How Do Online Frauds Work?


Posted On : November 30, 2022
How Do Online Frauds Work?
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My father runs a small business and online transactions through PhonePe, GPay are routine. One fine day, I received a call from a person addressing me with my name in a very friendly manner like <name> beta kaise ho (<name> son, how are you). Tumhare papa ne paise dene the Rs 25,000. Unhone bola hai ki bete ko call kar do transfer kar dega (Your father owes me Rs 25K. He told me to contact you for online transfer of the money). Now as an obedient son, I should have transferred the money since the uncle was so sweet. That is how the biggest online frauds in India work, deceiving people with their clever tactics and making money targeting the innocent. Here on this page, understand how online frauds work and how to avoid them. 


How do Online Frauds Work?

The main villain in the whole game of biggest online frauds in India is Data Breach. All these scammers and online fraudsters need is your bank details, contact details, and sometimes instant information like a PIN code, pass code or OTP (One-Time-Password). Such information is fetched illegally through someone working at the bank, or the companies providing financial services, etc.

There is a huge population in India and poverty is a big factor. Everyone wants to earn instant money. People have pain points like unemployment, illiteracy, negligence, and sometimes greed as well. These pain points are often the targets of fraudsters committing internet fraud. There are various types of cyber crimes and understanding them all is not easy for a layman. But when people are not vigilant enough to keep confidential information to themselves, they end up being a victim. 


Why are Internet Frauds Difficult to Deal With?

Online is the new normal since if it is not reachable on the internet, it is beyond people’s interest. But the biggest escape clause accompanying the internet is the dearth of identity. People are not easy to track. Suppose an FIR is registered with Delhi Police regarding an online fraud initiated through a phone call. During investigation, the police are able to trace the caller’s location somewhere in the jungles of South-Eastern India. However, the financial transaction took place in a city several kilometres away from both the victim and caller’s location. So how do online frauds work in a huge distance? There is usually a network whereby many people from different locations are involved. These people are smart enough not to keep using the same devices, internet connections, and mobile numbers for committing all such scams. The numbers get switched off, emails turn out to be deactivated, devices are disabled or destroyed after a while. Ultimately, even experienced cyber experts are not able to track the people behind online frauds. 


Types of Online Frauds in India

Spam

Unwanted and unsolicited messages, like advertisements, commercial promotions, etc. contribute to spams. They might be in the form of emails, SMS or posts over the internet, shared with a large number of people. Apart from annoyance and wastage of time, it may also contain ransomware or spyware capable of damaging the system or stealing user’s information. 


Online Scam

A scam may be understood as ‘a clever but dishonest plan for making money’. The idea is to deceive another person making them believe in the legitimacy of another. Later, the so-called legitimate resources end up taking away all your money. 

Suppose you get a call from someone pretending to be an official from the State Bank of India. The person tells you that your account needs KYC (Know your Customer) confirmation, or it will be deactivated. You end up in a panic and share all the confidential information with the so-called official, including your debit or credit card number, date of birth, one time password, etc. A few minutes pass and you receive an SMS in your phone informing payment of a huge amount of money. While you were panicking and sharing such confidential information on call, the other person was using another online device to fetch money from your account resulting in another credit card fraud in India


Spyware

It can be understood as a malicious software designed in such a way that enters a computer device, gathers personal information of the user, and redirects such personal information to a third party illegally. As the term suggests, the software maliciously spies on your device and leaks personal data without authority. Mostly, the device users are unaware of the presence of any such software invading their phone’s security since it is installed without the user's knowledge. This is also one of the reasons why you should not agree for all app permissions. Unauthorised applications or in-app permissions might be spying on confidential or personal information. 


Phishing

Have you ever received a text message or email that seems genuine and reads as “You are the lucky winner for a lottery amount of Rs 50 lakh. To encash, click on this link….”. The link after a few clicks requires you to enter information including bank details, which seems legitimate for transfer of lottery amount. If you click on such links and provide genuine details, you may end up being a victim of the biggest online frauds in India. When someone sends you an email or message and asks for personal information without any authority, or sometimes even impersonating an authoritative person, this is phishing. The aim of such messages is to commit internet fraud for illegal financial gains. 


Identity Theft

When someone impersonates themselves as someone else, usually some authoritative person, for making unsolicited gains, this is called identity theft. It may be financial, or social media identity theft. The internet frauds examples for identity theft include stealing people’s personal information and using such information for unsolicited gains. If you have been a victim of online frauds and wish to to act against it, internet fraud lawyers may help find the right path to safeguard interests. 



Internet Frauds Examples


  1. Job Frauds: Someone got a call from XYZ Pvt.Ltd. saying they got his/her reference from a mutual connection whose details can not be disclosed respecting company policy. The company requires a temporary data entry specialist on a work from home basis, and the task involves conversion of files from one format to another. The person will be charged Rs 500 for an hour. This person happily grabbed the opportunity and the amount was also transferred immediately. The other day, this person gets a call again to register with a Rs 500 fee and they will be getting a task worth Rs 2000 an hour. Again the task was accomplished and the funds were transferred. Then again, the person got a call saying the one time registration fee is Rs 25,000 and they will get a permanent job that pays Rs 70-80 thousand per month. Since the history helped establish trust, this person happily transferred the amount and then everything went blank. No phone calls were answered, the emails were deactivated, the person could not be located anywhere. 
  2. Financial Transaction Fraud: Someone received an email in the name of a renowned bank which required the person to fill a detailed form containing bank details. This was a so-called KYC (Know your customer) formality mandatory on an urgent basis. The person also received a call from a self-proclaimed bank official who confirmed that I have sent an email and the details need to be shared on an urgent basis. 
  3. Credit Card Frauds: Someone went to the supermarket and offered a credit card for making payments. The other person took the card and put it away from the owner’s sight, exercising himself for making transactional formalities before the PIN code is entered. This person actually put the card against another device containing a chip that copies the card information. In another scenario, a person lost his credit card in the supermarket just after making a payment. But he was not quick enough to report the same and get the card blocked. When this person made the payment before losing his credit card, someone was spying on his actions and noted the PIN code. In both the scenarios, the card owners suffered loss of money. 
  4. Free Stuff Trap: Another classic example to understand how online frauds work is this one. Someone got a message that they are lucky winners for the latest model of iphone. All they need to do is fill a form containing personal information and revert with the code received on their phones. The information sought is for a financial transaction and the code is actually a one time password (OTP) before a huge sum of money is transferred to a scammer with due assistance from the owner. 


To avoid such online frauds, read RBI guidelines for unauthorized transactions and safeguard the money in your banks.


The internet fraud examples are endless. People have a variety of stories on how someone approached them and fooled them into losing money. Sometimes, even the well-educated and smart people end up being the victims of online frauds. That is why the government authorities as well as financial services keep advertising with internet awareness campaigns. It is important not to disclose confidential information on your own. Because it also helps get back the amount taken away through internet frauds through the concerned banks or interference of the Reserve Bank of India (RBI), provided that the same is complained of without delay. Also make sure to register a complaint in cyber cell so that you get some backing for cyber protection of your devices, etc. 

Written By:
Ridhi Khurana

Ridhi Khurana

Gurgaon

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