TOKYO (TR) — Sony Life Insurance Co. has launched an internal probe after multiple employees were accused of swindling clients out through bogus investment schemes.
The revelations are dealing another blow to the scandal-plagued insurer, reports TV Asahi (Apr. 23).
According to the company, between 20 and 30 complaints have recently been filed by customers who suspect they were defrauded by their sales representatives.
The employees allegedly collected funds from multiple clients by pitching lucrative returns on investments that are not actually handled by the insurance giant.
Sony Life says it is currently investigating the facts surrounding the allegations. In response to the emerging scandal, the Financial Services Agency (FSA) is reportedly preparing to issue an order demanding a formal report from the insurer under the Insurance Business Act.
The revelation comes on the heels of a massive fraud case within the same company made public just last month. In that incident, a former sales employee based at a Yokohama City branch illegally collected approximately 2.2 billion yen from over 100 clients and relatives.
The disgraced agent had lured victims with promises of a 3-percent monthly dividend through Nikkei 225 futures trading. Roughly 1.2 billion yen of the swindled funds remain unrecovered.
The broader Japanese life insurance sector has been rocked by similar financial crimes in recent months. Prudential Life Insurance was forced to suspend all new contract sales until November after it was revealed that its employees had defrauded around 500 customers out of approximately 3.1 billion yen.
Industry watchers note that both Sony Life and Prudential utilize heavily commission-based compensation systems for their sales staff, a cutthroat structure that critics say creates a breeding ground for fraudulent behavior.
