Digital payment systems, although a new concept, have seen significant growth over the last few years in India. Supported by country-wide internet and smartphone penetration, cashless payment systems have become popular thanks to the availability of various platforms and integrated systems like UPI (Unified Payment Interface). Studies show that India is one of the leading countries in terms of fintech (financial technology) integration, with the total volume of online transactions increased by almost 9 times within the last 5 years.
Unfortunately, with the surge of web-based transactions, the number of online fraud and scams has also skyrocketed across the nation. Scammers target new users who lack certain tech know-how, and despite the added layers of security in the payment gateways, they often succeed at performing unauthorised transactions.
Brief overview of online scams and frauds in India
- 49,455 cybersecurity incidents were reported to the authorities in 2015 alone.
- 11,997 cases of online, debit and credit card fraud, as well as ATM based frauds, were reported between the Financial Year of 2015-2016.
- Rs.100 crore was reported as cyber fraud between 2017 and 2018.
Both the Government of India and private merchants have taken notice of the present security threat, and have taken several steps to reduce the risks associated with online payments. A zero-compromise approach against all types of internet frauds taken by the Reserve Bank of India and other financial institutions as well have strengthened the security of new and existing digital payment systems by a substantial margin.
Moreover, there are several steps a user might follow to reduce the risks associated with all types of online fraud. Implementing these simple steps can help an individual to keep a close check on their safekeeping during virtual transactions.
Steps to reduce the risk of online scams
Here are some of the basic steps one can take to keep away from various forms of online fraud.
- Use strong passwords – A strong password is one of the most fundamental precautionary measures to secure against online scams and fraud. It prevents criminals from accessing one’s online accounts, especially of shopping sites, where one may have their debit or credit card information saved. Users should always set a unique password, individually for every website, with a combination of letters, numbers and special symbols, while logging in. Moreover, it should not relate to any personal information like birth dates, names, or address. These simple measures can prove significantly beneficial to prevent online shopping frauds.
One should also use two different sets of passwords (or PIN) for 2-factor verification processes. Many online payment merchants use 2-factor authentications to add an additional layer of security to each transaction. Setting a similar password or PIN allows criminals to negate such safety measures.
- Using trustworthy websites – False websites to farm user data has become a common occurrence in recent years, accounting for multiple cases of identity theft as well as payment and online banking frauds. Even incidents of fake twitter handles representing the NPCI official helpline have come up in recent years, tricking customers into revealing their personal and banking details online.
Users should always check for ‘https’ enabled websites while performing online transactions. Also, for microblogging sites like twitter, it is better to check for verified accounts before initiating communication. Moreover, one can also avail an Identity Theft Cover offered by Bajaj Finserv under its Pocket Insurance & Subscriptions for financial protection against legal expenses, loss of wage, or obligatory payments to mitigate the repercussions of such an unwarranted incident.
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- Avoiding public internet – Wi-Fi available at public places like stations, coffee shops, etc. often lack the necessary security protocol for secure data transmission. Using such networks for financial transactions should be avoided at all times to prevent internet fraud. Criminals often eavesdrop on these networks to gather private information for future use.
- Safeguarding private information – Credit card, debit card, as well as bank details, should always be kept private to prevent any type of fraud. Scammers can use these for illicit purposes; they often try to acquire such information over the phone, email, and other modes of communication.
One should also remember to block their credit and debit card immediately if they are lost or stolen. It will prevent any unauthorized transaction afterward. One can also avail a card protection plan that allows blocking of all cards with only one phone call.
- Avoiding phishing scams – Phishing refers to various black hat processes to collect user data for malicious purposes. Scammers usually target users via phone or email, and they might even send malicious software like keyloggers via mail.
To prevent such online frauds, one should avoid opening or downloading attachments from emails coming from unsolicited sources. A good firewall or online antivirus program will also help detect and blacklist such emails. Insurance covers like the Purse Care plan can also prove beneficial as it provides complimentary fraud protection and antivirus software to financially cover a user from such threats.
Following the above mentioned steps can significantly reduce the chances of online scams and frauds. It is necessary to follow and implement these guidelines to safeguard one’s private information online. Having an insurance plan can help mitigate the financial losses in case of worst-case scenarios.