“Ma’am, your account has been compromised. Please share your OTP to secure it.”
Does this sound familiar? If you’ve ever received a call or message like this, you’re not alone.
Sounds unbelievable, right? But it happened. This isn’t an isolated incident.
Recently, my uncle received a call about an insurance policy he had invested in seven years prior, for which he’d paid only one premium. The caller claimed that due to market growth, paying the outstanding premiums would secure older NAVs and accrued benefits. Enticed by this, my uncle paid all the due premiums through a link provided by the caller. He was a lawyer, so did not share any details of this fraud with anyone to save himself from embarrassment. Weeks later, he received a new policy from a different insurance company for the same amount. He informed me of the situation later. I advised him to withdraw the policy during the free look period to recover his funds. Thankfully, with timely action and proper guidance, he can potentially recover the money from this fraudulent situation. However, many other financial frauds can lead to significant losses.
I know someone whose son studies in the US. They received a call from a US number claiming their son was arrested on drug charges. The caller posed as a lawyer and offered legal assistance, asking for a large sum of money to be transferred internationally. My friend complied, only to discover the fraud after directly contacting their son.
These types of frauds are rampant in India, targeting everyone from young professionals to retirees. People say they are too careful to fall for a scam, but we have seen even highly educated individuals, including lawyers, doctors, teachers, and IAS officers, are vulnerable and can fall victim to these scams. Fraudsters are experts at exploiting human psychology. They play on emotions like fear, urgency, and greed.
Banking fraud cases in India surged 27 percent to 18,461 cases in the first half of the financial year 2024-25, compared to its previous level of 14,480 cases in the same period in the previous year, citing the official Reserve Bank of India (RBI) data. UPI frauds, phishing scams, and fake investment schemes are becoming more sophisticated, making it harder to distinguish between what’s real and what’s a trap.
( Read: How Young and New Investors Should Set Their Financial Goals?)
So, how do you protect yourself? Let’s break it down.
In everyday life, financial frauds can happen in many ways, often catching people off guard. Here are some common scams that you should be aware of:
1. OTP & UPI Frauds
• Fake Calls from “Banks” or “UPI Services” – Scammers call, pretending to be from your bank or UPI service, and ask for OTPs, PINs, or CVVs.
Example: You get a call saying, “Your debit card will be blocked if you don’t verify your OTP.”
How to Stay Safe: Banks never ask for OTPs or PINs. Never share them.
• QR Code Scams – Fraudsters send QR codes claiming you’ll receive money, but instead, it deducts money from your account.
Example: A buyer on OLX asks you to scan a QR code to “receive payment” for an item you’re selling.
How to Stay Safe: Scanning a QR code is only for sending money, not receiving it.
• Fake Payment Links – You receive a link asking you to enter your UPI PIN to receive money, but it’s actually a scam.
Example: “Click this link to claim your cashback reward!” but it’s a phishing link.
How to Stay Safe: Never enter your UPI PIN to “receive” money.
2. SIM Swap Fraud
• How It Works: Scammers trick your mobile operator into issuing a duplicate SIM card, which they use to receive OTPs and access your bank accounts.
Example: You suddenly lose your mobile network, and within minutes, money disappears from your account.
How to Stay Safe: Set up email alerts for bank transactions and use strong passwords. If your SIM stops working unexpectedly, contact your telecom provider immediately.
3. Fake Loan & Investment Scams
• Instant Loan Apps – Fraudulent apps offer quick loans but charge high hidden fees and harass borrowers.
Example: You take a ₹10,000 loan, but the app demands ₹50,000 in a week, threatening legal action.
How to Stay Safe: Only borrow from RBI-registered lenders.
• Ponzi & MLM Schemes – Fraudsters promise high returns but pay old investors using new deposits.
Example: “Invest ₹1 lakh and get ₹2 lakh in 6 months!” but eventually, the scheme collapses.
How to Stay Safe: Avoid schemes that guarantee unrealistic returns.
• Fake Fixed Deposits & Mutual Funds – Scammers pretend to be from well-known banks and trick people into depositing money into fake FDs.
Example: You get an SMS about a special “10% FD scheme from SBI,” but the payment link goes to a fake website.
How to Stay Safe: Check the official bank website or visit a branch before investing.
4. Work-From-Home & Job Scams
• Fake Data Entry Jobs – You are asked to pay a registration fee for a work-from-home job, but once you pay, they disappear.
Example: “Earn ₹50,000/month by filling forms! Pay ₹5,000 to get started.”
How to Stay Safe: No genuine employer asks for money upfront.
• Fake Part-Time Income Schemes – Scammers promise high income for simple tasks like liking videos but ask for investment first.
Example: “Earn ₹2,000 daily by watching YouTube videos! Deposit ₹10,000 first.”
How to Stay Safe: If a job asks for investment first, it’s a scam.
5. E-Commerce & Online Shopping Scams
• Fake Websites & Social Media Shops – Fraudsters sell products online, take payments, and never deliver.
Example: You buy a discounted iPhone from an Instagram page, but it never arrives.
How to Stay Safe: Buy only from trusted platforms like Amazon, Flipkart, or official websites.
• Fake Order Confirmation Calls – You receive a call claiming your recent online order has issues and needs payment for verification.
Example: “Your Amazon order is stuck due to an incomplete payment. Pay ₹500 now to process it.”
How to Stay Safe: Always verify with the actual shopping website.
• Cashback & Lottery Scams – Fraudsters send fake cashback offers via SMS or WhatsApp.
