Technology has made the world a smaller place. Especially in the finance industry, the best resources are at your fingertips, thanks to the rise of digitisation. However, the internet marketplace has several fraudsters looking to steal your money, data, and identity. While the financial industry has mechanisms to identify and address potential threats, some of the biggest financial frauds in India – and globally – prove that awareness and immediate mitigation strategies can help control the extent of damage.
The landscape of financial fraud is constantly adapting to the evolving business environments. Research company Cybersecurity Ventures reported that fraudsters will begin to attack users every two seconds by 2031. Therefore, users need to know what to do in the face of financial fraud.
Examples of financial frauds
Financial frauds can range from seemingly harmless cold calls asking you to confirm your financial details to extensive scams involving crores. One of the biggest financial frauds in India in the recent past involves jeweller Nirav Modi. The businessman is being investigated as part of a 2018 fraud case involving over Rs 11,000 crore from the Punjab National Bank. Another financial fraud that is cited even today is the 1992 Harshad Mehta scam. The Bombay Stock Exchange manipulation scheme carried out by the eponymous stockbroker cost investors over $10 million.
These examples prove that the biggest financial frauds in India do not fit into a specific framework and can vary in nature.
Recommendations to avoid financial frauds
Never share your personal information: No financial institution contacts customers over phone calls or emails asking for card details, ATM pin, and one-time passwords. Suppose you receive an unusual request to divulge financial information, visit the bank and confirm the message’s veracity. You can also call a financial institution’s official customer care number.
Research your options: Before you invest in a company or engage a payment aggregator, research the company. Visit the website, check the domain name, and read customer reviews and market reports of the company’s performance.
Protect your devices: In the era of digital payments, most transactions happen on computers or mobile phones. These devices contain sensitive information, so secure your accounts with strong passwords, anti-virus software, and regular security updates.
Verify contact details: Spoofing or identity theft is a recurring feature in fraud cases. Before a transaction, always do a test run and confirm the receiver’s identity.
Calculate risk vs reward: If an offer sounds too good to be true, it could be a scam. If you receive a message offering you money or a great deal on a stock, contact your financial advisor or research the company. As a thumb rule, don’t reply to unusual messages or emails.
Filing financial fraud complaints
Despite your best efforts, it is possible to fall for a carefully designed financial fraud. The best way to mitigate losses is to file a financial fraud complaint at the first sign of unusual activity. The government of India has set up a national toll-free helpline number (1930) for citizens to report financial fraud. Complaints can also be registered at the National Cybercrime Reporting Portal. It is also essential to keep the bank, payment gateways, and payment aggregators informed. It would help if you also documented all financial movements around the time of the unusual activity.
At Paytm, you can contact our helpdesk or 24*7 support to report fraudulent activity on your wallet or account.
Staying updated on various financial frauds and grievance mechanisms is essential to any user’s financial hygiene.