By Kratika Agarwal
Every day, you come across a new scam that makes you question whether you are using the right services or falling prey to traps. Online financial scams are such webs in which you can be trapped at any time. It’s better to be aware rather than lose something valuable to the dark side of the internet. In a world where the internet knows your every activity, let’s ensure we are making a safe pact and guarding ourselves. We delve into some common financial scams that you need to be careful of and help you empower yourself against the growing threat of scams.
Common Financial Scams:
1. UPI Scams
The rise of UPI transactions marked a pivotal moment in India’s digital payment landscape, yet it also introduced new avenues for fraudsters. UPI-related scams, from deceptive cashback offers to fake QR codes, pose a significant threat. Reported cases soared to over 95,000 in 2022–2023, a stark increase from the previous year. These scams, comprising 55% of all digital payment frauds, often involve modest sums, with 48% falling between $10,000 and $1,000,000. Identity-related frauds, especially in finance and e-commerce, dominate, constituting 65% and 54% of all reported frauds, respectively. Despite this, recovery efforts remain dismal, with only 2% to 8% of the lost funds reclaimed.
2. Digital Banking and Credit Card Frauds
As digital transactions gain popularity, online banking and credit card fraud have become increasingly common. Fraudsters use tactics such as phishing, identity theft, and unauthorised transactions with stolen card information. In the fiscal year 2023, the banking sector recorded 13,530 fraud cases. Particularly noteworthy was May 2023, when the Reserve Bank of India (RBI) reported the highest incidence of digital fraud within digital payments for the year. Among the reported cases, nearly 49% (6,659 cases) were classified as digital payment frauds.
3. QR Code Scams
In India, the proliferation of QR code scams is becoming more pronounced, with fraudsters employing increasingly deceptive tactics to entice victims into scanning fraudulent QR codes. This leads to the direct syphoning of funds from their bank accounts. From 2017 to May 31, 2023, there has been a notable surge in incidents associated with QR code fraud, including the dissemination of misleading links and the unauthorised use of debit/credit card details for illicit transactions.
4. Investment Scams
As the pursuit of lucrative investments remains a driving force for many, fraudulent schemes persist in exploiting individuals with promises of swift and assured returns. These deceptive endeavours prey upon people’s desire for financial gain, often masquerading as legitimate ventures while concealing their true nature. In the wake of the Covid-19 pandemic, a notable escalation in investment scams has been observed, impacting the working class of India disproportionately. Whether through fabricated companies or counterfeit investment products, scams spanning stocks, personal loans, cryptocurrencies, and other avenues have proliferated, underscoring the urgent need for heightened vigilance and regulatory measures to safeguard investors’ interests.
How to Deal with Scams?
1. Keep All your Passwords to Yourself
In this online world, it’s hard to keep yourself away from social media. Make sure that you secure your accounts with strong passwords and strong-factor authentication. At the same time, limit the use of personal accounts on other devices to limit the spread of your valuable information. This not only helps to keep a check on your privacy but also helps you keep control over your content.
2. Stay Updated via Push Notifications
It’s important to get updates from banks and other service providers in real time. It helps you stay calculated and regulate any unfamiliar activity on your account. Many apps and security services use push notifications to send tips on securing your personal information and alerts about new types of online scams or cybersecurity threats. Ensure that your device itself is secure, as notifications on a compromised device could be intercepted or manipulated.
3. Never Respond to Unsolicited Emails
Spammers often use mail to send you intriguing offers that can be a trap. By understanding the risks associated with these unsolicited messages and adopting a cautious approach, you can significantly reduce your vulnerability to online scams. Reacting to these may result in financial losses or involvement in money laundering operations.
4. Beware of Unrealistic Offers
The digital landscape is filled with opportunities for scammers to exploit unsuspecting individuals with offers and deals that are enticingly attractive yet fundamentally deceptive. Recognising these traps can protect you from becoming another victim of various forms of online fraud. It’s important to familiarise yourself with the common tactics used in online scams. Knowledge is a powerful tool for identifying when something doesn’t add up.
5. Research Before Making Any Transactions
Do your research when engaging with a business. Look to see if the business is verified and can be trusted, even with minimal information. A legitimate business usually maintains an active and professional presence on social media, where you can also read customer interactions and feedback. A trustworthy business provides clear and accessible contact details, including physical addresses, phone numbers, and email addresses.
6. Remember to Clean your Digital Footprints
Regularly cleaning your digital footprints helps protect your privacy and reduces the risk of identity theft. It helps you maintain control over what information about you is available online. Remove old and unused online accounts to minimise the risk of data breaches affecting your current digital identity.
