India’s digital commerce transactions grew 30 percent in 2021, 760 basis points higher than the global growth rate, as per the Reserve Bank of India’s (RBI) bulletin for March 2022. While the country has been ahead of its peers in digital transactions since 2018, it is also witnessing a sharp rise in digital frauds, the report said.
According to RBI data, a total of 4,071 fraud cases were reported by Indian lenders between April and September 2021 and the amount involved in these frauds was Rs 36,342 crore. The regulator has thus been constantly engaging with the public to create awareness against financial frauds.
On March 7, it published a booklet named ‘BE(A)WARE - A Booklet on Modus Operandi of Financial Frauds’ that talked about modus operandi of various digital frauds and steps that can be taken to prevent the same. Following are some of the key frauds that users must lookout for while conducting their next financial transaction:
According to the report, the charging port of a mobile phone can also be used to transfer files and data. The RBI says it is of utmost importance for the customer to avoid using any public and unknown charging port or cables as fraudsters may use such public charging ports to transfer malware to customers’ phones and access, take control or steal data such as emails, SMS and saved passwords.
Money mules
Under this fraud, scamsters contact customers via mail or social media and convince them to receive money into their bank accounts in exchange for attractive commissions. The money mule is then directed to transfer the money to another money mule’s account, starting a chain that ultimately results in the money getting transferred to the fraudster’s account.
When such frauds are reported, the money mule becomes the target of police investigation for money laundering, the RBI said. Thus, it becomes important for the customer to not allow others to use their banking account to receive or transfer money and not get carried away by attractive offers.
Online job fraud
The modus operandi of this fraud is that fraudsters create fake job search websites and when the job seekers share secure credentials of their bank account on these websites during registration, their accounts are compromised.
The central bank says for any job offer, including from overseas entities, first confirm the identity and contact details of the employing company. Always remember that a genuine company offering a job will never ask for money for offering the job, the regulator said.
Lottery fraud
Fraudsters commit a lottery fraud by sending emails or making phone calls to customers saying they have won a huge lottery. In order to receive the money, the fraudster asks the customer to confirm their identity by entering their bank account or credit card details on a website from which data is captured by the fraudsters.
Fraudsters may also ask customers to pay certain fees to receive the lottery and as the requested money is generally a very small percentage of the promised lottery, the customer may fall into the trap of the fraudster and make the payment.
The RBI says customers must be aware of such “unbelievable lottery or offers”. Nobody gives free money, especially such huge amounts of money, it said.
The RBI never asks for personal bank details of members of public and thus people must be extremely careful of scamsters using fake RBI logos to communicate with customers. “Never respond to messages offering / promising prize money, government aid and Know Your Customer (KYC) updating to receive prize money from banks, institutions etc,” RBI said.
In its booklet, the RBI also shares the modus operandi of scams that include phishing links, vishing calls, frauds using online sales platforms, unknown apps, ATM card skimming, among others.
Being aware of suspicious looking pop ups that appear during your browsing sessions on the internet, checking for a secure payment gateway before making online transaction, keeping the PIN card of your debit or credit card private, and turning on two-factor authentication for financial transactions are some of the basic precautions that people must take to avoid digital frauds.
Changing password at regular intervals, installing antivirus software in your computer, and not leaving your device unlocked in public are some other key steps that one must take to ensure device security.
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