Faced With A Financial Fraud? Check This List To Avoid Inconvenience

A senior citizen who lived with her son received a call from someone allegedly calling on behalf of Maharashtra Natural Gas Limited, a gas provider supplying piped gas to homes in Maharashtra. The caller showed urgency and urged the lady to pay the pending gas bill immediately, failing that the connection would be gone. Anxious and perturbed by this information, the lady rushed and gave the phone to her son to sort out this issue. The caller again insisted on the immediate need to clear the pending gas bill and asked the son to pay through a specific link, that he would share. The son agreed to pay Rs 100 as a test payment to which the caller agreed. The link, once opened, displayed the details of the gas connection, such as the account ID, the person in whose name it was registered, etc. Believing the link to be genuine, the son entered his card details to make the test payment of Rs 100 but ended up losing Rs 60,000. 

In another instance, a lady loses Rs 60,000 after swiping a credit card at a local market. A lady from Jaipur went to a local market in Bangalore to purchase a few items from a small independent shop. To make the payment, the shopkeeper used a credit card machine on which the lady entered her credit card PIN. She came back home after the payment went through easily. However, it was just after a few hours, the lady received a transaction alert for her credit card with a charge of Rs 50. She didn’t give much thought to it as it was nearing bedtime and the amount was small. 

Soon after, she received a call from her bank about a potential fraudulent transaction. Suspecting it to be a scam call, she hung up. The next morning though, a nastier surprise awaited, for she received yet another transaction alert for her credit card, but this time for Rs 20,000. That’s when the severity of the situation sunk in and she immediately reported the unauthorized transaction to the bank and got her card blocked. This incident is potentially a case of card skimming done using a rigged card payment machine with the card PIN being possibly traced or recorded by the machine or the POS terminal attendant. Fortunately, she flagged these transactions within 24 hours of the incident and was able to recover her funds.

Such cases go on to show the recent surge in financial fraud, and how you could also become a victim of it, unless you do not take steps to improve the situation, according to a recent research report by BankBazaar called “Secure Payments- A Guide To Transacting Safely.” Thanks to AI, financial frauds are becoming highly sophisticated and difficult to detect. Moreover, this threat extends to banks and financial institutions dealing with customers’ financial data. 

The Indian Cybercrime Coordination Centre (I4C) reported that over the last three years, digital financial frauds have led to staggering losses worth Rs 1.25 lakh crore. In 2023 alone, over 13,000 cases of financial fraud were recorded, nearly half of which were digital payment fraud (card/internet). According to data from the National Cybercrime Reporting Portal (NCRP), victims of digital financial fraud reported to have lost at least Rs 10,319 crore. The upsurge of digital payment methods, which includes credit cards, has resulted in an uptick in the digital financial fraud space. It is therefore important to stay aware. 

“While financial fraud severely impacts personal finances, it also causes direct monetary losses and significant stress. The victims bear the maximum brunt of it with drained accounts, unauthorized transactions, damaged credit scores, and a loss of trust in financial institutions. The emotional toll of it causes anxiety and distrust, continuing well beyond the fraud resolution. While this disruption affects the individual’s financial stability, it also brings down confidence in digital banking services, changing how people manage their finances,” according to BankBazaar research report. 

In this context, it is important to understand various kinds of financial fraud: 

Phishing: Fraudsters send fake emails or messages pretending to be from banks or payment apps to steal information. The identifying signs are emails/SMS asking for personal details or OTP, links directing to fake websites, and unusual grammar or spelling errors. 

SIM Swapping: Fraudsters duplicate your SIM card to intercept OTPs and complete transactions, including those from your credit card. The identifying signs in this case are sudden loss of mobile network, inability to make or receive calls, and unusual activity in your bank account. 

Card Skimming: Devices are installed at ATMs or POS terminals to capture card details during transactions. You would be able to detect this by unusual attachments on ATMs or POS terminals, and unauthorized transactions on your bank statement. 

Vishing (Voice Phishing): Fraudsters call pretending to be bank officials to extract confidential information. You can easily trace these calls asking for personal or banking details or callers creating a sense of urgency or fear. 

Fraudulent UPI Requests: In such cases, fraudsters send fake UPI payment requests, and trick victims into approving them. To identify this, you could notice unexpected UPI payment requests and requests from unknown contacts. 

