BE(A)WARE: RBI's notice on modus operandi of financial frauds

The Reserve Bank of India (RBI) on Monday, released a booklet on modus operandi of financial frauds, titled ‘BE(A)WARE’, as a part of the public awareness initiative by its Consumer Education and Protection Department.

RBI, while enhancing customer convenience, furthered that “as the speed and ease of doing financial transactions has improved, the number of frauds reported in retail financial transactions has also gone up. Fraudsters have been using innovative methods to defraud the common and gullible people of their hard-earned money, especially the new entrants in the use of digital platforms who are not entirely familiar with the techno- financial eco-system.”

RBI claims that this booklet, which has been compiled from various incidents of frauds reported as also from complaints received at the offices of RBI Ombudsmen, provides information to those who are inexperienced, or not so experienced, in digital and electronic modes of financial transactions.

RBI’s Ombudsmen Offices and the Consumer Education and Protection Cells (CEPCs) also revealed that sharing of confidential information by the customers, knowingly or unknowingly, is one of the major causes leading to financial fraud.

India’s central bank describes that this “booklet is intended to create awareness among the members of public about the modus operandi adopted by fraudsters to defraud and mislead them, while also informing them about the precautions to be taken while carrying out financial transactions.”

“It emphasises the need for keeping one's personal information, particularly the financial information, confidential at all times, beware of unknown calls/emails/messages, practising due diligence while performing financial transactions and changing the secure credentials/passwords from time to time. Hence the title BE(A)WARE – Be Aware and Beware!” RBI further added.

According to RBI, the booklet aims to enhance public awareness about various types of financial frauds and elaborates on safeguards against commonly used fraudulent techniques, such as SIM swaps, vishing/phishing links, lottery, etc., including fake loan websites and digital apps.

The book is further divided into three parts -- Part A provides information of commonly observed modus operandi; Part B suggests precautions to be taken against fraudulent transactions relating to banks and non-banking financial companies (NBFCs); and Part C explains the general precautions and digital hygiene to be followed by the public.

RBI’s booklet also emphasises one’s need for keeping their personal information confidential at all times and being mindful of unknown calls/emails/messages. It also outlines the due diligence measures to be followed while undertaking financial transactions.