How to protect yourself against financial scams amidst a fast digitalizing India

Photo credit: kotaku.com

Digital India has moved at breakneck speed, from being a feel good slogan to reality.

While the benefits to citizens are immense, there is a potential of harm if not addressed soon enough. According to the recently released National Crime Bureau Statistics 2014 (the 2015 version has yet to be released), the number of reported cyber crimes in India is roughly about 10,000, with a conviction rate of 23 percent. A significant chunk of these reported cyber crimes are financial in nature.

An interesting but unsurprising fact about cyber crimes is that strangers mostly commit cyber crimes financial in nature, while those who might know the victim directly or indirectly are more likely to commit cyber crimes of a more personal nature. This makes financial cyber crimes harder to defend against, and reduces the likelihood of identifying the culprits.

These are some important things to note about financial cyber crimes.

1. The majority of the financial crimes are organized crimes, with call centers of sometimes of innocent employees executing them on behalf of crime syndicates. One might receive a series of calls asking you to verify certain credit or debit card details. They may claim that they are either calling from banks or from contractors of the bank.

2. Many of these syndicates are spread globally, so catching them and prosecuting them under a legal framework becomes much harder.

3. In some cases, insiders of telcos and banks collude with criminals, making it much easier to breach the system. Cloned SIM cards and calls using a bank call center’s number are good examples of such failures.

4. Even when culprits of the crimes are caught, it takes a long time for the legal system to act and get the money back.

In many cases, courts have penalized banks and telcos and made sure that they implemented measures to safeguard against such crimes. Some of these measures are the Know Your Customer (KYC) requirements for SIM card purchases, fraud analytics for abnormal behaviour in user accounts, and two-factor authentication upon log in. (Two-factor authentication is when two different types of passwords are needed to log in, to safeguard the account in case one is being compromised, and to provide an additional layer of protection.)

In spite of these measures, criminals continue to get away with their crimes, due to the lack of awareness among users.

Most users fall prey to what is called social engineering

Social engineering is a technique of making people believe that they are talking to actual employees of credible organisations like banks, and then extracting sensitive information such as passwords. These are some examples of social engineering.

• A call from someone claiming to be from your bank and asking for your password due to a system upgrade or any other plausible excuse.
• Emails, seemingly from banks such as “yourbank”@gmail.com asking you to change your password. Most people wouldn’t notice domain name changes.
• Fake ecommerce sites to collect card data along with a static pin code.
• Fake ATMs to read magnetic strips of the cards. This is however not possible with new the chips and pin codes.
• In some cases, faking phone calls from relatives and asking for passwords and pin codes.

No amount of technological measures from banks and telecoms can be used to safeguard against such instances if customers do not take the necessary precautions. These are certain safety measures to adopt when accessing your online banking accounts, or that of any other online financial institution. This attempts to cover all known aspects so far, but obviously can never be complete. When in doubt, always err on the side of safety.

Safety measures to adopt when accessing online financial accounts

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