The cyberspace is increasingly used by organized criminal groups to target
credit cards, bank account and other financial instruments for fraudulent
transactions. Online fraud is considered to be third amongst economic crimes
prevalent in India. The major forms of cyber fraud include online auctions,
internet access services, work at home plans, payment methods using debit/credit
card, phishing etc.
Methods used by fraudsters
- Calling people and make them believe they are calling from their
respective banks and ask all the necessary details like PIN/Debit Card
numbers and Credit Card numbers.
- Stealing of the original credit/debit cards and using the cards at
shopping merchants (POS purchases)
- Cloning/duplication of credit/debit card
- Revealing of PIN/credit card/debit card numbers by the handlers of such
information/payment gateways/banks (voluntary or involuntary like hacking,
physical intrusion, data breach)
- Cloning the SIM card or Stealing the phone to get the OTP (One Time
Password) which leads to theft from their bank account
- Misuse of Information from the person working at Banks
- Scams that promise to transfer money into your account, but steal all
your data instead.
- Breach of Security and Non-Compliance with KYC Norms
Most of the proceeds of the fraudulent transactions are transferred either in
mule accounts commonly known as the accounts of those persons who do not have
any banking knowledge or the person who has been promised a certain percentage
of money in return. The other transactions also include the accounts which are
opened without any verification from the bank officials. Bank officials have to
check all the KYC norms have been fulfilled or not before opening an account.
In a large number of cases, the fraudster has obtained a duplicate SIM card of
the victim's mobile, which was later used to receive a one-time password or make
mobile banking transaction. Due to the issuance of duplicate SIM card, the
victim's original SIM will get disabled and he will not be able to receive
transaction messages. This majorly happens because of Non-compliance with KYC
norms by the telecom operators.
- Proper CCTVs are not installed or non-working of CCTVs in banks, ATMs
which helps the fraudster to escape easily.
- No proper software or to identify and flag the suspicious transactions.
- Failed to notify the customers of all the regular transaction.
Remedies available to Victim
- File a complaint with the nearest cyber crime cell/police station
- Complained can be filed through the online portal. Criminal proceedings
usually take more time and result in jail or fine for the offender, not just
- Lodge a complaint with the bank
- Every Bank has dedicated customer service manager to deal all the
situations regarding any fraudulent activity.
- File a complaint with the Banking Ombudsman in your jurisdiction
- If the victim is not satisfied with the resolution provided by the bank
and would like to escalate the matter, they can approach the Banking
Ombudsman established by the Reserve Bank of India under the Banking
Ombudsman Scheme, 2006. Each bank is required to display at its branch the
details of the Banking Ombudsman under whose jurisdiction the branch falls.
Reimbursement of Loss by Banks
The Code of Bank's Commitment to Customers says that you will have to be
reimbursed by the if you inform the bank promptly. The maximum loss should never
be more than Rs. 10,000.
Precautions to take while transacting online
- Enable One Time Password for all online transactions, and subscribe to
mobile and email alerts for notification of transactions.
- Keep a check on all Internet transactions on a daily basis
- Change your internet banking password on a regular basis.
- Use most unique passwords and don't use most common passwords like Name,
- Do not click on Click baits which are suspicious and do not get into
links which are fraudulent.
- Never reveal personal financial information (PIN, internet banking
passwords etc.) to anyone, including those who claim to be authorized
representatives of the bank.