Identifying and Protecting Yourself from Financial Fraud: All You Need to Know

  • Published on: 29 Feb 2024
Identifying and Protecting Yourself from Financial Fraud: All You Need to Know

The Reserve Bank of India (RBI) is hosting the Financial Literacy Week 2024 from February 26th to March 1st, with the central theme being ‘Make a Right Start-Become Financially Smart’. Through this initiative, the RBI aims to boost the understanding of financial discipline at the right time, especially for students just graduating from college.

In light of increasing financial fraud and various techniques employed by scammers to deceive you and extract your hard-earned money, it is in your best interest that you understand how to identify these situations and safeguard your finances.

Read on to learn some common financial frauds and how to protect yourself.

Common Financial Scams That You Need to Know About

Here are some common frauds that you must be aware of:

Banking and Credit Card Scams

With the rising usage of credit cards and bank accounts, scams related to these financial products are also on the rise. Scammers extract your funds through:

  • Skimming bank account and credit card information
  • Pickpocketing or physically stealing your cards 
  • Getting your financial information through phishing
  • Hacking into financial portals or using links to extract your details

Fake Loan Offer Frauds

By taking advantage of your need for credit, scammers provide fake loan offers that are enticing enough to grab your attention. They introduce themselves as representatives of financial institutions and ask for your financial details with an excuse of filling out your loan application. They contact you through:

  • Emails
  • Phone
  • Text

QR Code and UPI Scams

While UPI and QR codes have become a convenient payment mode, you need to be aware while using them to protect yourself from scams. Here’s how scammers deceive you:

  • Scammers insist you make payments to fake QR codes or UPI IDs, enabling them to extract funds directly from your bank account
  • They redirect you to malicious websites by linking QR codes with these websites to hack your device or extract your financial information
  • Scammers send emails asking you to renew your cards or make payments through fake QR codes and steal your sensitive data when you scan these codes

Investment Scams

By promising guaranteed returns and lucrative investment schemes, scammers also use fake investment options to deceive you and steal your funds. These investment scams include:

  • High-profit investment schemes
  • Pyramid schemes
  • Ponzi schemes
  • Recovery room schemes
  • Stock market scams
  • Cryptocurrency scams
  • Advance fee scams

Courier Delivery Scams

Another new scam that you need to be aware of is courier delivery scams. They revolve around delivery packages, as the name suggests, and target young as well as senior citizens. Scammers carry out these scams in the following ways:

  • Scammers pretend to be delivery representatives and ask for on-the-spot payments for these couriers
  • Pretending to be delivery representatives, they deliver fake couriers and ask for OTPs as verification, hence stealing your sensitive data through these OTPs
  • They contact you by claiming that they’re sending illegal items in your name to other countries and ask for funds in exchange for not sending these packages

Tips to Identify and Safeguard Yourself from Financial Scams

To identify different types of financial fraud, follow these easy hacks:

Verify the Email Address and Contact Number

Verifying the medium through which you’re contacted is a great way to detect financial fraud. They use fake mobile numbers and create fake emails to contact you. To stay protected, pay attention to these points:

  • Check the contact number using a caller ID checking tool
  • Pay attention to the domain of the email address
  • Check the full name of the sender
  • Try to find grammatical mistakes in the email or SMS
  • Hover over the attachments and links, but avoid clicking on them

Check if the Benefits Offered are Too Good to be True

Another way to identify such scams is to see if these investment options or financial products offer unrealistic perks. These scammers harm you financially by attracting you with such benefits and gaining your trust. Follow these tips to protect your finances:

  • Check the authenticity of the financial institution
  • Verify if the representative contacting you is an employee of the institution
  • Request for official paperwork and assess the terms and conditions thoroughly

Cross-check the Information with Your Financial Institution

Scammers may contact you and request you to clear the bill payment of your credit cards. They may even ask you to pay an additional fee for your credit/debit cards or bank accounts. In this case, always contact the respective financial institution to spot such financial scams instantly. Here are some tips:

  • Before making any payment, check with your bank/NBFC
  • Check if the person contacting you is an employee of your institution
  • Check your bank and credit card statements to identify and report unauthorized transactions

Check the Authenticity of the Websites and Apps

Before making any payment through a website or an app, always check if the website or the lending app is authentic or not. To deceive you, scammers create fake websites and apps pretending to be the official websites or apps of reputed institutions. 

To stay protected, look for SSL certification. It appears in the URL bar as a lock icon and helps you check the authenticity of the platform.

Staying vigilant and well-informed is the best way to protect yourself against financial mischief. While getting a loan, choosing a trustworthy lender is also essential to avoid any losses later. One such lender offering an Instant Personal Loan is Fibe. Our app is PCI-DSS compliant and ISO/IEC 27001 certified, so there’s no need to stress about the security factor.

You can get up to ₹5 lakhs securely with easy-to-meet eligibility criteria and minimal documentation. Simply download our Personal Loan App from the App Store or Google Play or apply through our website.



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