Tag: Real Life Experiences

How Wrong CIBIL report’s have harassed & destroyed many investors life?

Posted on by Jagoinvestor

A few years back, India was introduced to the world of “Credit Bureaus” and “Credit Scores”. Credit Bureaus track an individual’s credit history and create a report from that data. So all your financial history including credit cards, loans, the timeliness and regularity of your repayments and the number of times you have sought credit, is captured in this single report, and based on all this information a score is generated. This data is shared with lenders on request and subsequently used by them to make a lending decision.

CIBIL report Errors

On paper, this idea looks great because the system ensures that there is extensive record keeping for all individuals and the data can help lenders and banks make effective lending decisions. So far, the intention was good and admittedly with our huge population and fragile systems, there were bound to be a few hiccups along the way.

But it would seem that the amount of confusion created by the Credit Bureaus has reached unreasonable proportions.

Wrong Credit reports and how they are messing up financial lives of many

From the last 3-4 years, I have been hearing horror stories about how various financial lives have been destroyed as a result of wrong credit reports and mismatches in data. Banks are now mostly reliant on CIBIL reports for processing loan requests – they look at the CIBIL report and take the decision. But how does one guarantee that each and every bit of data recorded in the credit report is a 100% CORRECT?

There have been tons of instances where the report was wrong or had incorrect information and ultimately the consumer had to suffer a lot because of it.

  • Imagine a student who is looking for education loan and his father has applied for education loan, but bank is not ready to give loan because there is no Credit history ?
  • Imagine a family has made the down payment for their dream home and have applied for home loan , but it gets rejected because their CIBIL report has an entry for a credit card due which they have closed 8 yrs back and now neither they are getting loan , nor the builder is co-operating with them
  • Imagine a guy who is in need of personal loan, and if fully eligible for it, but could not get it just because his report has data of some one else whose name is close enough and the system has made the error ?
  • Imagine a guy following up with banks to update his data with CIBIL, then going back to CIBIL to know the status, asking 100 times about it, still not getting any clue on what is the status and finally he feels helpless and sorry for the whole system

Wrong Data in Reports

One of the biggest issues with present credit reports is the inaccuracy of data. Mostly this happens because the report is pulling data from multiple sources that might have incorrect data themselves or because of name mismatches. Even though this is a system fault but the end result is that the investor suffers.

I want to share Prabhat’s story on how his life was impacted due to wrong data in his CIBIL report.

Hi Manish,

Am a real victim of this “CIBIL”. Two years back i requested for a report. The report was full or errors- be it my name, identity, address, accounts etc. I raised a dispute form then. Since then, in that report, my name has changed thrice, my addresses have changed, my contact nos have changed. They apologised and said that corrections have been made. Recently i applied for a loan and again got rejected. When inquired and got the CIR, my data was merging with some other “Prabhat”. To confirm my doubts, i even called that person and highlighted all this in my next mail to cibil. But to no avail. You would always get a prototype reply- “We cant change data on your own and pls contact credit institution for modification”.

Ridiculous, is’nt it? First of all you sweat to get your issues registered (if only you get a great guy who happens to read your mail/ talk to you over phone by luck). Then follow the same to make them understand what is apparent to even a layman. in my case the other “Prabhat’s” pan no is different, dob is different, address and other things are also different but even then the data got merged and when i raised this, they are passing the buck onto credit institutions.

This is clearly not any fault of credit ins but of this cibil only. To be more precise- in their system of extracting data which they are not accepting. Sometimes, after negotiating so many mails and conversation with their executives, i really feel that this is being run by a bunch of nerds who would not listen or not understand your concerns. I have not taken a single penny as a loan in my whole life and now not getting loan just because of this cibil.

I want to knock the doors of law, to claim a heavy compensation- can you suggest me how and where can i lodge my complaint. I have all the evidences in black n white.

Prabhat

Here is another case of spelling mismatch

I got my CIBIL report recently. My Name is CHANDRA SEKHAR SHARMA but the name that I have found on the report is CHANDRA SEKHAR S V. It is not a spelling mistake as CHANDRA SEKHAR S V is a different person at all. But all my credit cards are listed against this name and one loan which is taken by MR CHANDRA SEKHAR S V is also showing here. So it is overall one report mixed up with two person’s information. In other word CIBIL is selling one report to 2 person.

I am going to report this dispute to CIBIL. But it is raising lot of question on CIBIL.
This CREDIT score concept hold good and easy to maintain in country like USA. They are having SSN concept where they are uniquely identifying each individual. But in our country we still to have such concept until UIN /adhar effective completely. Till then we have to face such situation .

Gap in Communication from Banks

The other problem is gap in communication with banks . The whole system is not efficient enough for speedy updates. Given huge banking system and widespread network, its bound to have communication gap. Here is one instance where Subhajit was marked as Defaulter by CIBIL , just because SBI didnt update some data from their side on a loan closed years back

I took a loan from SBI in 2004 and closed it in dec 2012. Now at present when i applied for another loan to some other bank, CIBIL marked me as a defaulter as they did not get any updates from SBI on the closure details. I contacted Chief Manager of the SBI branch from where I took the loan and asked her to send out an email to CIBIL ([email protected]), mentioning all my details and report that the loan account is closed now. Even after this was done, CIBIL is still saying that they might take 30 days untill the credit institution reverts back with their response. I dont understand whether CIBIL has a huge miscommunication between their call center folks and the email department. what do i do now?? i wanted to escalate this to the highest authority in CIBIL but i dont have any contact information for the same.

Regards,
Subhajit

Here is another case of Vijay

Hi Manish

In my report, the SBI card which I used to have was mentioned as “WRITTEN-OFF” and the Days Past Due section also had a number 120 put for the last several months ending in Sep-2006. This was definitely wrong info since I had checked with SBI in 2006 and they had informed me that there was no due from me at the time of closing the card. So I contacted SBI and they informed me that it was a mistake from their end and that they have corrected it in the latest update to CIBIL.

Then I informed CIBIL about the mail from SBI and asked them to confirm if the erroneous entries have been removed. CIBIL gives me a very vague answer stating the SBI card account is closed as per instruction. But I want to know if the word “WRITTEN OFF” has been removed from my report and if the Days Past Due section have been set to 0. I have sent them at least 3 mails asking for precise info on the above two queries. But they continue to give me very generic and vague answer.
Please let me know if there is any escalation mechanism when CIBIL gives vague responses.

Also in the score section, there is a line which states “*One or More Trades with Suit Filed Status in the Past 24 Months*”. I asked them for an explanation on what the above line meant. But they have not given any explanation. It sounds like some company has filed a suit against me in the last 2 years. I am not aware of any such suit. I am not able to get CIBIL to explain the line or tell me which company has filed the suit. I am at my wits end to get a proper response from CIBIL. Any help is appreciated.

