Consumer forum directs chit fund firm to compensate investor

The Nilgiris District Consumer Disputes Redressal Forum has directed a private chit fund company based out of Mettupalayam to repay premium, along with compensation and case charges to an individual, after the company allegedly made a life insurance policy in his name without his authorisation.

S. Manogaran, president of the Coonoor Consumer Protection Association, which had argued the case, said that the complainant, R. Thangavelu, had invested in a chit fund company. In 2012, the company allegedly made a life insurance policy in Mr. Thangavelu’s name, with one of its sister companies, without consulting him.

When the company paid out the prize amount from the chit fund to the complainant, it withheld Rs. 15,000, stating that the money was used for the life insurance policy.

The company also failed to provide the original policy documents to Mr. Thangavelu.

As the policy lapsed a year later due to non-renewal, Mr. Thangavelu approached the Coonoor Consumer Protection Association, with whose help he lodged a case with the Nilgiris District Consumer Disputes Redressal Forum, said Mr. Manogaran.

Mr. Balachander, president of the redressal forum, directed the company to repay the principle amount of Rs. 15,000, with nine %annual interest calculated from 2012, to the victim. The company was also told to pay Mr. Thangavelu Rs. 3,000 as expenses towards filing the case with the redressal forum, as well as Rs. 15,000 as compensation.

“The ruling has served to highlight the need for investors in chit fund companies to be aware of the methods used by some companies to unduly profit off the money invested by them,” said Mr. Manogaran.

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