agent / relationship manager ask them to sign. Ditto for the doctors and the priest too.

The client has no background to understand what is on offer, or what are their own requirements, or make any attempt to ask around about the suitability and costs.

The professional could be anybody – a housewife with good and amazing selling skills selling you Tupperware, Social events, land, houses, ulip, mutual funds, gold coins. Most of them are well trained in SELLING and all of them JUSTIFY their selling inappropriate products. It is amazing how they can justify what they are doing. Most of them are successful because of the mis-selling that they do. And they do it very well.

In my mind a well informed customer is king. It is time we stopped saying ‘a customer is king’. Not true. Only a well informed customer is king.

So see what you are buying, do you need it, are you understanding the financial or physical implications, ask around, choose your IFA, doctor, priest, after detailed research. Once chosen, Trust. Trust, but verify. Confirm that you have gone to the most appropriate person, CONSTANTLY look for conflict of interest. See how the money goes. Normally if you track the money, you will be right.

In all these cases, it is your call about who is right. The ‘professional’ or the client. The other person is of course the victim.