Regards

Vijay

Using CIBIL report as a weapon

Some banks have also started using CIBIL report and its impact as a weapon against investors. They have started talking in the language of – “Do this, else your credit history will … ” (here is the proof).

Here is a what happened with Ravi

I was using a credit card from ICICI bank and I used it for about 6 months, in between I forgot to pay the due amount for one month and in the next month statement I found additional 6000+ Rs to be paid as late fees + interest + taxes that I refused to pay and deposited the amount that I was expected to pay. And after this I traveled abroad for 1.3 years and on my return from there I was called up by bank and asked to deposit 31 000 Rs against that, here again I refused to pay initially and asked them since I have not used this amount why should I pay this much. But later one gentle man from the same bank called me and said that if I will not deposit the same amount it will affect my credit history and I will not be able to get any loan in future. Hence I deposited all the stated outstanding amount at once.

But now when I applied for car loan , my loan request got rejected by the AXIS bank due to that credit card credit-history. I also approached ICICI bank for same and they immediately issued me the NOC with 0 Rs outstanding for me.and also requested them to get my name cleared from CIBIL, for this they told me that your name is already updated in CIBIL for 0 balance. I forwarded the same email to AXIS bank but still they are not ready to issue me the loan saying that I have paid the money lately after 1 year. Hence I am very anxious about it now that without doing any fault from my side I am becoming a victim here.

Your rights incase you are suffering because of Credit Beureu mistakes ?

A lot of investors who are affected by this CIBIL menace and mistakes from the banks side just feel angry, but they let things go and do not force a resolution. But you need to know that no one has any right to play with your financial life and if someone has, then they need to pay for it. If you have been facing an issue because of CIBIL or the bank and it has impacted you financially or mentally, you should always reach out to the consumer court or banking ombudsman. There have been many cases where customers have got some compensation. The only catch is that you need to be committed to pursue the case and have patience.

Here is one instance where a person was awarded compensation because was mistekenly marked as “defaulter” by the bank and suffered due to this

City residents continue to be hassled by the ‘CIBIL defaulter’ tag over minor disputes with banks. Now, a Sector-39 resident received justice from the UT Consumer Disputes Redressal Forum after a private sector bank had labelled him a defaulter and sent his name to Credit Information Bureau India Limited (CIBIL), an all-India data bank which carries credit history of all commercial and consumer borrowers.

The Chandigarh Consumer Disputes Redressal Forum has directed the bank to pay Rs 10,000 to the harried complainant, and Rs 5,000 as cost of litigation.

The order was issued by the Forum following a complaint filed by Bhajan Palm who told the forum that in 2003, he took a personal loan of Rs 66,000 from the bank, and repaid it in equal monthly installments.

Here is another instance where HSBC was fined for adding the name of a person to defaulter list without strong reason

Hongkong and Shanghai Banking Corporation (HSBC) has been ordered by a consumer forum here to pay Rs 20,000 as compensation to one of its credit card holders for adding his name in CIBIL’s defaulters list even though he had paid all his dues.

While awarding the amount to the HSBC credit card holder, the New Delhi District Consumer Disputes Redressal Forum said the Bank should have “gracefully” accepted its fault instead of adopting an “obstructionist attitude” by seeking rejection of his complaint.

You can read some more cases here or here .

Below is a 2 part video series from MoneyLife Foundation on “How to file effective complaints and win your battles in Consumer Courts”

Can you share any experience of yours on CIBIL mistakes or any struggle you faced ?

Also let me remind you of the ‘Oh my God’ offer coming on 7th Jan 2014, which you will not like to miss at any cost. Its one of its kind of offer coming soon !

The Shocking story of – How LIC policy was surrendered using Forged Signature

Posted on by Jagoinvestor

Can someone else surrender your LIC policy and take the money ? I know you have never ever thought this can happen, because this looks so impossible, but I want to share an incident with you all which happened with Muthu (name changed), who is one of our jagoinvestor reader.

insurance fraud surrender

One day, Muthu came to know that 3 of his LIC policies were surrendered by someone else and the money was utilized. He came to know about this only when he got pre-closure letter from LIC for his 3rd policy. Below is the full sharing from Muthu –

Hello All,

I was shocked to know that someone has used my identity (signature) to surrender my LIC policies and utilized that money for their benefits.

  • Firstly, my policy # 363934899 was forged and surrendered on 29.01.2013, for which LIC has issued cheque # 926895 dtd 29.01.2013 amounted Rs. 49795/- without my knowledge or consent.
  • Secondly, my policy # 363934900 was forged and surrendered on 29.01.2013, for which LIC has issued cheque # 926894 dtd 29.01.2013 amounted Rs 49795/- without my knowledge or consent.
  • Thirdly, my policy # 364340197 was forged and surrendered on 07.10.2013, for which LIC has issued cheque 959220 amounted to Rs 35645/- without my knowledge or consent.

I came to know about this when I received pre-closure letter from LIC after surrender of my third policy # 364340197. Immediately I raised written complaint to LIC about policies forgery on October 29, 2013. Further to my complaint, LIC recovered forged amount from the concern person and sent a covering letter along with the 4 cheques to me for the forged valve but not specifying the forged person name on the covering letter.

This incident raises some questions which are –

  • When the initial cheques was issued in my name, how the money has been utilized by someone else.
  • Even though requesting, LIC not mentioning forged person name in the covering letter after recovery of the forged amount.
  • Did LIC filed FIR against forged person? If not why?

Who did this Fraud ?

When I came to know about this incident, the first thing which came to my mind was that it was some “insider” from LIC who did this, because its almost impossible to surrender the policy without producing the original policy document, forging the signatures and then redeeming the cheque in your own account. But the truth is that the fraud was not done by anyone from LIC office. Then Who ?

It was his Mother and Younger Brother !

Shocked ! ?

Let me now share in Muthu’s words how his mother and younger brother did this fraud.

The Fraud was done using “re-cycle” procedure

Here is exactly what Muthu shared about the fraud procedure

Dear Manish,

Since the bond was in my mother custody they surrendered that policy with the forged signature (read more about Identity Theft)

When the cheque was issued in my name, LIC agent by name Yeshoda has given a cunning idea to re-submit the cheque received in my name to LIC and another policy to issue for the same value for different name ( This process is called re-cycle procedure).

Finally once the policy has been issued in their name. They can easily surrender that policy and utilized the policy amount.

This is worst ever experience that money can change “ANY ONE”.

Do you have LIC policy ? Are you sure this same fraud can not happen with you ? How will you prevent it ?

The Journey of 10 part Plan F show (and youtube links)

Posted on by Jagoinvestor

In this post we want to share our great experience till now working with CNBC 18 and DSP BlackRock Mutual Funds team on the show Plan F. We have been involved with the whole process from start. Me and Nandish keep going to CNBC Office every alternate week to shoot for our part which comes at end of each episode.

