[ajmat]

Acko General Insurance got scammed when a person discovered a bug in the website and managed to insure over 200 cars on two wheeler policies. Instead of paying Rs 10000 per car, they paid Rs 700! This person who operated this scam, had a brother who had bought a fleet of taxis from an aggregator and converted them to non commercial use for resale. They needed to be reinsured so this flaw was exploited.

This was only discovered when a person who had bought one of these cars, claimed insurance from Acko.

More here

[libranof1987]

If this was a flaw or bug in Acko's website, how is the person who exploited it at fault - from a strict legal (not moral or otherwise) perspective.

Here's an example: there's a popular scam running on OLX and the likes where people contact you for buying the item you have listed. And smartly send a code to receive money, but claim that code to be for you to receive money. Cops have told affected parties that putting in the UPI PIN is consent to send them money, so it is not a fraud / scam.

Another example is skiplagging: where people have exploited a flaw in airline websites where fares for City A -> B -> C are cheaper than City A -> B. People book the first fare when they want to travel to B, never taking up the second leg. Lawsuits by airlines have failed.

Shouldn't Acko issuing these policies be considered a valid transaction.

[AtheK]

Acko should take it on the chin and honor the insurance for a year and move on. Consider it a price they paid to fix a flaw in the website, part of which they would have had to anyway pay to a developer.

[ninjatalli]

Originally Posted by libranof1987

If this was a flaw or bug in Acko's website, how is the person who exploited it at fault - from a strict legal (not moral or otherwise) perspective.

I guess it comes down to the context of the actual bug. Quoting the limited information on the bug from the shared article

Explaining the bug, the DCP said details of vehicle insurance policies bought through the Acko app could not be updated properly on the Parivahan portal of the Ministry of Road Transport and Highways. In particular, data sent from the Acko app to Parivahan did not specify whether the insurance policy was for a two-wheeler or four-wheeler. Unscrupulous elements took advantage of this
...
An internal inquiry by Acko revealed that two-wheeler insurance policies bought online were being used for four-wheelers.

Seems like they purchased 2-wheeler insurance policies for used cars that were with yellow boards (& genuine insurance that expired) which were converted to white registration boards; and then being sold through the used market. The insurance on these cars were done with 2-wheeler policies and then sold to unsuspecting buyers; which is what the scam is all about.

As @ajmat's post mentions, the scam came to light when the new buyer of the car discovered that it had a 2-wheeler policy. Even though there's clearly a bug on Acko's website that allows entering car / 4-wheeler details for a 2-wheeler policy and allowing the user to purchase the policy, the wording of the policy document would be clearly highlighting coverage for a 2 wheeler and not a car; which would indemnify Acko from not providing insurance cover for the car.

[binand]

Originally Posted by libranof1987

If this was a flaw or bug in Acko's website, how is the person who exploited it at fault - from a strict legal (not moral or otherwise) perspective.

Seems to me what this person did is an offense under the IT Act. Specifically under the clauses dealing with tampering with data, altering information and disrupting systems.

[thanixravindran]

Originally Posted by libranof1987

If this was a flaw or bug in Acko's website, how is the person who exploited it at fault - from a strict legal (not moral or otherwise) perspective.

Here's an example: there's a popular scam running on OLX and the likes where people contact you for buying the item you have listed. And smartly send a code to receive money, but claim that code to be for you to receive money. Cops have told affected parties that putting in the UPI PIN is consent to send them money, so it is not a fraud / scam.

Another example is skiplagging: where people have exploited a flaw in airline websites where fares for City A -> B -> C are cheaper than City A -> B. People book the first fare when they want to travel to B, never taking up the second leg. Lawsuits by airlines have failed.

Shouldn't Acko issuing these policies be considered a valid transaction.

Disagreed. In the UPI example you quoted, as a buyer initiating a payment receive transaction and then running off after getting the money can be proven under 'intention to cheat' legally if it reaches to court. Cops always take the easy way out.

Here the fraudster has willfully declared the vehicle as 2 wheeler when he has to purchase 4 wheeler insurance. I guess this is about the 3rd party insurance and suspect a hand of RTO as insurance print out is submitted during re-registration.

[khanwasif1]

As per insurance principles of Utmost good faith and Material facts, it is the equal responsibility of the insured (customer) also to disclose all relevant and material facts.
Even though there is a bug, on which insurer is responsible and have to be reprimanded, however it does not take away the onus of hiding of factual information on the risk coverage.

[RRM]

ACKO could have done a quick check when so many registrations were happening. They can also tie-up RTO probably to check the vehicle number which segregates clearly the 2w and 4W numbers and can raise a flag immediately. There are definitely ways to avoid such illegal registrations

[Hayek]

Seems like a strange scam. Was this for third party policies which are mandatory or own damage? And if for own damage, how could anyone expect to make a claim for a car with a policy that specifies a two wheeer. Clearly more than meets the eye. Even if the second hand sale theory is right, surely a person buying a second hand car would see the policy document and check what vehicle it is for!

If only for third party, the question that arises is why take a policy at all - there are plenty of vehicles operating without insurance!