Example: “Congratulations! You won ₹50,000 cashback. Click here to claim.”
How to Stay Safe: Never click on suspicious links from unknown sources.
6. Insurance & Banking Frauds
• Fake Policy Renewal Calls – Scammers pretend to be from your insurance company and ask for payment to “renew your policy.”
Example: “Your LIC policy is expiring. Pay now to avoid penalties.”
How to Stay Safe: Contact your insurer directly to verify.
• Card Skimming and cloning—Scammers install skimmers at ATMs or point-of-sale (POS) machines to steal card details.
Example: After using your card at a fuel station, unauthorized transactions appear on your bank account.
How to Stay Safe: Use contactless payments when possible and always cover the keypad while entering your PIN. (Read: Customer liability in case of Online frauds)
• KYC Update Scams – You receive an SMS or call asking you to update your KYC details urgently, leading you to a fake website.
Example: “Your Paytm wallet will be blocked. Update your KYC now!”
How to Stay Safe: Always update KYC only via official apps or branches.
7. Social Media & Romance Scams
• Fake Celebrity & Influencer Giveaways – Fraudsters pretend to be famous personalities and ask for deposits to enter giveaways.
Example: “Deposit ₹500 and get a chance to win an iPhone from my giveaway!”
How to Stay Safe: Verified accounts never ask for money for giveaways.
• Romance Scams – Scammers build fake relationships online and eventually ask for money.
Example: Someone you met on Facebook or Tinder claims they need money for an emergency.
How to Stay Safe: Never send money to people you haven’t met.
• WhatsApp & Telegram Investment Groups – You are added to a group where people post fake profits from stock tips or crypto investments.
Example: “Join this group and make ₹10,000 daily with my stock market tips!”
How to Stay Safe: Avoid investment advice from unknown social media groups.
8. Charity & Donation Scams
• Fake Crowdfunding Campaigns – Fraudsters create fake medical emergency fundraisers on platforms like WhatsApp and Instagram.
Example: “Help this 5-year-old girl get heart surgery! Donate ₹1,000 now!” but the money goes to a scammer.
How to Stay Safe: Donate only through verified platforms like Milaap, Ketto, or official NGOs.
• Fake NGO Calls – Scammers call, pretending to collect funds for disaster relief or orphanages.
Example: “Support earthquake victims by donating ₹500 now.”
How to Stay Safe: Verify the NGO before donating.
Some More Practical Tips to Stay Safe from Financial Frauds
Knowing about financial fraud is one thing, but how do you protect yourself? Some of the actions that may help you are as below. Think of this as your financial self-defense toolkit.
- Treat Your OTP Like Your ATM PIN
Here’s a golden rule: Your OTP is sacred. Never, ever share it with anyone—no matter how convincing they sound. Banks will NEVER ask for it. If someone does, it’s a scam. Full stop. - Double Up on Security with 2FA
Two-factor authentication (2FA) is like adding a second lock to your door. Even if someone steals your password, they can’t get in without the second layer of verification. Enable it for all your financial accounts. - Verify, Don’t Trust Blindly
Got a call from your “bank”? Pause. Hang up. Call the official customer care number listed on their website or your bank statement. A little verification can save you a lot of heartache. - Passwords: Go Strong, Go Unique
“Password123” won’t cut it. Create strong, unique passwords for each account. Use a mix of letters, numbers, and symbols. And please, don’t reuse passwords—it’s like using the same key for your house, car, and office. - Keep an Eye on Your Money
Make it a habit to check your bank statements and transaction history regularly. If something looks off, report it immediately. Early detection can save you from bigger losses. - Educate Your Family, Especially Elders
Scammers often target older adults who may not be as tech-savvy. Sit down with your parents or grandparents and explain how these frauds work. A little awareness can go a long way. - Beware of “Get Rich Quick” Schemes
If an investment promises sky-high returns with zero risk, run the other way. Remember, if it sounds too good to be true, it probably is. Always do your homework before investing. (Read :Your Investments Reflect Your Life: Learn from Mistakes and Rebuild Smarter)
What If the Worst Happens? Here’s Your Action Plan
Let’s face it—no one is invincible. If you do fall victim to fraud, don’t panic. Here’s what you need to do:
- Act Fast, Act First
The moment you realize something’s wrong, contact your bank. Freeze your accounts, block your cards, and stop further transactions. - File a Police Complaint
Head to your local police station and file an FIR. This is crucial for initiating an investigation. - Report to Cyber Crime Authorities
Visit the National Cyber Crime Portal (https://cybercrime.gov.in) and file a complaint. The sooner you report, the better the chances of recovery. - Monitor Your Credit Report
Check for any unauthorized loans or credit card applications in your name. You can get a free credit report from agencies like CIBIL. - Seek Professional Help
Reach out to a financial planner or legal expert to explore your options. Sometimes, professional guidance can make all the difference. - ( another healthy read : Walking and Investing: Steps to Better Physical and Financial Health)
Stay Smart, Stay Safe
Financial fraud is like a virus—it’s constantly evolving, and no one is completely immune. But with the right precautions, you can significantly reduce your risk. Think of it as building a fortress around your hard-earned money.
As your financial planner, my job isn’t just to help you grow your wealth—it’s also to help you protect it. So, let’s stay alert, stay informed, and stay one step ahead of the fraudsters.
Remember, the best defense is a good offense. By taking these steps today, you’re not just protecting your money—you’re protecting your peace of mind. ( Read :Risky Roads to Higher Returns- A Reality Check for F&O Traders)