Overpayment Scams: Fraudsters send a small amount and ask for a larger amount back, claiming an error. You can make this out when you receive small payments from unknown sources, or you receive requests to return a larger amount than received. 

Fake Customer Service Numbers: In this case, fraudsters post fake customer service numbers online, influencing victims to share sensitive personal or banking information. You would be able to easily identify these unverified customer service numbers online and request personal or banking details during the call. 

Also read; Many Indians Face Credit Card Fraud! Many Experienced UPI Transaction Fraud, Reveals Survey

Statistics: 

In 2023 alone, the total number of financial fraud cases is 1.13 million, according to Lok Sabha data. The amount involved in financial fraud cases in 2023 is Rs 7488.6 crore, according to Lok Sabha. According to RBI, there are 6,659 cases of digital/payment fraud (card/internet) in 2023 alone. According to the Indian Cyber Crime Coordination Centre, there are 4.7 lakh financial fraud complaints (saved Rs 1200 crore). According to media reports, from the finance ministry, while total financial frauds increased 65 per cent in 2022, ATM and other financial frauds grew 88.8 per cent in value between 2021-2022, Rs 1,119 crore in 2021 (1.08 million cases), and Rs 2,113 crore in 2022 (1.78 million cases). According to NPCI, UPI-related scams account for 55 per cent of total digital payments fraud. According to NPCI, 2000 customers were affected monthly by cyber fraud. 

What To Do If You Lose Money By Financial Fraud: 

Report The Incident Immediately: Promptly report the fraudulent incident to your bank or UPI app provider. Here, time is of the essence - the earlier you report, the higher will be your chances of being eligible for zero eligibility protection, subject to conditions.

Block Your Cards: Request the bank to freeze your account and block your card to prevent further misuse.

Provide Relevant Details: When reporting the incident to the bank, provide all information such as emails, SMSs, screenshots, transaction details, or any other incident-related details, if necessary. This documentation can help support your case.

Dispute Resolution: After filing the report, follow up on the dispute resolution process. Adhere to the reporting deadline and provide all necessary documentation to maximize your chances of recovering your funds.

File A Police Report: If required, file a complaint with the local cybercrime unit or police which can serve as an official record and may be necessary for further investigations.

Notify Your Credit Bureau: Don’t forget to notify your credit bureau of the fraudulent incident to prevent it from impacting your credit score.

Monitor Your Accounts: Check your credit card accounts regularly to track your transaction activity. This will allow you to flag and report suspicions without delay.

Documents You Need: 

For Fraud Originating Within India: To report a fraudulent incident or transaction, you must provide the following documents based on whether the fraud is a domestic or international transaction. Remember, once your card has been blocked, it cannot be used again. The bank will issue you a new replacement card with a different number. However, your blocked card’s account will remain active.

Domestic Transactions: Cardholder Dispute Form (CDF) with transaction details and signed by you. Incident Letter with the date and your signature, addressed to your bank. It must contain details about (a) Account number, card number, and date of loss, (b) Who had the card when the fraud happened and how you found out about the transaction, and (c) Any additional information about the fraud. Original FIR / Online FIR / Incident Letter with the police acceptance stamp. If the fraudulent transaction is equal to or above Rs 20,000, it is mandatory to provide details of the card and transaction. 

Fraud Originating Abroad: In the case of a fraudulent international transaction, you must submit the following documents, in addition to a filled-in Customer Dispute Form and Incident Letter: FIR from the overseas local police is mandatory if the fraud involves an international transaction and the customer is in the location of the fraud. FIR is not required if the fraud involves an international transaction while the customer is in India. Passport copy including blank pages is mandatory for fraudulent international transactions and transactions where geographical location is unclear. In the absence of a passport, a signed declaration by the customer confirming that they do not hold a passport & were not in the city of fraud must be obtained.

In credit card fraud cases, the customer's liability depends on how quickly the card has been blocked after the fraud is discovered.

Hence, the best way to avoid fraud is to be very vigilant, in suspicious situations. You must follow the following C.H.E.C.K list: credibility (Is this payee trustworthy?), haste (does this request seem urgent or too good to be true?), excess information (am I being asked for too much personal information?), control (have I initiated this transaction?), known platform (is this transaction happening on a secure platform?).