With ever-evolving technology and increasing digital inclusion, digital payment methods are growing in popularity. Banks and customers have accepted the new normal by going fully digital with banking needs. However, this phenomenal growth has also led to a dramatic increase in the number of scammers reinventing exploits and defrauding unsuspecting victims.
To raise awareness among banking customers and prevent fraud in the first place, the Reserve Bank of India (RBI) has taken several measures including launching the Early Warning System framework, a Market Intelligence (MI) unit dedicated to fraud, and a fraud response and management system.
In this article, we list the different forms of fraud that are currently rampant in India. While this list is not exhaustive, it highlights the most common types that all customers should know about.
Fraud via UPI:
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The Unified Payments Interface (UPI) has quickly become one of the most preferred methods for cashless transactions and online payments thanks to its quick and uncomplicated accessibility. However, it has also become a way for scammers to lure customers into their scheme. If you use one of the popular UPI-based payment platforms, be aware that there are two types of UPI fraud: UPI PIN Scam and QR code scam.
In a UPI PIN scam, payment links are sent by scammers via SMS. These payment links are created to scam users to resemble the original payment gateway URLs. After clicking these links the user is directed to the UPI payment app installed on their phone, after authorization by entering the UPI PIN the amount is immediately debited from the account of their bank.
In another type of UPI fraud, fraudsters share images of QR codes on social media platforms like WhatsApp, Instagram, and Facebook, where they ask users to scan the code, enter an amount, and enter their PIN. surname. UPI to get free cash rewards in their bank account. . Additionally, scammers also use apps that allow them to send QR codes with pre-filled amounts that require users to simply enter their UPI PIN. In such cases, as soon as the user enters the UPI PIN, the amount is immediately debited from their bank account.
Telecalling scam:
Telephone fraud is becoming an increasingly common threat. Fraudsters posing as bankers call for reasons that can include debit card problems, insufficient balances, or allegations of suspicious activity on customers’ accounts. After establishing authority and creating enough confusion in the customer’s mind, he asks for sensitive banking information such as full account number, ATM card number, PIN, OTP, or even information online banking information. This scam allows fraudsters to gain unrestricted access to a customer’s account and they can execute transactions on behalf of the customer. In cases like these, it’s important to be vigilant and not share sensitive details with strangers on the phone.
KYC fraud:
KYC Fraud is another type of scam that collects customers’ personal information. By impersonating a banking agent, scammers can request incomplete KYC documents, threaten consequences like account lockout or penalties, and request sensitive information like PAN number, Aadhar number, copy copy address proof, OTP, etc. These details can be used against customers to access their bank accounts and steal money. This fraud can happen through email or phone call. It is important to know that no bank or government official requests sensitive banking information over the phone or via email.
Email phishing:
“You have won 10,000,000 dollars! Click here to claim them all!
“My daughter has a rare disease. Please save her with a small donation.”
“Help in fighting hunger in Africa!”
Everyone has received at least one email trying to trick readers into clicking a link in the email. Email scams are not just a matter of individuals; Many companies have also fallen victim to phishing emails that try to take advantage of people providing false information.
These emails can send a virus to the system and attack it, or lead the user to a malicious website to access their bank account. Sometimes such emails lead to a landing page that is very similar to an existing social network or website that the user is familiar with and prompts them to enter credentials. These details are then used by scammers to gain access to users’ private information and steal funds. We recommend that you do not click on unknown/unverified links and always check the URL before submitting personal and sensitive information on the landing page.
Fraud through ATMs:
One of the most uncommon ATM scams involves thieves using a fake device to gain access to an ATM counter and using a face mask on the front of the machine’s keypad. Unknowingly, customers using the machine also share banking details on that device, which can be stolen by hackers. In another type of ATM fraud, some fraudsters use “cracking” software to scan data from independent ATMs.
Scam through loans:
There are numerous cases of PAN cardholders being victims of loan scams. Scammers call victims and offer minimal KYC-related easy loans by posing as a bank officials. After obtaining enough documents to “loan”, scammers use them to buy loans without the owner’s knowledge or permission. While the scammers (obviously) don’t bother paying this loan, the forgetful PAN cardholder is held accountable. This fraud directly affects the cardholder’s CIBIL score, and can also cause financial loss.
How to protect yourself from such fraudsters?
To avoid falling victim to scams, it’s important to stay vigilant. While there are new ways to scam, some rules remain unchanged. Here are some steps you can take to prevent scammers from scamming you.
- Do not share confidential information like card CVV number and personal information like Aadhar or PAN number with anyone.
- Remember that it is not required to enter a UPI PIN when you receive money.
- OTP is only used for payment. Do not enter OTPs from suspicious numbers in the website link sent by the caller.
- In the event of a complaint about suspicious activity on your account, visit the nearest branch to clarify the matter.
- Do not contact callers asking to resolve this issue via OTP or by submitting personal information.
- Always verify your email id before clicking on any email link. Phishing links can capture private information.
- If an ATM withdrawal fails, be sure to exit the process completely before leaving the counter. Also, check the cabin for hidden cameras to protect your ATM PIN.
- Protect your device with a strong password and create a unique password for the digital wallet. Always install the latest security patch on your system.