Financial fraud in India is advancing at an unsettling pace, with fraudsters attempting to deceive individuals using various methods. From individuals receiving a random text message claiming they’ve won 10 lakh rupees to vague promises made to invest on their behalf. Of late, staying vigilant has become of utmost priority.
To address this issue, the Reserve Bank of India, the nation’s apex banking institution, has been actively educating citizens on safeguarding themselves against financial fraud. So, in this very blog, we uncover the 7 most common types of financial fraud every Indian should be aware of.
High profit at low risk? Who wouldn’t want an investment scheme to look like this? But be aware, as these are signs of potential scammers. They can lure people into fraudulent schemes like Ponzi schemes, Pyramid schemes, Cryptocurrency, or the stock market for false high-return guarantees.
Scammers go to extensive lengths to make their schemes believable, so much so that they build websites that appear too good to be true. They lure people by underplaying their real identity and present promising lucrative profits to fall prey to such schemes.
If you ever receive an email stating, “Dear Customer, you are now eligible to claim your pre-approved 0% interest-free loan of Rs. 5 lakh. Click on the link to avail yourself of the offer immediately.” Beware. It’s an online personal loan scam, and cases are multiplying rapidly in the country.
Here, either the scammer is aware of your financial well-being or randomly, in bulk texts, calls, or messages, and takes advantage of people needing credit. They disguise themselves as individuals from reputable financial institutions or banks and propose loan offerings with low interest rates – drawing money at large as victims give their personal and financial details to fill out the loan application.
In today’s tap-and-go era, credit cards offer unmatched convenience for online transactions. However, staying one step ahead of scammers who continuously devise new methods to steal your hard-earned money is crucial.
Credit card fraud occurs when someone uses your credit card details without your consent, which mainly leads to an unauthorised transaction. Dodgers easily exploit security vulnerabilities to gain access, leading to unethical activities and purchases using common methods of fraud like dumpster diving, keystroke capturing, and hacking.
Phishing has become one of the most common fraudulent practices. Scammers deceive victims by developing a legitimate-looking website and marketing it through social media, email, SMS, etc. They impersonate official authorities to lure people’s trust, making it hard for them to detect the scam.
When they find an opportunity to catch their victims off guard, they steal an individual’s critical data, such as their account number, credit card details, home address, etc., which are used further for unethical practices against your knowledge.
Scammers use advanced methods to hide tiny devices inside an ATM or POS machine. These devices are designed to blend in and be difficult to notice. They even overlay keypads to capture PINs as users enter them, stealing card information.
Sometimes, the scammers retrieve this stolen data by physically recovering the skimming device or through wireless transmission. This data creates a duplicate card and withdraws money from the customer’s account, leading to large-scale fraud as they swipe.
The convenience and accessibility that instant payments have brought are beyond the glass. However, that has opened a vulnerable window for scammers to use fake identities and spy software that may access your mobile phone, including your personal and financial data.
Through data breaches and malware, fraudsters exploit security vulnerabilities to gain access to user accounts and further carry out fraudulent transactions. Scammers create fake QR codes and replace them with legitimate ones, which leads the user to transfer money straight to their account.
Paying money that you didn’t owe in the first place. That might sound outrageous, but it's a rising concern you must be aware of. Scammers deceive individuals with vague threats of being sued or jailed if they don’t clear the due amount immediately.
Legitimate debt collectors will always follow the legal process and never threaten to arrest. Here, fraudsters try to collect information like bank account numbers or social security numbers over the phone and manipulate individuals to pay old debts they no longer owe.
Amid the surge in the digital world, the methods used by fraudsters have upgraded, causing severe financial harm. While the regulatory authorities leverage technology and awareness to reduce the vulnerabilities, financial fraud will never pass sight entirely.
It's simple: when you know better, you do better. Learning about common financial fraud is the first step in taking preventative measures that significantly reduce the risk of being a victim. Vigilance and awareness are one’s best defenses. For financial services, rely on trusted platforms like Quid, where your security is always in reliable hands.
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