What is KYC fraud? Warning signs to look out for and advice to remain secure

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Know Your Customer (KYC) is a normal practice undertaken by banks and other financial institutions to check the identity of their clients. It is designed to prevent fraud, money laundering, and other illegal financial dealings. But ironically, this very word has turned into a tool in the hands of fraudsters. KYC fraud is a process of tricking people to give away personal and financial information under the false promise of renewing their KYC details. In the past few years, such scams have multiplied in India, usually being executed via SMS, phone calls, or WhatsApp messages.

The fraud most often starts with a call or message from an individual who claims to be your bank representative, phone company, or digital wallet operator. The message in most cases would be cautioning you about your KYC being incomplete or out of date, and if you don't get it updated right away, your account or service will be suspended. It would have a link or contact number that leads to a lookalike website or scammer impersonating a customer care executive.

When you click on the link or provide information via a call, the scammers can ask you to provide personal data like Aadhaar number, PAN, date of birth, or even bank account details. Sometimes you are coerced into downloading a remote access tool like AnyDesk or TeamViewer so that the scammer can remotely access your device and drain money from your bank account.

Scammers try to scare you with urgent texts to make you act in haste without considering anything. Your account will be suspended today, Last warning: Update KYC now types of messages are alarming. These can be sent from unknown mobile numbers or odd email IDs which are not official customer care IDs.

Phony links are another tell. Authorized institutions hardly ever send clickable links through SMS or WhatsApp for KYC notification. If the link is not leading to your bank's or wallet provider's official website, do not click on it.

Another sign is being asked to share sensitive details over a phone call. Legitimate banks never ask for confidential information like OTPs, CVV numbers, or passwords over a call or message. If someone does, it’s almost certainly a scam.

Never provide personal or financial details over the phone or through URLs sent via SMS or WhatsApp. Always check such requests by going to the official website or calling the customer care number provided there. If a suspicious message is received, report it to your bank and pass it on to government helplines such as 1930 or cybercrime.gov.in.

Do not download any unfamiliar apps as advised by a caller, particularly remote access applications. Update your phone's operating system and antivirus programs. If you are sure you have been duped, report to your bank immediately to freeze your account or block your card.

KYC fraud takes advantage of fear and a sense of urgency. Knowing how scams work and being prepared for how to act is your best protection. By remaining calm, vigilant, and informed, you can safeguard your personal information and financial well-being from the increasing threat of cyber fraud.