Essential Tips To Secure Your Finances

Grip Invest
Grip Invest
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Jul 09, 2024
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    The financial sector has undergone transformative changes in the last decade culminating in the creation of the fintech industry. While this increasing digitisation benefits customers in a multitude of ways, it also enables criminals and fraudsters leading to an ever-increasing instance of online fraud resulting in a huge loss to customers and organisations. 

    The Indian government has operationalised ‘Citizen Financial Cyber Frauds Reporting and Management System (CFCFRMS)’ to unite all stakeholders working together to prevent online fraud. According to the data published by the Press Information Bureau, since the inception of CFCFRMS in April 2021, an amount of more than INR 1,000 Crore has been saved in more than 4 lakh incidents1.

    The greatest weapon customers have against these financial frauds is to stay abreast. As they say, prevention is always better than cure. Therefore, in the interest of our readers, we will be discussing the most common types of online scams in India and share tips and ways with which you can protect yourself from becoming a victim of financial fraud.

    5 Most Common Financial Frauds In India (And How To Be Safe)

    With the rising instances of banking frauds, Ponzi schemes, credit card frauds, and other such cybercrimes, it becomes imperative for consumers to stay updated about the types of scams and the modus operandi of cybercriminals. In this section, we will be discussing the most common types of online fraud and how you can safeguard yourself from them.

    1. Phishing scam: Phishing is a term for a social engineering scam in which cybercriminals try to obtain the account information of individuals through fraudulent means. The fraudsters trick the customer by posing as an official representative of the government or a business entity that the consumer usually interacts with. 

    This type of banking fraud is usually carried out through SMS, email, or other electronic communication. The victim is tricked into sharing their account details which the criminals then use to steal from the victim’s accounts.

    Prevention tips: To protect yourself from phishing scam:

    • Do not share your account details and OTP with anyone without verifying their credentials. Banks usually do not ask for personal information from the customer. 

    2. Fake Job Scams: They exploit the desperation of job seekers for employment. Scammers post fake job advertisements on job portals and social media platforms or send unsolicited job offers via email or WhatsApp.

    Often, these jobs promise significant earnings for minimal effort or require the job seeker to pay money upfront for training, application processing, or equipment. Once these payments are made the scammers vanish leaving the already troubled job seeker in even more trouble.

    Prevention Tips: To protect yourself from fake job scams:

    • Always verify the legitimacy of the job offer and the company before proceeding with any application. Genuine companies rarely ask for money during the recruitment process. 
    • Check the company’s official website or contact them directly using official contact details to confirm if the job offer is real. 
    • Be sceptical of offers that seem too good to be true, such as extremely high pay for minimal work. 

    3. Credit Card Fraud (CC Fraud): Credit card fraud involves unauthorised access to and use of another person's credit card information to make illegal purchases or withdraw funds. Scammers acquire credit card details through various methods including phishing attacks, data breaches, and skimming devices.

    Prevention tips: To protect yourself from credit card fraud:

    • Regularly monitor your credit card statements for any unauthorised transactions. 
    • Consider the use of virtual credit cards for online purchases, which offer a temporary card number for safer transactions.

    4. Banking Fraud: These types of fraud involve deceptive practices that target your bank accounts and the banking institutions themselves. For instance, creating fake accounts, identity theft, and unauthorised withdrawals.   Cybercriminals use sophisticated techniques such as malware, phishing and vishing (voice phishing) to gain unauthorised access to victims' accounts.

    Prevention tips: To protect yourself from banking fraud:

    • Secure your online banking accounts with strong, unique passwords. 
    • Enable two-factor authentication for an added layer of security. 
    • Regularly review your bank account statements and immediately report any discrepancies to your bank. 
    • Be cautious of unsolicited communications asking for your banking details or prompting you to click on suspicious links. 

    5. Ponzi/Pyramid Schemes Or Multi-Level Marketing Scams: These schemes operate by paying up earlier investors from the investments of new investors, rather than from profit earned by the operation of a legitimate business. These schemes eventually collapse once there are no more new investors to fund the payouts, leading to massive financial losses for existing investors.

    Prevention tips: To safeguard against Ponzi schemes:

    • Always conduct due diligence on any investment opportunity. Verify the legitimacy of the investment company through independent sources. 
    • Check if they are registered with relevant financial regulatory authorities. 
    • Be cautious of investments that require you to recruit more investors to increase your profit, a common red flag of Ponzi schemes.

    Knowledge Is The Greatest Weapon Against Online Scams And Frauds

    Staying vigilant is extremely essential in the digital age where online threats are becoming more sophisticated. As consumers, it is crucial to adopt proactive measures and keep abreast of the latest security practices and potential online threats. By doing so, you can significantly mitigate the risk of falling victim to these malicious activities.

    Always be cautious and think critically when you encounter offers or requests that seem suspicious or too good to be true. Regularly update your security software, and maintain strong, unique passwords for all your accounts. Engage with your financial institutions to learn more about their security measures and how they can help protect you. Additionally, spreading awareness and sharing information about common fraud tactics with family and friends can also help protect your community.

    The goal of fraudsters is to exploit the unaware and unprepared for financial gains. In this ongoing battle against online fraud, knowledge truly is power, and staying informed is the key to safeguarding your digital life. Explore Grip Invest to learn more about strengthening your financial health.

    Frequently Asked Questions On Financial Fraud

    1. How do you stay safe from online scams?

    Except in the case of a data breach, most online frauds can be prevented by staying vigilant and aware of the tricks scammers use to steal your personal information. 

    2. What can I do if I am targeted by online scams?

    There are government helplines to report such frauds. Further, contact your bank immediately if you believe you have been targeted. Report any suspicious transaction or account activity to your bank immediately. 


    1. Press Information Bureau <>

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