Shooting of CNBC show plan F

What you can learn from Each Episode ?

All the 10 episodes have been aired and we have got all kind of reviews about them, what was good, what could be improved, which part audience are liking and what they are not liking. I tell all of them that no one episode can fit someone’s expectations, but it surely has deep learnings for everyone. In one way or other one can surely learn from each episode’s. I am not talking about the numbers discussed or their portfolio, but from each episode’s case study financial life journey.

For example – in 5th episode, Mr Subodh Khare shares how he wants to make his daughter financially wise and wants to give them around Rs 50 lacs so that they can shape their life from there in a more powerful way.

In 2nd episode Sreekumari shared how she is operating from Financial Freedom and how she has already taken so many right decisions.

In 3rd episode Ramakumar shares, how all his life, he used 2nd income in family (his spouse income) only and only for saving and now he is almost financially free.

If you look at each episode, write down what is that one learning you can draw from the episode and you can take some actions to improve it. If you listen to IFA’s, they analyse the portfolio and give some 2-3 core insights they can think about. Either Me or Nandish give 3 tips of the week for all investors which you can apply to your financial life.

Episode 1 – Ramesh Jalan

Watch the first episode, where Mr. Ramesh Jalan talks about his investment journey with financial experts Sumeet Vaid (MD, Freedom Wealth Solutions) and Vijay Bhushan (Partner, Bharat Bhushan & Co.)

Episode 2 – Shreekumari Dholakia

Watch the second episode, where Ms. Shreekumari Dholakia talks about her investment journey with financial experts Lovaii Navlakhi (CEO, International Money Matters) and Surya Bhatia (Managing Partner, Assets Managers)

Episode 3 – Ramakumar Poothrikovil

Watch the third episode, where Mr. Ramakumar Poothrikovil talks about his investment journey with financial experts Ramkumar Barchha (Premium Partner, Ramkumar H Barchha) and Ashish Shah (MD, Wealth First Portfolio Managers)

Episode 4 – Himanshu Jain

Watch the fourth episode, where Mr. Himanshu Jain talks about his investment journey with financial experts Suresh Sadagopan (Founder, Ladder 7 Financial Advisories) and Brijesh Dalmia (Director, Dalmia Advisory Services)

Episode 5 – Subodh Khare

Watch the fifth episode, where Dr. Subodh Khare talks about his investment journey with financial experts Ashish Chadha (CEO,Chadha Investment Consultant) and Pallav Bagaria (Proprietor, Brand New Day)

Episode 6 – Sanjeev Singh

Watch the sixth episode, where Mr. Sanjeev Singh talks about his investment journey with financial experts Hari Kamat (Proprietor, Investment Avenue) and Ullas Shah (CEO, Madhuvan Securities)

Episode 7 – Kavita Sharma

Watch the seventh episode, where Ms. Kavita Sharma talks about her investment journey with financial experts Ranjit Dani (Co Founder, Think Consultants) and Krishnakumar Desai (Chief Investment Advisor, Sri Kotyark Investments)

Episode 8 – M Subrahmanyeswara Rao

Watch the eighth episode, where Mr. M Subrahmanyeswara Rao talks about his investment journey with financial experts Gajendra Kothari (MD & CEO, Etica Wealth Management) and N Krishnan (Director, Value Invest Wealth Management)

Episode 9 – Shefali Doshi

Watch the ninth episode, where Ms. Shefali Doshi talks about her investment journey with financial experts Mrin Agarwal (Founder, Mr investment) and Deepak Chhabria (CEO & Director, Axiom Financial Services)

Episode 10 – Cyrus Broacha & Ramesh Damani

In the Plan F finale (10th Episode), watch the key principles of investing that regular investors can implement in their investing strategy, summarized by the renowned market analyst and member of BSE, Ramesh Damani. These principles have been extracted from the many case studies that were featured over the course of the Plan F season. Also, watch the tables turn as Jagoinvestor takes on the role of the inquisitor, interviewing Cyrus Broacha on his personal finance journey.

Share about your views on Plan
Can you share your learnings from various episodes of Plan F ? Which were the points you learned and have started applied in your financial life ?

How EPF Fraud of 100 crore was done from Inactive accounts?

Posted on by Jagoinvestor

In the last few days, there is news that some EPFO employees have done fraud and siphoned off Rs 21 crores from some EPF account.

How was this EPF fraud done?

So the fraud was done on those EPF accounts which belonged to small companies which are inactive from 2006 and there were some checks and balances which were not done for those old accounts. Another thing they did is that they only withdraw 2-3 lacs because it does not for any kind of audit (it happens above 5 lacs withdrawal).

This was done by few employees of the Mumbai office and one of the clerks was the mastermind for this. Around  8 people have been suspended already and it points out that a bigger fraud may be in place. More investigations are going on right now!

Apart from the above recent incident, I also want to share with you some more incidents which have happened in past.

I am going to share some startling facts today about EPF Frauds that have recently come to light and have been written about and highlighted in the press. And it is highly likely that some of you who are reading this article might be victims of this fraud – just that you are unaware of the fact at the moment.

Fraud Withdrawal’s from EPF accounts

Sanjay Kumar is the Chief Vigilance Officer at EPFO and on 7th Oct 2013, a circular was issued to all the EPFO establishments of all regions in the country with the subject- “Fraudulent withdrawal from the account of EPFO by furnished forged statutory returns”.

The letter talked about scammers making fraudulent withdrawals from various EPF accounts by submitting forged bank accounts and KYC details/documents. It also mentioned that EPF officials had colluded with these scammers and helped them withdraw money from Provident Fund accounts – especially ones that were inoperative (no activity on those accounts) and/or where the employer no longer existed (closed or shutdown).

I have paraphrased below important excerpts from the circular

Point 2. The investigation has revealed that the fraud was committed mainly in respect of those establishments where remittances had not been received for many years, records not updated and the establishment had not submitted statutory returns. Further no pre-coverage or post-coverage inspections were carried out of the firms and no claims were received or settled since long,” it said.

Point 3. The investigation has revealed that the fraudsters had submitted forged/fabricated returns viz . Form 3A/6A, 9(R), Specimen Signature Cards and therefore, Submitted fictitious claims in the name of original members of non-members. The claims were settled by putting pressure on dealing hands/office by all possible means.

You might be aware of multiple cases where investors face a slew of obstacles while withdrawing their Employee Provident Fund money. At times, it takes years before they get any status of their EPF money and even when a payout is made, cheques go missing or are sent to the wrong address. So, it doesn’t require much imagination to see how in the wrong hands the cheques can be cashed simply by opening a fake bank account.

Here is an incident where an EPF investor faced the issue

Preliminary investigations revealed that there had been huge withdrawals and transfers of money from the individual fund accounts of a number of school employees without their consent and knowledge,” they added. “An FIR was registered and investigations were initiated by a special investigation team. During the investigation, it came to light that funds were withdrawn by the treasurer of the school by forging signatures of the principal and staff members,” police said.  (Source)

Some Numbers

To put things in context, we are not talking about a few isolated fraud cases or few crore rupees here. The actual scale of the fraud is mind-boggling and will cause you sleepless nights.

