Got a call offering cheap overdraft against insurance? Delhi man's Rs 1.9-lakh lesson

Do you often get calls offering balance transfers, instant loans or overdraft facilities at dirt-cheap interest rates? Are you told that a large credit limit can be made available with minimal paperwork, sometimes with just one condition to fulfil?Beware. The next such call could come with a catch: you may be asked to buy an insurance policy to unlock the promised credit. And the loan or overdraft may never materialise.Delhi-based businessman Parminder Singh Sidhu says he found himself in precisely this situation. He was promised an overdraft facility of up to Rs 16 lakh at an annual interest rate of 6.5%, but was told he first needed to purchase a life insurance policy. He ended up paying Rs 1.90 lakh as the first-year premium for a policy from Star Union Dai-ichi Life Insurance (SUD Life). The promised overdraft, however, never came through.In his complaint, Sidhu described the experience bluntly: “Got scammed from an insurance company agents where i was told that i will be getting the Over Draft facility at 6.5% ROI but never got the OD account.” The individuals who contacted Sidhu claimed to represent Axis Bank. IndiaToday.in has not independently established their identities or whether they had any association with the bank.THE CHEAP OVERDRAFT PROMISEAccording to Sidhu, the first call came on July 28, 2026, from a woman who introduced herself as Ilma and claimed to represent Axis Bank. She offered him an overdraft facility of up to Rs 16 lakh at an interest rate of around 6.5% a year. Sidhu says he was told that purchasing a life insurance policy was necessary to get the overdraft approved. The policy was presented as a Rs 19-lakh plan, with an annual premium of Rs 1.90 lakh payable for 10 years.He agreed to the proposal and paid the first premium of Rs 1.90 lakh using his HDFC Bank credit card through BillDesk. SUD Life issued the policy on July 30, 2026. The policy number is 03158100.Sidhu says another individual, who identified himself as Ashish, contacted him and sought documents, including his Aadhaar and PAN details. A person named Sumit also followed up and allegedly assured him that the overdraft would be arranged in around 20 days.The callers' actual identities and affiliations have not been independently verified.PROMISED CREDIT NEVER CAMEWhatsApp conversations shared by Sidhu show the discussions about the overdraft and the insurance purchase. In one message, the initial caller referred to an interest rate of “6.5 rate of interest yearly” and said an approval call would come that day. Another message said, “aapse koi otp nhi liya jyga” — meaning no OTP would be sought from him.In a separate exchange, a WhatsApp number, whose profile displayed the SUD Life logo, asked Sidhu for an OTP. Sidhu says he shared a four-digit code. It is not clear from the material reviewed what the OTP was for or who was operating the number. The display of an insurer's logo on a WhatsApp profile does not, by itself, establish that the number belongs to the company or an authorised representative.As the promised overdraft failed to materialise, Sidhu began following up with the people who had contacted him. In one message to Sumit, he wrote: “Aaj account khulna tha OD wala” — the overdraft account was supposed to be opened that day.The exchanges show repeated attempts by Sidhu to get an update. On September 12, he said he was still waiting for a call. Later, on September 24, he wrote: “Please let me know clearly agar yeh mere saath fraud hua hai toh I will work accordingly.”He also sent messages asking, “Koi toh kuch batado” — someone, please tell me something — and “Koi bhi call nhi utha raha hai inme se” — none of them is answering the calls.Sidhu says the people who had been in touch with him gradually stopped responding after he purchased the policy. He also approached Axis Bank with his complaint, but says the bank did not pay heed to it.BE CAUTIOUS ABOUT SUCH OFFERS ON CALLCalls offering balance transfers, personal loans and overdraft facilities can sound attractive, particularly when they promise large amounts at low interest rates. But consumers should be wary if a caller makes the purchase of an insurance policy or another financial product a condition for getting a loan or credit facility.An insurance policy and an overdraft are separate financial products. Consumers should seek written details of the loan, including the lender, interest rate, charges, eligibility criteria and approval status, directly from the bank through its official channels. They should also verify the identity of anyone claiming to represent a bank or insurer.Customers should never share OTPs, PINs, passwords, CVVs or other confidential credentials with callers or over messages. Requests for sensitive documents should also be verified through official channels before anything is shared.HOW SIDHU GOT HIS MONEY BACKAfter paying the first premium, Sidhu approached SUD Life seeking a refund. He says the insurer initially declined his request, citing the expiry of the free-look period — the period during which a policyholder can review a policy and seek cancellation, subject to applicable conditions.Sidhu's argument, however, was that he had not bought the policy as a standalone insurance product. He says he was persuaded to purchase it on the representation that doing so would help him secure an overdraft facility.He subsequently escalated the matter through the Insurance Regulatory and Development Authority of India's Bima Bharosa grievance portal. After a second escalation, Sidhu says the matter was resolved and he received a full refund of Rs 1.90 lakh.“Earlier the insurance company denied to refund the amount but after raising the complaint on the Bima Bharosa app, this issue was resolved in the second try (Escalated),” Sidhu said in his account of the complaint process.The refund meant he recovered the premium, but the overdraft he had been promised was never sanctioned.IS THIS PART OF A WIDER CONCERN?Sidhu suspects that people seeking loans or overdraft facilities could be targeted through similar pitches, in which insurance products are presented as a route to securing credit. His experience alone, however, does not establish that this is a widespread or organised practice.He says he later received another call pitching a similar arrangement involving an insurance product from Ageas Federal Life Insurance. He recorded the conversation and says he could hear several people making calls in the background.Sidhu decided to speak about his experience despite getting his money back. “My only concern is that people should be aware of this scam,” he said, urging anyone facing a similar situation to lodge a complaint on the Bima Bharosa portal.“Please help in the awareness of this ongoing scam,” he wrote, adding that he could not find information about a similar case online and feared that people in need of money could be taken advantage of.IndiaToday.in has reached out to Axis Bank for a response on the alleged use of its name by the callers and whether the individuals identified by Sidhu were associated with the bank. The story will be updated with the bank's response.Lastly, the next time you get a call promising a large overdraft, balance transfer or instant loan at an unusually low interest rate, be cautious if you're asked to buy an insurance policy first. Verify the offer directly with the bank through its official channels before paying a premium or sharing your personal details. A cheap credit promise could end up costing you far more than you expect.- Ends