A Reddit post has sparked a debate online about how to protect elderly parents from being mis-sold financial products. In a post shared on the Personal Finance India subreddit on Wednesday, a user recounted how a bank manager allegedly tried to persuade their mother to sign up for a financial product with a 10-year lock-in period.
“Went with my mother to update her Savings Account KYC. The Bank Manager almost tricked us into a 10-year lock-in product. How do we protect our non-tech parents?” the user captioned the post.
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“My mother recently went to her home bank branch to do a KYC update and renew an old FD. Since I happened to be free, I tagged along. Out of nowhere, the branch manager invited us into his office, offered tea and started pitching a ‘high-yield savings plan' reserved strictly for senior citizens that promised 11-12% tax-free returns,” the user wrote.
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The user said the bank manager urged their mother to sign a printed form immediately, prompting them to intervene and refuse the ULIP.
“He already had pencil marks drawn on a printed form. Urged my mom to sign immediately. Trusting the bank uniform, she was about to sign. I stepped in and demanded to see the actual product brochure despite his hesitation. Turns out it was a 10-year insurance ULIP requiring a payment of Rs 1.5 lakh. If she missed one payment, heavy penalties would eat into her savings. The moment I refused and asked for an FD renewal, his polite behaviour vanished completely,” the user added.
“It was an eye-opener regarding how banks target elderly people who naturally trust branch managers. How do you protect your parents from these commission-driven traps? Is filing a complaint with the Banking Ombudsman even effective against such mis-selling?” the user concluded.
The post triggered a wider discussion about personal finance, the risks of mis-selling and ways to protect elderly family members from unsuitable financial products.
“This should be a punishable offence,” one user commented.
“Don't allow parents to visit the branch alone. And if they do, ask them specifically not to sign on any paper,” another user wrote.
“Please file a complaint with the bank's regional manager first. If you do not get a satisfactory response within 30 days, you can then approach the RBI Ombudsman. Please do not let this slide,” a third user commented.
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