Consider this – as on April 2011, there were close to 8.15 crore EPF accounts, out of which 3.14 crores EPF accounts were dormant with a balance of close to 16,000 crore rupees. Of these 3.14 crore dormant accounts, 2.5 crore accounts had a negative balance, which meant that they did not have any money in them (money had been totally withdrawn!).

EPF withdrawal fraud on fake names

How does EPF Fraud work?

Let’s talk about the modus operandi of the fraudsters in detail, so that you can understand the loopholes in the EPFO system. Note that this whole fraud is highlighted mainly for dormant accounts, especially those where the employer does not exist now. However, it would not surprise me if frauds started to happen even on active accounts anytime soon.

So here are the steps that are taken by fraudsters

Step 1 – Identify a dormant EPF account

The first step is to find out all the details of the dormant EPF account. If you have some money to spend on bribes or lots of time and patience to search the Internet, you can get all the information you want. The Internet abounds with people who have given their EPF numbers, names and addresses without realizing the risk they are exposing themselves to.

Also if you have the money, you can quite easily bribe officials and get information. A dormant EPF account is one that does not get any fresh contributions for 36 months. At times the employer depositing the money in the EPF account closes operations and now the EPF account is totally orphaned and the money is sitting idle.

The EPF holder is either in another job waiting for that perfect moment when he will start the withdrawal or transfer process or he is working outside India and has totally forgotten to take action on his EPF account. It may also be that the money in the EPF account is such a trivial amount that he/she does not bother to do much about it.

Step 2 – Open a bank account with Forged details

The fraudster’s next step is to open a bank account with forged details and prepare a PAN card, address proof etc. In an environment, where obtaining fake passports or completely forged educational degrees is child’s play, it’s no stretch to assume that it would be easy to get fake KYC documents made.

Step 3 – Apply for Withdrawal of Claims with forged identity

After all the documents and identity are set, one just has to fill up a withdrawal claim while posing as the target of the intended fraud. If the company depositing the money in the EPF account is now non-existent, then EPFO relies on the bank branch to confirm the authenticity of the bank account (as per the Livemint article)

In any event, the structure of EPFO is not centralized i.e. each state has its own EPFO department and things are controlled locally. Therefore there are different EPF account numbers for the same person and different EPF accounts opened at different intervals. Even the process followed at each step is not extraordinary but rather the same old rotten way of doing things.

If there are issues at some stage, it has been found that insiders have been influenced and helped to pass the claims (as per the EPFO circular itself). There is no wonder that bribes are given and taken and things are bent. Here is proof below

The RTI reply also revealed that at least 1,350 EPFO employees have had corruption charges against them in the past five years. Of this, 450 are from the officer grade. Most of these officers have been accused of misusing power and colluding with companies to turn a blind eye to their wrongdoings. And every year, more and more such officers are coming under the scanner.

Confirming the trend, DL Sachdeva, a member of the EPFO board, said it would be next to impossible for any company to siphon off money without the help of EPFO officials. (Source)

EPF fraud modus operandi

What you should do now?

If you have an old EPF account that needs attention, you should ensure you withdraw the money or transfer it to your current EPF account. Make certain that you only have one single active EPF account running.

Do not leave it unattended for extended periods or else be ready to face unpleasant surprises in the future. If you need any information or need to move things forward, use the RTI application to the EPFO department and things will move quickly. Also, make sure you take general precautions like not revealing your EPF number and other details in public without a strong reason.

Please share your views on this topic and EPFO in general in the comments section below?

Taking Personal Loan to help a friend ? How it can impact your financial life ?

Posted on by Jagoinvestor

“Friendship is Forever” – One of the best relationships in this world is Friendship . You are close to your friends  more than your relatives or in some cases even family members. You can go miles to help your friends, spend time and effort for them or even help them financially at times. But there is difference between helping a close friend and any friend.

Personal Loan for friend

Some investors are very casual about their financial decisions which they take for their friends or any relative who is not very much close to them. Its the social pressure or the want of “looking good” in front of others which leads to this situation. Now I do not say that you should not do favors for your friends . Even if you are having some loss, its fine at times to help your friends financially , but just make sure you are aware about its impact on your financial life. It should not happen that you repent it later and regret it. For example one of the mails I recently got was this

My friend is in need of Rs 10L and i am planning to give him money by taking personal loan and going to collect interest which i am going to pay for personal loan. In this case i have not got any profit. Will there be any tax for interest collected from my friend. (source)

This guy was going to take a personal loan for his friend on his name (or swiping credit card and taking cash later from friend) and collect the EMI part from friend and pay it back . Now it was a help because the other friend might be in need of money and being a good friend he was helping. But the problem was that he was not aware what it could mean to his financial life.

Impact on Credit Report in this case !

In this case , if you see there will be a entry in his CIBIL report about the personal loan part and being a unsecured loan, its not a very positive thing on someone’s Credit Report . Now what if after 2-3 yrs he needs a home loan and the lender does not want to lend him because he has a personal loan on his credit report ? The assumption is that friend will pay the EMI to him on time , but what if the friend loses the job ? What if something happens to friend like accident or sudden death?

What if loan is not repaid on time and then your DPD sections on Credit Report is messed up . The impact of this on the loan eligibility will be high and one will really regret it later, but then it would be too late. Below are some more experiences of lending to friends and relatives and then suffering later …

Hitesh shares his personal experience

Yes. I have helped a friend in his financial down for continuous 3 years.I have taken personal loan for him on my name which is still running and he does not pay EMI regularly (but I do).Because of delay in getting EMI’s from him my financial situation got worsen by months.

Above all that i have given him money very frequently and all my plannings went on toss. Because of friendship i have been digged down under as i have not got full money back yet. Personal loan taken will end in November 2014.

I want to apply for home loan next year i.e March 2014 and after reading this i am in very uncertain state though i maintain a cibil score of 720.

Brundaban shares his experience..

I’m also a victim of this painful personal loan lending to a friend. In 2007 i gave a friend 10lakh as personal loan, everything went on smoothly, but after 6 months the real drama started, he didn’t pay the EMI in time so i had to pay penalty with interest, sometimes i used to pay from my salary, it was totaly difficult for me to pay the EMI as it constitutes 70% of my salary then, still i was getting frequent calls from banks to pay.

When i opposed he didnt pay the loan, switch off his mobile, even told he dont know me,so i thought that i wont pay now, then stopped payment, and after going to his home many times he agreed to settle the loan, and finally settled on 2010, with a condition that i’ll pay him 2 lakh, even i did that, still i’ve not recovered the same amount from him, now if someone even ask me for 5K i think 100 times, bocz of this situation, so suggest friends dont give any personal laon to anybody!!!!

