6 Common Bank Frauds You Must Avoid At All Costs

Here are some of the most common bank fraud techniques used by scammers. Read on to be prepared and to avoid them.

Types of Banking Frauds

Gone are the days when a so-called Nigerian prince would promise you a million dollars and swindle you. You are not that naïve anymore, but neither are the fraudsters. A link with an urgent KYC verification reminder, or an SMS confirming a loan pre-approval – frauds are getting increasingly more sophisticated. A hallmark of modern banking fraud is that they all look very genuine. Here is a look at some of them.

  • RBI reported bank frauds exceeding Rs 3,500 crore in 2023

  • As a category, digital payments saw the top bank frauds in India

  • There was a 49% increase in bank fraud cases in FY23 compared to the previous year

Also Read: UPI Fraud: SBI Shares 6 Tips To Follow While Using Or Making UPI Transactions 

Common Types of Banking Frauds

Bank frauds may follow one of these modus operandi –

  1. Through your bank details – Scammers ask for your bank details and use them to deposit a demand draft at the bank. This results in automatic withdrawal scams from your account to the scammer’s account. The scammer may ask for the bank details from you claiming that you have been selected for an exciting offer or that you have won a sweepstake.

  2. Through clickbait links – These are phishing scams where links are sent through text or email. These messages are designed to resemble authentic bank communications. Such links capture bank details, personal details, OTP, etc. Using this information, the fraudsters can hack your bank or credit card account.

  3. Masked scammer – In this method, the scammer poses as a government official and informs you about a lottery that you have won. They demand upfront income tax payment against the win and threaten tax non-compliance actions if you disagree. 

  4. Overpayment scam – Fraud buyers send a higher value cheque to the online business person, and ask for a return of the excess amount. The cheque turns out to be fake while the scammer pockets the excess amount refunded.

  5. Fake charity – Fake charitable organisations call or mail with requests for donations but end up enjoying the charity scam loot so collected. For instance, it could be a call to help a terminally ill patient. Except that the patient doesn’t exist.

  6. Cheque-cashing scams – In this offline scam, a scammer asks you to deposit his cheque in your account and pay him in hard cash. Very conveniently, he needs urgent cash and his bank has no branch in your city. 


Always remain watchful and cautious when it comes to banking transactions and communications. Never disclose any banking or personal details, including OTPs, unless it is a website or a service that you trust. Avoid suspicious links, emails, lottery wins, etc. Besides, if you do get scammed, don’t forget to inform the bank immediately. It is your alertness that will save you from these scams.  

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Also Read: Beware Of These 5 Loan App Fraud Risks While Applying For A Loan  


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