Types of KYC Scams & Methods to Prevent Them
The fraud we have all been acclimatized with at least once through SMS would certainly be the KYC scam that drives with an urgency to complete our KYC. It was the same case for the 81-year-old retired banker from Mumbai who got defrauded of Rs 7.5 lakh in a KYC fraud incident. The retired private banker became a victim when he received a message on his mobile number from an unidentified accused on 17th January 2022. The message masquerading as a scam stated that his SIM card would be blocked if he did not update his KYC details urgently. The trap worked in the scammer's favour when the octogenarian gave him a call on the number, who identified himself as the customer care executive. The build-up gave the accused an opportunity to download a screen sharing application and obtain a different number to guide the retired senior for the next steps of the deception.
While swindling over the senior’s vulnerability, the scammer caller asked him to make a transaction of Rs 10 and provide him with the complete banking details. Upon initiating the payment and receiving the bank account information, the fraudsters drained the octogenarian of ₹7,52,000 through a series of transactions.
By the time the senior banker could realize the unauthorized transactions from his account, he was already robbed and the only resort he had was to lodge a complaint with the police and alert the bank. While the case was registered for impersonation and cheating under the relevant sections of the Indian Penal Code and Information Technology Act, no arrests have yet been made and the probe is continuing.
While cases like these are orchestrated by the sophisticated criminals finding a vulnerability in a person through SMS, divulging one’s personal information to strangers, acquaintances or even known, is a matter of being aware and refraining to give in to the lucrative or urgent demands.
One of the many cases that Indians are bombarded with on a daily basis, the KYC SMS scam is real and it has proliferated across India, victimizing thousands of people. The fraudsters would make use of the technology by sending you a text message, pretending to be a company representative or bank employee to extract your personal bank account details. Once they succeed in their siphoning of your details, there is nothing stopping them from exhausting your bank account.
While all the banks, both public and private as well as RBI have issued notices on KYC SMS fraud and urged the people to never divulge their personal details, there would still be some who fall into the trap, especially the senior citizens who are more prone to these cyber frauds.
And the question that usually surfaces is, how do we identify the SMS as a fraud? Here is how to do it-
KYC Missing; New Proposal; Bank Account Closed; Urgent Action Needed
If you see such phrases in your message, BEWARE!
The RBI has clearly stated that banks will not pressurize their customers into completing KYC on an urgent basis. Moreover, no bank will ask for your personal details including bank account number, credit card information etc.
So, if someone does, then it is exactly the trap that drains you of your hard-earned money and your sleep, with investigations piling up for the police and no confirmed resolve.
KYC tends to be a vital and critical step for banks to be able to verify their customers' identities. It is done when a client opens their bank account and the bank receives their information. To enable the bank account, the customer has to prove their identity through a set of documents which is usually a very simple procedure that is not tied with punitive restrictions. So, all the whirl build-up by KYC SMS on urgency, KYC expiration, account blocked or renewal are the untrustworthy communications that deserve no attention from customers.
For all those still having a hard time separating safe SMS from the scam, keep these mantras handy:
- Stay calm & don't rush - Think twice with a calm mind before you click any link. While customers need to be very careful on which link they click and with whom they communicate their personal information, the need enhances multifold when they receive messages stating urgency from the bank.
- It's not your bank - Remember, no bank would ask you to update KYC over a message link. The banks across India have clearly highlighted over multiple platforms that they would never ask a customer to divulge their personal information over messages or call, let alone KYC update. If any customer receives such an SMS, it is only wise to not engage with the suspect and report the issue to the bank.
- Sharing is not caring - Never share your mobile number, account login details, personal information, copies of KYC documents, card information, PIN, password, OTP, or other confidential data with anyone, not even your family or friends.
- Technology at your assistance - You can also take the help of a mobile cyber security tool such as the Finlock app that uses advanced technology to detect fraudulent SMS for you. Finlock also offers cyber insurance up to ₹5 lakh to cover the losses due to fraud.
The usual modus operandi in the case of a fake KYC SMS would include unsolicited communication via SMS, asking you to engage in divulging certain personal details, account/login details/ card information, PIN, OTP, etc. In some cases, the scammers would even ask you to install an unauthorised or unverified application using a link for a KYC update. Now that you are aware of these techniques, you can avoid such SMS.