Divya’s experience

I have the experience-its painful. My brother gave 7L rs to his close friend. he did not take it from his pocket-he has taken two loans, and gave. and one fine day, he committed suicide, reason- the friend ditched him. He did not bother about the money-what bothered him was the breach of trust that he had in his close to heart friend.We lost him. his wife and kids are orphaned. Never help anyone out of your way. we can make up for the money lost- but the person we lost, we can never get him back.

Sivamohan shares his experience

Some years back my father helped my uncle my getting him some loan from a local lender(at very high interest) and by becoming a guarantor for his son’s educational loan. My uncle was not able to repay the loan and my father ended up paying the principle and interest. And since this incident our family relationship has become very sour. Recently my father received a letter from the bank saying his son hasn’t paid the educational loan back. We often wonder all things would have been fine if my father had just said no.

What other casual decisions investors taken for friends ?

  • They become guarantor for their friends without understanding its impact – Read more about it
  • They transfer money to and fro to each other accounts, without understanding its tax implications – Read more
  • They handover their important documents to friends without realising how they can be misused by someone if the intention is wrong – read more about it
  • Lending them money and not asking it back thinking that relations will soar – But the point is if you do not have space to talk freely about asking money back – the friendship is already on the rocks then !
  • Buying financial products from friends who are agents or brokers and then paying the premiums for useless products for years and destroying your wealth creation process.

At times, you do not have a choice, but to go a ahead and help a friend even if it means some problem for you, thats fine . But in cases where the other party can be said – NO , or the impact of your decision on your financial life can be bad , which you can not afford, you have to think hard and take tough decision

Have you done any financial help of friends and what do you think about it ?

Beware of Fake Email Scams asking for password & Critical information – Its a trap !

Posted on by Jagoinvestor

Some days back one of our readers forwarded an email to me, which he got in the name of SBI Bank and it was about some new scheme or feature launched. All he had to do was login to his account by clicking on the LINK given inside the email. He asked me over the email if this mail was genuine or fake ? You can see the snapshot of the email below.

Fake Email on SBI bank

I looked at the email and instantly sensed that this was some kind of fraud email, just to get hold of the login details of the mail receiver. In this article I want to cover few points which will teach you more about these kind of fake emails and some important points, so that you are not duped in future and are alert.

3 common things you will notice in Fake Emails

There are few common traits of most of the fake fruad emails you will recieve, you should notive these 3 points in those emails.

1. The email id used looks authentic, but it’s NOT

One of the most common trick used in fake emails, is that the email id used by them looks very authentic, but if you enquire a bit about it, you will find out that they are fake and just gives an impression of being authentic. For example , if you get an email from SBI Bank and the email id is “[email protected]”, at first you might get fooled that the email is really form SBI bank, but if you go to google and and search for SBI Bank website, you will come to know that its sbi.co.in or onlinesbi.com, but the email has come from a different place. You should check the website of the fake email id (in this case – sbi-bank.com) and you will come to know that either it does not exist or looking at the website, you will figure out that its Fake.

I can share a real life example of this. My brother faced this fake email some months back. He was searching for a job and he got an email from Larson & Toubro company, that his resume was shortlisted and he has to attend an interview, but he had to give a security deposit of some amount (around Rs 8,000) which he will be refunded back after the interview.

The moment I heard this, I knew this is some fake email, because no company asks anything like that. I asked him to search for larson & toubro website and  it we landed on www.larsentoubro.com/‎ . However the email came from profile@larsentoubroltd.com/‎ (extra ltd word in email), when we went to that website (the fake one) it did’nt exist. When we searched on internet about it, we got so many threads about about it and how they lost money.

Given our country has so much of unemployment, and so many people are looking for jobs, its easy to dupe them and run this kind of rackets. Infact people make millions through these kind of fake emails. Below is the email which my brother got for interview, you can notice how unprofessional the email sounds.

Fake email for Job Offer india

Note – Many times, you will also receive emails coming from the original sites and web-address, but even there is a trick for that, if you use 3rd party email sending software’s, you can fake your email id. You will notive in your email that the mail came “via” another server.

2. The target website link inside the email does not look authentic

A lot of times, inside the fake email you have a link to click, it takes you to some target website and you have to fill some personal details. In reality, the website is a fake one, which looks real visually, but on the backend its a fake one. This is called as PHISHING Trick, which steals your important login details and misuse later. So always make sure that you have all the important links written down or saved as bookmarks in your browsers.

3. The mail asks for PASSWORD or some critical information

If you see all the fake emails, one common thing you will notice is that these emails scare on some point and create some kind of emergency. It can be regarding some new change, new scheme, last date for something, It might say that the server was compromised and they are just asking for proof and things like those.

Always remember that banks or institutions do not ask for these kind of things over email. Passwords are never asked by anyone over email for sure. At times fake emails use name of RBI and Income Tax department so that people take it seriously because there is some kind of fear attached with it (ohh …. its email from Tax department, better I take it seriously). Checkout the Video below which explains about the RBI Email Scam !

Common Traits of the Fake Emails and the Websites

If you look at the fake emails and their websites (the link inside the email). You will notice that they have very bad grammar, no professional look and they ask for some stupid thing to be done which does not look natural. Like some of your friend in Hawaii, who is robbed and now needs $400 to come back to India and will give back your money later, such kind of emails come from hacked emails of some of your friends.

Also check – FAKE Calls on name of IRDA

When do Fake Emails Arrive ?

These fake emails can come anytime to you, but note that the frequency of mails increases, when some important event is nearby like income tax season, or income tax filing season or when some major law has changed, so that people can relate to fake emails.

What’s your thought on this matter and have you ever got an email asking you to click on a link and provide some critical information? And what did you do in that case ? Can you share ?

How Identity Theft can leave your financial life paralyzed !

Posted on by Jagoinvestor

I do not want to sound like a scaremonger, but it is possible that there is a personal loan or a credit card taken under your name by someone else and you are completely unaware about it. I know you must be thinking that I wrote that just to pique your interest in this article and give a good start to this post, but trust me – I am not kidding, I ACTUALLY mean that it might be the case. There is a huge possibility that someone has taken a loan by using your documents and KYC Documents and you will come to know about it only years from now.

This is called – Identity Theft

identity theft documents cibil

4 Measures to Avoid Identity Theft

  • Do not handover your documents to anyone without strong reason. There are many cases where someone trustworthy has used the documents for wrong usage.
  • Always Write the purpose on the Documents itself. If you are giving your document for Home loan purpose , write down “ID PROOF – FOR HOME LOAN at HDFC BANK – Should not be used for some other purpose” .
  • if you have given your documents to some one for some reason and they are not used, take them back.
  • Whenever you are getting xerox or giving your originals to someone, dont just be very casual and better be a little careful about whats going on

Two real life incidents on Identity Theft

Praveen shares how his cousin got a credit card using his documents

There is a credit card on my name which was taken on my name without my knowledge by one of my cousin who used to work with Barclays Credit Card Company at that time& was also a freelancer for some other banks. So at that time (2008) I signed few personal loan forms with him & which I took it for my personal purpose, but I was not aware that I also signed a form which was for Barclays Credit card and which was used by my cousin.

