Customers have got fraudulent calls offering a Rs10 lakh interest-free loan from Reliance Capital when you buy Reliance Life Money Multiplier policy of Rs1 lakh premium

Fraudulent callers from Reliance Life are offering Reliance Capital’s interest-free loan of Rs10 lakh for 10 years if you pay a yearly premium of Rs1 lakh for its Money Multiplier insurance product. You may wonder how Reliance Life can make such a fantastic offer without any collateral. After all, you can just vanish after getting the loan and not pay the remaining nine premiums. Before you plan to get away after quick riches, the truth is that the dubious callers will disappear without giving you any loan once they stick you with an insurance policy of a trivial value.
 

Moneylife has spoken with these shady characters few times on the phone (011-65981239/011-65695595). The callers guided us to page nine of the Money Multiplier brochure. It says that the loan works out to 80% of the surrender value. Anyone familiar with the surrender value knows that it is usually pathetic and paying just one premium means the surrender value is zero. The caller is looking for a gullible person to take for a ride. The pitch is, “Reliance Capital interprets surrender value as maturity value of the product”. This is the crux of deceit and if you bite the bait, you will be lured into making a dud investment.
 

The caller promises that the Money Multiplier policy will give guaranteed Rs22 lakh on maturity after 10 years, but only Rs1.2 lakh will be returned to policyholder. It justifies what the brochure mentions about loan given at 9% p.a. interest rate. It signifies that Reliance Capital makes money on the loan. The justification for loan is that “to be on safer side for Reliance Capital, it is offering a loan of nearly 50% instead of 80% of the maturity value”. The caller says that the policy bond will be kept as collateral with Reliance Capital. It is to create an impression that the policy bond is of significant value even though it is worthless if you end up paying just one premium.
 

The callers, who are based in New Delhi and give their address as 13^th floor, Lalit Towers, Connaught Place, seem to have answers to all the doubts. They assure that the Reliance Capital loan will be processed within one month of the policy issuance. To make you comfortable they offer a 45-day free-look period even though page ten of the brochure clearly states that there will be only a 15 day free-look period. It’s just fraudulent sales tactics to offer something more than what the brochure clearly states.
 

If you still wonder what action they will take in case you disappear after getting the loan, their quick reply is to bring Insurance Regulatory and Development Authority (IRDA) into the picture by claiming that IRDA’s recovery department will help in case the policyholder does not pay after first premium!
 

In reality, IRDA does not have any recovery department. The callers say that your credit score will be affected and any future loan will be difficult as the RBI (Reserve Bank of India) will also be reported. They claim that Reliance Capital does not have to worry about it. They are correct with their assessment. Reliance Capital is free of any liability because it does not give you the loan promised by these ludicrous callers.
 

It is time IRDA gets tough with these fraud calls. There are susceptible customers who fall prey with brand names of big corporates. Will they get justice?
 

Here is Reliance Life’s official reply:
 

The instances of “offering Rs10 lakh insurance loan from Reliance Capital offers” are made by spurious callers, a menace faced by the industry, and not part of any mis-selling. The industry has sought help from the EOW and we, as Reliance, have also filed over 170 FIRs against these spurious callers - wherever the customer/victim/complainant has agreed to help us. Please share all the numbers that you have, with a written formal complaint (which is needed to lodge FIRs), to us so that our legal teams can lodge relevant FIRs against these spurious callers. A formal complaint, giving details of the complainant, is mandatory for filing FIRs. Please also inform your readers about the same and guide them that they can write to us at "[email protected]”, in case they get any such false offers.
 

In the second part, we will give a specific case of someone who actually purchased Reliance Life Money Multiplier with the expectation of getting a loan. Watch out for the story tomorrow.
 

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• Life insurance: Don’t fall for assured returns, look for comprehensive cover and avoid dubious agents who promise you fantastic combination plans

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