This is the case especially where more vulnerable customers are involved. Courts are beginning to interpret the law with more nuance, taking into account the type of customer and financial product involved in a dispute. However, the “caveat emptor” approach is no longer typical or standard for disputes relating to financial products. The state consumer forum held that although certain terms of an insurance policy were not mentioned in the insurance proposal form, since the complainant had received all the policy documents and a “Right to Consider” notice (allowing a cancellation of the policy within 15 days of receipt of Policy documents) the terms of the insurance were binding. , where a complainant alleged that he was incorrectly informed of the terms of a life insurance policy. A classic example is seen in Surinder Kumar Singal vs. The logic of caveat emptor or “buyer beware” – that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made - has traditionally been applied to the sale of financial products, just as it does to most retail goods and services. These are some of the questions that legal disputes are bringing to the courts, the answer to which often hinges on what constitutes “appropriate” or “suitable” conduct by financial service providers (FSPs). If your bank miscalculates loan EMI payments or fails to debit loan repayments from your account, when should your bank inform you about this? If your insurance policy lapses during its term, but you don’t realise – should your insurer tell you? Suppose you invest in a market-linked insurance product without understanding how it works, whose fault is it if you lose your investment when the product matures? This blog post will consider one of the questions raised at the end of the previous blog post: are the courts - and indeed the Law more generally - already discussing what constitutes “ suitable ” advice and conduct on the part of financial institutions? The previous blog post in this series had presented some insights from our review of case law relating to financial products and services. By Malavika Raghavan, IFMR Finance Foundation
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