All this matter came to lime light recently only when I re applied for credit card & home loan, both got rejected because of poor credit score (573), we had a big fight in our family, finally he agreed to return the actual amount of the credit card which was Rs.23000 at that time, but now in my cibil report it showing as Rs.44000 amount due. Now it’s my headache to clear my cibil report, so I’m ready to pay remaining amount due from my pocket

Akash shares how his CA misused his identity and broke his trust

I follow CIBIL v diligently and regular take out my CIRs and score. My last score (1st August 2013) was 806 with 1 settled secured loan a/c. i have one PL running for last 8 months with only bounce (which was paid up within 15 days). I had applied to the same bank for a top up. Now the bank has come reported about the existence of a 2nd Pan Card with a score of some 400+ and also default on 1 PL and CC. The bank also informed that there were other PLs but all closed. I had received a PAN Card from my CA (who is my 1st cousin) who asked my to kindly apply me to close it was a duplicate wrong card which i duly did some 6 months back with NSDL.

On getting this report from the bank i figured out the the no was same as the cancelled card. Morever my cousin admitted to having used my PAN card and payslips to get the wrong card made and take PLs and CCs. As he was my CA he had all relevant papers like payslips and bank statements with him. However he has now committed to close all O/S within this month. My queries is how do i get the CIBIL report in the wrong PAN closed and all reporting transfered to my existing and authentic PAN card ? Any other solution

Conclusion

Always remember that prevention is better than cure. You can take the matter of identity theft casually, believing it will never happen to you. But once it does, it can severely affect your financial (and personal) life and you might find yourself stuck in a situation, which you want to get out of as soon as possible.

10 tricks you can play to avoid unwanted marketing calls from Financial Companies

Posted on by Jagoinvestor

We all get unwanted calls related to credit card, insurance plans, newly launched policies, to upgrade our prepaid connection to post paid and god knows what all. I am generally regarded as a “super-cool” kind of guy within my group, these callers even try to break that good part of me. However, over the last few years, I have realized that no matter what you do they still come back to you with full dedication.

Tricks to Avoid Unwanted Marketing Calls

When I posted one simple trick on my facebook wall to get away from these calls, people connected to me reciprocated back with few other tricks which they try to shoo away marketing calls. Let me share those with you, so that next time you get that unwanted call asking you for making some investments or taking some policy or whatever reason, the chance they will leave you for next few months increases.

10 tricks to avoid Marketing Calls

Before I share those simple tricks with you (which are actually shared by others with me), I want you to know that the callers will only leave you when they come to know you are a “worthless guy” or you irritate them to the core.

Trick #1 – When you get a random call from banks, insurance companies for “a special offer only for you” . Tell them – “Sir, I lost my job yesterday” . You will instantly become UNTOUCHABLE for them .. and they will leave you in peace (for some months at least)

Trick #2 –  And if a life insurance agent calls I tell them my wife is a LIC advisor. In my case, he blacklists it immediately. There is no second call

Trick #3 – I just put my phone on loudspeaker mode and keep it aside…I put in an ok intermittently… finally the other person gets bored and hangs up…!!! Donno if the job lost trick would really help, but I would listen to the offer for sure !!!

Trick #4 –  I just say I’m not interested in marketing calls and request them to add my number to their blacklist. Again if someone calls me with same request I threaten them saying I am going to raise a complaint. This has worked well for me.

Trick #5 – Once I told them this is a police officer and a body is in front of me. have u killed him/her ?

Trick #6 –  I got a call from ICICI Bank selling credit cards. I denied and he asked for a reference. I gave him the mobile number of their CEO whose contact I had from a meeting 2 yrs back

Trick #7 – When they ask “How are you today?” Tell them! “I’m so glad you asked because no one these days seems to care, and I have all these problems; my arthritis is acting up, my eyelashes are sore, my dog just died.”

Trick #8 – If they say they’re John Doe from XYZ Company, ask them to spell their name. Then ask them to spell the company name. Then ask them where it is located. Continue asking them personal questions or questions about their company for as long as necessary.

Trick #9 – Tell the telemarketer you are busy at the moment and ask them if they will give you their HOME phone number so you can call them back. When the telemarketer explains that they cannot give out their HOME number, you say “I guess you don’t want anyone bothering you at home, right?” The telemarketer will agree and you say, “Now you know how I feel!”

Super Trick #10 – Tell them – “Wait a minute, can you hold on for 10 sec … and then pass it on to your 2 yrs old kid and ask him to talk to Uncle”.

Watch this youtube video below ( and you will get some good ideas on what to do?

Ashish shares his incident

Also it reminded me my interesting conversation with one of the tele caller, when she called me to ask if need Credit card from her bank .. I was going to railway station in my office cab and was getting bored in cab as it was not my usual cab route when this call came on my cell.. I listened and interacted very carefully what she had to say for trying to get me signed for credit card.. Replied all her queries about salary, work info, company info etc without allowing her to realize that all details were fake .. then she explained what all documentation was required in order to apply for this credit card.. I then asked her many questions which made her believe that i am really interested.. However she got shocked for my reply when she asked me: Sir, when shall i send my executive to collect all the documents?
I replied in very sweet and simple voice: Next year M’am :P .. She took a pause for few seconds before she realized what had happened, then she said thank you (in frustration) before disconnecting the call …

I was on speaker phone for this conversation and I did not realize that my colleagues were listening my conversation with this lady, until, they all burst in to laughter listening my reply for her last query ..

I made sure that i stretched this conversation for at least 40 mins so i could cover most part of my destination :) ..

Link

Pramod shares his daring incident

Once I get a call from ICICI to buy insurance (ULIP) though I did not want to buy but I was free so to pass time I asked the girl why should I buy insurance. Her reply was that you can save for my children and if something happens to you then your wife & kids will get money. She told me that it is a must for married men to buy insurance. Now it was my turn I told her that I am unmarried (I lied ;-) ) so she said “aap shadi to karoge hi to insurance to reqd hi hoga” I asked if she was married on which she said no. Then I asked “Madam aap mujh se shadi kar lo. Engineer hoon, 6 Foot ka jawan hoon, Kamata bhi hoon. aur tab mujhe insurance bhi chahiye hoga” Shockingly she said “Sir, why are you joking.” I said “no! I am serious. It’s a win win situation. Mera ghar bas jayega aur aapki policy bik jayegi. So when can I meet your mother? ” She put up the phone & since then I have got no call from ICICI.

