Cyber fraud: Common financial scams and how to avoid them?

Here's everything you need to keep yourself safe from online financial fraud.

Cyber fraud: Common financial scams and how to avoid them?

Stop for a moment and think about the last time you made a payment online in any form. Chances are it was within the last 48 hours. From ordering food to shopping for groceries to paying bills, many of our day-to-day payment transactions are carried out online. 

Online payments are a supreme convenience that no one wants to give up, no matter how many financial scams make the news. But you don’t have to swear off online transactions entirely. You simply have to be aware of some common frauds and know how to protect yourself and your hard-earned money. 

So, let’s take a look at the most common financial scams.

1. UPI transaction fraud

UPI hit a landmark of one billion transactions in October 2019.[1] But with this rise in its usage, the number of instances of UPI fraud is on the rise as well. Most often, fraudsters ask UPI users on the phone to share their UPI registration OTP, debit card details, forward text messages, or click on unverified links. Using the data gleaned, they can create a new virtual payment address for the user’s account and set a new PIN to carry out transactions. 

Things to keep in mind:

  • There are two arrows pointing in different directions for paying and receiving money on UPI apps. Look at the arrows carefully before entering your PIN.
  • Don’t click on any unverified links you may receive in a text message.
  • Avoid making payments to unverified helpline and contact numbers listed on Google and social media.
  • There are several fake UPI apps in the app store, so be careful what you install.

Related: 5 Ways to Identify a Ponzi scheme and stay safe

2. Credit card fraud

It’s a myth that a person needs to have your physical credit card to swindle you of your money. Anyone, in any part of the world, can defraud you if they gain access to your financial data. The dark web is an untraceable and inaccessible part of the internet where there are dedicated markets to buy and sell financial data.

Things to keep in mind:

  • Avoid using public Wi-Fi networks, especially while making online payments
  • Install a trusted antivirus software on your desktop and a verified identity theft detection app on your phone
  • Register for SMS alerts with your bank, so you know instantly if any unauthorised payments are made on your card
  • Make sure to click on ‘never’ when your browser asks you whether it should save your card details
  • Do not entertain calls from unknown numbers asking for your card or bank details

Related: Cardholders can enable, disable cards for online use: RBI

3. Tax fraud

Online tax fraud is usually executed with the aim of creating panic. The fraudster usually tries to convince the victim that they are in trouble and will lose a lot of money. They may be asked to pay a fine immediately to avoid the consequences, or provide critical financial information. Another common ruse is identity fraud, where the fraudster files a false tax return by using the financial information of the victim. 

Things to keep in mind:

  • Watch out for fake websites that look deceptively like the official website of the IT department
  • Be aware that no tax official will ever call you and demand immediate payment, or urge you to share your financial information
  • Be careful where and whom you share your PAN details with

If you follow the tips above, you should be suitably equipped to dodge online financial scams. Make sure you share this information with your friends and family so that they too can be on their guard in case some fraudster tries to con them online. Do these 5 Things if your financial information is stolen.


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