Online Frauds: Online Scams in India

With FinTechs gaining momentum, it has become much easier for people to transfer money, invest in the stock market, buy insurance policies, make payments, do credit transfers, and apply for loans. It seems like a blessing to have such advanced technology at everyone’s fingertips. No one waits for 4-5 working days for cheques to clear and for the money to be deposited in their bank accounts. RTGS, NEFT charges are a thing of the past.

Money orders have become almost obsolete. With the current pandemic situation, cash transactions have reduced to almost zero. Online payments seem to be the thing of the future, one that propels India into the digital age of independence. The Government launched online payments portals, and encouraged online transactions rather than cash transactions, with the slogan- “Make India Digital”.

With immense technological boost in the finance and banking sectors of the country, online frauds in India, have increased in number as well. Hackers and scammers are finding more innovative ways to skim off money from law-abiding citizens. The more digital India gets, the more ways scammers find to scam people of their hard-earned money. These are a few common types of online frauds that have been registered by the Cyber Crime cell of India.

Most Common Types of Online Frauds in India

1. Remote Access Mobile Application Scam

With the boom in data generation in recent years, it has become quite an easy task for various telemarketing companies to get phone numbers. Calls from random phones, asking for debit card or credit card details, though still prevalent, have lost their threat due to the increased awareness among people. With a multitude of Apps flooding the market, people often end up downloading ones that might prove to be fatal for their bank accounts, resulting in frauds. Social media marketing of such apps usually tends to be quite fascinating, and results in more number of downloads. From gaining access to the mobile number of the user for OTP generation, to gaining access to the phone’s storage, gallery, camera, GPS, and managing call history and messages, the safety breaches are immense.

It so happens that a few of these apps are doing more harm than just a few data breaches. Remote access or screen mirroring features are found to be coded into the App’s backend structure. This gives the scammer access to the passwords of the user’s online bank account, UPI pins, and much more. From there on, it’s a simple matter of reading the OTP sent by the bank since they already have access to the messages. People also get calls requesting them to download apps for social benefit purposes, and end up looting them off their hard-earned money.

People should always check the ratings of the app they intend to download, as well as see how many people have already downloaded the said app. Checking the reviews is a must as well. While giving access and permissions to the app, check whether it is important for the app to gain access to your phone. A fitness app won’t necessarily need access to your GPS, and neither would it require access to your photos. With due diligence, you can easily avoid these online frauds.

2. Insurance Seekers Scam

There are quite a few insurance pipers on the internet. Seemingly official looking websites might trick innocent and gullible insurance seekers. Too-good-to-be-true insurance offers might just be that- not true. Going through official and well-known insurance agencies, or better yet, government policies and banks is a much safer option to avoid online frauds. Fake policies have been around for quite some time now. And, it is high time that people understand the difference between authorised policies and the fake ones. Always make sure to check the credentials and registration of such agencies.

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3. Phishing SMSs for Refunds

Often it happens that people get broadcast SMSs from genuine looking SMS-ID. SMSs asking the user to follow a link to be eligible for income-tax refunds, or any product refunds are phishing for the bank account details of the user.

All refunds are credited automatically to the user’s account and he or she does not need to follow a link, which directly downloads illegal apps in the user’s phone. This app works like the screen mirroring app, and siphons off money from the user’s bank account almost instantaneously post downloading. You must steer clear of such links to avoid phishing-based online frauds.

4. KYC Update Hoax

KYC update calls and messages have been reported to be a common occurrence lately. SMSs from banks and online wallets providers have been reported to be received threatening the user to complete the KYC within a given time, otherwise risk losing their accounts. Usually, customer care calls have been reported allegedly asking users to complete the KYC. These executives seem to possess the transaction details, and account details of the users, duping them into believing that it is a legitimate call. Users end up filling out personal account details, debit or credit card details, and giving away the OTP to complete the KYC. They end up losing money thus, via online frauds.

No bank or reputed Online Wallet provider would call and ask for KYC-completion. Neither will they ask for debit or credit card details, OTPs, and personal account details.

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5. Fake UPI- Unified Payments Interface payment links

Online buying and reselling portals often bring buyers and sellers together on a single platform. Scammers take advantage of this scenario, and end up hoaxing the user with fake UPI portal links, scanner codes, and phone numbers. There have been cases where the seller has been asked to scan a code and send money to receive money. Gullible users might fall for this trick since the scammers are seasoned persuaders. The user should employ his or her own judgment against such situations. Payment links should only be opened if they belong to a legitimate and registered portal.

6. Online Stock Market Trading Portal

Quite a few trading portals and apps have cropped up in recent times. Many of them aren’t registered, but advertise themselves as brokerage-free and easy-to-trade portals. These constitute a large part in the recent online frauds that happened in the country. A lot of them claim to make trading easy and confirm profits in share-trading. There cannot be any guarantee in share trading, and seasoned traders know this fact quite well.

The beginners, finding the stock market daunting, end up registering in these hoax apps and sites. They are then requested to make payment to the app’s wallet, as points, which will later be used for trading purposes. The money put in the online wallet of the portal ends up being locked, and then transferred to the Scammer’s account. Only authorised discount brokerages should be trusted. SEBI keeps a list of authorised portals for stock trading, and only those should be used for trading purposes. Quite a few online frauds have taken place over the course of a few months. Scammers keep finding loopholes in the system and exploiting them by siphoning off people’s money. One should be quite diligent when dealing with money online, and must be careful to not fall into such scams. Common sense must be applied, and verifications about the authenticity of payment requests must be done.

Also read:
Money Lending in India and all about it
The Reliability of the Indian Credit System