Uttar Pradesh Police has uncovered a fraudulent scheme in which criminals use manipulated Aadhaar details to file bogus insurance claims. Unlike previous scams that primarily targeted bank accounts, this operation focuses on health, life, and motor insurance payouts, exploiting loopholes in identity verification systems.
According to official sources, fraudsters gain access to Aadhaar data from villages and small hospitals, sometimes offering patients cash or free treatment to obtain their identity details. Once in possession of these details, they alter the mobile number linked to the Aadhaar, effectively controlling authentication processes.
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The altered Aadhaar is then used to purchase high-premium insurance policies. Shortly thereafter, false claims are filed, with settlement amounts directed to bank accounts opened in small-town branches to avoid scrutiny.
Insiders and Control Teams Under Scrutiny
In late July, UP Police sent notices to several insurance companies, requesting details of employees who assist in claims processing, as well as information from internal fraud control teams. The investigation seeks to determine whether company insiders played a role in facilitating the scheme.
Niva Bupa Health Insurance Managing Director Krishnan Ramachandran confirmed that the company had detected two to three such fraud cases. Industry-wide, insurers are sharing related intelligence with the Insurance Information Bureau (IIB) to track patterns and identify vulnerabilities. Industry experts estimate that between 10% and 15% of total insurance claims in India may be fraudulent, a figure that highlights the scale of the problem. The current case has heightened calls for stronger data protection measures and stricter verification of claimants.
Police officials are probing connections across multiple states, suspecting an organised network that involves local agents, data brokers, and possibly employees of hospitals and insurance firms. The racket’s use of Aadhaar-linked identity manipulation has raised concerns over the adequacy of current biometric security measures, especially in rural and semi-urban areas.
Authorities have advised citizens to safeguard their Aadhaar details, lock their biometric identifiers, and remain cautious when approached for personal data, particularly in medical or insurance-related contexts. The investigation is ongoing, and officials expect further arrests as more evidence emerges.