Eliminating Online Bank Fraud
By Team Legistify / 2017-08-05
The concept of online banking has been successful, but every success comes with some failure. Banking Frauds constitute a considerable percentage of white-collar offences being probed by the police. Unlike ordinary thefts and robberies, the amount misappropriated in these crimes runs into lakhs and crores of rupees.

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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
  • Phishing scams
  • 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.

The concept of online banking has been successful, but every success comes with some failure. Banking Frauds constitute a considerable percentage of white-collar offences being probed by the police. Unlike ordinary thefts and robberies, the amount misappropriated in these crimes runs into lakhs and crores of rupees.

Have a Legal Issue?

Get connected to the Best Lawyers and Chartered Accountants Near You!


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