Link

Sunil Date shares his amazing incidents

I got a phone call asking me if I required a loan. (Old days not now). I replied ” Yes I am intrested in intrest free-non refundable loan. ” Unfortunately the poor thing could’nt understand the joke.

I got another call from a tele caller. She ” Sir your number has been selected by a lottery and you are invited to such & such hotel on ..at .. for a presentation. And a free gift is awaiting you”. I ” If you want to give me a free gift then why don’t you visit my office and give it to me ? I will visit the hotel for the presentation after seeing the gift” .

I got another similar call . She “Sir you number has been selected by a lottery and you are invited to such & such hotel on ..at .. And a free gift is awaiting you.” I “Will you be there ?” She flustered ” No sir. My boss will be there” I ” Then I am not intrested”.

Link

Note – We understand that marketing calls are made by people due to their job and target pressure. We in no way disrespect them or trying to make fun of them. With this post, we just want to communicate the pain the other side goes through and few tricks shared by others to avoid those unwanted calls.

Do you have any incident to share with us?

4 reasons why you should avoid Health Insurance policies from Banks with cheap premiums !

Posted on by Jagoinvestor

Do you come across health insurance policies from Bank with surprisingly low premiums and with amazing features and benefits, which makes you feel you should not miss this offer? Today I will give you good enough ideas about those health insurance policies and will help you understand the limitations of those health insurance policies from the bank and why you should avoid them in most of the cases. Let’s start.

Health Insurance from Banks

Background about Health Insurance policies offered by Banks?

All the health insurance policies offered by banks is mainly a group of health insurance provided to all their banking customers in association with some external general insurance company. What happens, in this case, is that a health insurance company approaches a bank and tells them that they can offer a specialized health cover to all their bank customers with lots of benefits with a small premium. The best part of these policies is that there are no medicals involved, there are fixed premiums for all age group customers, very low premium, etc. On the first look, you will not even believe that something of that kind can exist.

But there is always another side of the situation and now these policies despite looking amazing to have lots of problems and limitations which you should know and then take the decision. Let’s check them one by one

1. Depends on negotiations every year

Health insurance policies provided by banks are actually an outsourced thing. So if you buy it from bank A, then actually its a policy from Insurance company B, the bank is merely an intermediary. As this policy is a group cover, the policy premiums and all the featured are going to be negotiated on a regular interval like each year or twice a year. Now the problem is that if the health insurance company feels that the premiums should be revised (for whatever reason), then banks can’t do anything and the only customer will suffer here because he did his long term health insurance planning with this policy.

The premiums of the policy can rise like anything in the future because the pricing of the product is very flawed in most cases because banks do not have much experience in the health insurance domain.

In absence of the right expertize with most Banks, the pricing could be majorly flawed. Though there are no published figures available, our sources at some Insurance companies say that it is an incessantly “bleeding portfolio”. We believe, any contract, in any field, which is not win-win,does not work in the long term.

2. Chances of association breaking in future

What will a customer do if the association breaks between the bank and insurance company in the future? Health care costs are increasing and its always a good thing to get your self insurance as soon as possible, now if after 5 yrs of running a policy suppose the association breaks, a customer will be left into a situation where he has to again find a suitable policy and who knows if he has developed some illness in between these 4-5 yrs, who will cover that. Here is a real-life experience from Ketan shah on the forum, see how he suffered when something similar happened with him

Dena bank 5 Years back came out with Scheme in tie up with Oriental Insurance for providing mediclaim at highly attractive premium i.e. Rs. 7000 for 5 Lac cover.

We hold various accounts with dena bank and as per their tie up we got ourselves covered (5 Policies) after paying 2 years premium, when the 3 rd year renewal came we were informed that the tie up with Oriental is no more there and the same policy will be transferred to United India Insurance for same Premium..

Now we have paid 2 years premium with United India and the 3rd year Premium we are informed that Dena Bank has increased the Premium 2 -3 fold for policies…

Now trusting Dena bank and paying 5 years of Premium which comes to almost 2 Lacs we are stranded and forced to pay high Premium for my parents and now we are in a fix If we don’t pay and we cant even change the company since parents are 65 +

we were assured that the scheme shall continue since it is bank tie up and therefore we got our previous pvt policy cancelled which had a very High Premium for my Parents (20000 for 5 Lac)
Please advice if we can approach IRDA for the same…

3. Limits on renewable age

Health insurance is a long term financial product and should always be bought with very long term benefits in mind. Having a lifetime renewal option is not just a wish, but kind of must-have feature in your health insurance policy and that’s where these policies from banks fail. They all have a limitation on the renewal age in most of the cases.

Even if the premiums are lower, what will you do sometime in the future when you really need that policy and it shuts the door for you.

4. Pathetic “service” issues

The service provided at the time of claim settlement is really a big parameter. Now if you have bought it from the bank (here bank is the agent), there is no “person” or “company” to help or assist you at the time of claim settlement? Whom do you mail? Who do you talk to? Who will you catch? Who will you blame? The bank due to its size and nature will not entertain you in a proper manner.

Also being a group policy, it some times gets very complex to understand their limitation and many things will be a complete nightmare for you as a customer. So it’s really a big disadvantage here. I want you to go through the following conversation on service issues which was done by Mahavir Chopra of medimanage and Ritesh sometime back. It will give you some idea about this aspect.

Bad Service in health insurance by banks

Overall I would say any health insurance from banks which are pure group cover should be just an extra health cover in your life. It should NOT be the primary long term solution for your health insurance needs. Its very important to have a large health cover from a very strong company with great benefits and strong service levels.

What do you feel ?

Is your Company Depositing your EPF money ? Are you Sure?

Posted on by Jagoinvestor

I don’t want to shock you, but there are tons of cases where employer happily deducts your EPF amount from your salary, but they do not deposit it with EPFO. This goes on for years and one day you come to know that you are stuck ! , because there is no EPF money for you. Your employer has severe cash crunch or is about to shut down and now you have to run pillar to post to claim your money. The whole situation gets ugly and you feel cheated, because your company never deposited the Employee Provident Fund amount. Now you go to Police and file a case against employer. But this all can be avoided if you are careful a bit, from starting itself.

Employer not depositing EPF money

How about making sure your employer is depositing your provided fund  money into your EPF account ? Before I tell you, how you can do that, let me first share with you some REAL LIFE cases where employer failed to deposit EPF money and employees are suffering ! . These are some of the examples shared by readers of this same blog over comments section in various of EPF related articles.

