Top tips to avoid common financial scams and frauds

Cases of money laundering, identity theft, cybercrime, banking frauds, and loan misappropriation have become common in the Indian and global financial system.

September 29, 2018 2:13 IST | India Infoline News Service
In recent years, there has been a significant rise in financial frauds and scams all over the world. Cases of money laundering, identity theft, cybercrime, banking frauds, and loan misappropriation have become common in the Indian and global financial system.
The age of Internet and globalization have accelerated the occurrence of these swindles. Many times, recession and the collapse of the financial system have been a direct result of these scams. With constant online presence, digitalization has left the common man vulnerable to different kinds of scams such as identity theft, email, or online scams.
These activities expose loopholes in the system, and the common man often becomes the target of such frauds. As per recent statistics, banking frauds in Indian public sector undertakings (PSUs) amounted to Rs25,775cr in FY17-18.
How do financial scams take place?
There are several ways in which you may be caught unaware while someone tries to steal your money:
  1. An email asking for help to release inheritance
  2. Requesting a business partner in foreign shores
  3. Impersonating as an employee from a reputed financial organization
  4. Declaring that the recipient has won a huge lottery
  5. Pop-ups that advertise expensive gadgets for free if the person provides his/her personal details. This is a phishing scam where the hacker is trying to engage in identity theft or install a malicious software on the user’s device.
Tips to avoid such scams and frauds:
  1. Never share personal and financial details over the phone or email.
  2. Do not respond to calls that ask for personal and financial information.
  3. Never share your ATM and debit/credit care PIN, internet banking password, or any details regarding your bank accounts.
  4. Nobody can win a lottery in which they have not participated. Stay away from such scammers.
  5. Do not click on any random hyperlink or download software from pop-up windows that appear suspicious.
  6. Install an antivirus to safeguard the computer from malicious software and viruses. The antivirus program should be updated frequently.
  7. Never transfer funds or share debit/credit card information to any person who claims to be a long-lost relative.
  8. Use secure payment gateways for online payments.
  9. Never make payment for any sweepstakes as they do not ask for payment upfront.
  10. Use a caller id to identify incoming calls. In case the number shows up as private or unknown, ignore or block the call.
  11. Do not have easy-to-crack passwords. Most people use passwords that are related closely to their personal life. Use passwords that contain a mix of uppercase, lowercase, and special characters and are not related to any personal details or events that others may easily be able to guess.
  12. Use secure websites that have a lock symbol before the URL bar on the browser. This symbol indicates that the site is encrypted and protected against hackers.
  13. Never sign blank checks and always put a double line on the upper left corner of the check. This line ensures that any bearer cannot withdraw cash.
  14. Never share the one-time password (OTP) to an unknown person or caller. Make sure that the OTP has been generated for the transaction initiated only by you.
  15. Check with your bankers immediately when you receive a call for personal details from a person claiming to be an employee of that bank. No bank asks for personal details through call or email.
In conclusion,
These tips can help safeguard a person from common scams and frauds. Financial institutions should implement internal controls and strict checks at every stage of transactions as safety measures to protect their data and clients from potential financial risks given that the world is changing into a digital playground. However, as individuals, it is best to exercise caution at our level to safeguard our hard-earned money.

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