Case 1 – How Abha’s company didnt deposit EPF money for 2 yrs

Dear Manish,

Thanks for such an informative post. At last i do see some hope. Here is my situation:

Worked for this company A for almost 4 years and left them in Nov 2011 as they were downsizing…yes it’s been more than a year and half of torture they have given me thus far. Company is kind of closed now as I don’t get any proper response from them, CEO is just not bothered. Company first asked us to wait for 2 months to file the claim as it is a rule, did that patiently. Later came the story of change of PF office from one (under which it was originally registered) to another and that went on for several months

They kept saying PF offices are not coordinating among themselves, the real reason was even shocking and more disappointing, PF guys were not updating because this company didn’t not deposit our PF amount for long time (2 yrs appx), they however kept deducting the same from our salaries (was surprised how come there was no annual audit by PF office and how this company could continue doing so for this long), anyways they cleared things in January this year and said we have applied again. When filed a grievance online, PF person says we haven’t received any claim whereas this X employer says they have already applied. Don’t know what the real truth is but on the basis on experiences I have… most certainly it is the X employer at fault.

Another strange thing is, when I checked by balance online in January this year it looked fine (updated up to 2012… I do have SMS proof) but from last 2 times it saying updated up to 2010, I am worried if this employer has dome some mischief here too, is it possible for a company to take back money from an employee’s PF account or it is the issue with PF website?

I don’t want to apply for my claim via options you suggested above unless I see the balance updated. Thank you so much for reading thru my query/concern. Appreciate your feedback.

Regards,
Abha

(Direct Link)

Case 2 – Balaji Company asked him to Wait till they deposit the Employee Provident Fund money

Hi Manish,

I switched jobs in August this year. Before I quit the job, I had submitted form with my previous employer for withdrawing the amount in my PF account. I had not received the amount due till December. When I called my previous employer, they told that they have not yet deposited the money and I will have to wait till March 2013.

My question is, is what my employer did legal? How frequently should the employer deposit the PF money with the EPFO? I have been working with the organisation for little more than a year now.

Thanks for clarifying.

(Direct Link)

Case 3 – Sarabjeet Kaur company not replying her because they did not deposit EPF amount

I worked in an organisation for 2 years. They have not deposited the PF amount which they used to deduct it from our account. Its been 1 year I am asking them to refund the PF. They have stopped replying to the emails and have stopped answering everybody’s call. Is there any ways I can withdraw the amount? The firm is based out in Mumbai and I used to work in Delhi Branch.

(Direct Link)

Employer can be Jailed if they do not deposit EPF money

An employer has no right to deduct the employee share from salary and not deposit it with EPF. There can be any excuse or justification for this, because its employee hard earned money. Once the employer deducts the Employee Provident Fund money from the employee salary, its their duty to deposit it with EPFO , and if they fail to do so for any reason, its a crime.

Whatever is the case, you can always complain about it with the EPFO department and the concerned officer has all the rights to proceed the legal complaint against the Employer and in the worst case, employer can also go to jail, because what they did is a criminal offence under section 405/406 of IPC .

Here is a real life case Shrikant Bangur And Ors. vs Shree Synthetics Shramik Union – where employer did not deposit the EPF money and there was legal battle going on . Here are the 3 things which you can do against your employer.

1. Complain to CVO officer – You can also email your situation and case to the CVO (chief vigilence officer) at EPFO, who is appointed by Ministry of labour for EPFO to look after these kind of irregularities. You can email them at [email protected] . More at this link

2. File a Police Complaint – You can also file a criminal case, against the employer in police station which comes under the jurisdiction of your working office (not the registered one) . All you need to show them is the salary slip, which shows the EPF deducted, note that its always better to mail CVO about it anyways, so that the chances of local authorities influencing the matter will reduce.

3. Complain to  Regional Provident Fund Commissioner (RPFC) – You should also complain about the matter to the RPFC officer if under the EPFO office, which will be investigated by him/her.

How Employers Deposit your EPF contribution to EPF account ?

How exactly your EPF money gets deposited in your EPF account ? Here is what I found on this website

Employees’ PF a/cs are maintained under these two different methods are –

1) All accounts are with O/o the RPFC

Every registered employer remits the Employee Provident Fund contribution by challans to the RPFC’s Bank a/cs. which in turn gets accounted in the respective A/c No.of every such employee. And the employer submits monthly returns to the RPFC showing the details, employee wise of contribution thus remitted.

Every such money is maintained by the RPFC who in turn disburses, thro’ the employer towards refundable loans, F & F settlements together with accrued interest to the respective employees. Once in a year a ledger sheet showing the transactions of any employee for one full year is issued to the concerned. Similarly from the PF contribution pension contribution is divided and remitted to the Pension a/c. of the employees thro’ a separate A/c. code. This method is the largest.

2) The other method is called “Exempted Establishments (PF Trust)”

An employer/company who employs more 100 employees on roll is eligible to apply to the RPFC for “exemption” from maintaining the EPF under the above said (1) method. RPFC grants the “exemption orders” under certain conditions after examining various aspects. After which the Employer sets up a EPF Trust to be run by Employer (employer’s nominees & Employees’ representative (Union nominees) which manages all the contributions of employees & employer (excepting Pension Fund which is never maintained by the Trust). A set of Bye laws, in the lines of EPF Act & Rules is prepared & duly approved by the RPFC for running the Trust.

This PF Trust money is invested in the Govt.approved securities for earning the assured interest from which accrued interest to the employees’ PF a/cs is credited. The Trust once in a year prints the Employees’ PF ledger a/cs and distribute to the concerned. The Trust accounts are audited by the CA and submitted to the RPFC. RPFC also periodically inspects the Trust a/cs and oversee. Monthly, annual returns in the Forms have to be submitted. The convenience under the Trust is quick disbursement of loans, withdrawals and F & F settlements to the employees. Surplus, if any never distributed but any shortfall is made good by the employer.

(Source)

How to find out if your employer is depositing your EPF contribution or not ?

Let me share with you some steps you should follow, to find out if your company is depositing your EPF contribution properly or not.

1. First thing is the do not rely on hearsay’s here and there. It might happen that you come to know from some one that your company is not depositing your EPF money, but it might not always be true . Delays happens at times .

2. Every month on 25th , your employer is suppose to send few documents to EPFO department to intimate them on

  • Form – 2 (for new member during the month)
  • Form – 5 (detail of new joinees during the month)
  • Form – 10 (detail of left employees during the month)
  • Form – 12 – (Details of money deducted from employees salary)

3. The best thing is to first contact your employer and ask them for a copy of these forms for last 2-3 months, do double check if they deposited the money or not.

4. As per my opinion, the best way for a common man and most convenient option is to file a RTI against EPFO and ask them all these questions . Mention your EPF account number, your employer Code and simply ask if your employer has been depositing your contribution or not.

Conclusion

Mostly the big size employers might be depositing the Employee Provident Fund money properly on time, but some of the companies which are small sized or whose owners and management teams are unethical might be into these illegal activities of not depositing employees hard earned money. Its always a good idea to spend some time to be assured, in-case you feel your company is one of those who are not depositing EPF amount with EPFO 🙂

Do you know of any case like this ? Also Please share this article with more and more people