Home > Blog > Types Of Bank Frauds

Types Of Bank Frauds

IamCheated.com Research Team | August 27, 2018  2:48:pm

Bank frauds in India are increasing and banks had reported frauds at an average of at least one each hour. According to the report, there has been an increase in the amount vis-a-vis bank frauds during the year 2017-18. Public sector banks accounted for 85% of nearly 6,500 frauds, amounting to more than Rs 30,000 Crores.  Indian banks reported a total loss of about Rs 70,000 Crores to frauds during the last three fiscals.

There are different types of bank frauds that take place and bank frauds can be classified as insider frauds and outsider frauds. In this blog, we will discuss the various kinds of frauds that take place at banks.

You May Also Watch:

Types Of Bank Frauds

1. Fraudulent loans

Fraudsters take out money from banks in the name of loans. Banks always come forward granting loans, if they believe that the money will be repaid with interest. In case of the fraudulent loan, a borrower is a business entity controlled by a dishonest bank officer or an accomplice. After availing a loan, the borrower declares bankruptcy and the loan will not be repaid. In some cases, the borrower may even be a non-existent entity and the loan will be availed just to steal a large amount of money from the banks.

See Also: Biggest Banking Scams In India

2. Identity theft

In case of identity theft, fraudsters steal your identity and use it to apply for a personal loan, two wheeler loan or a credit card with a bank. After fraudsters have availed a loan in your name, the responsibility of repaying falls on you. You will be sent a notice by the bank and if you fail to repay the loan, your credit score will come down and you will be marked a loan defaulter.

Checking credit report frequently helps you know if you are a victim of identity theft.

3. Card Skimming

Card skimming is a type of bank fraud, where a small electronic device called a skimmer is used by fraudsters to steal card information. The skimmer is usually installed in the POS machine or ATM. When a card gets run through a skimmer, the device captures and stores key information from the magnetic strip of your credit/debit card. This information is copied to the magnetic strip of a blank card and used by fraudsters to steal money from your bank account.

Many people in Kolkata recently lost lakhs of rupees to card skimming, in just 7 days. So, you have to be careful when you insert your card in an ATM and it’s advisable to replace your magnetic plastic card with a chip-based card.

4. Phishing

You might have received an email stating you are eligible for an interest-free loan, you can avail a loan without checking your credit score and so on. But, all these emails are not genuine. These emails are called phishing mails. The intention of sending these emails is to steal bank details. Many people believe these emails to be genuine and provide their bank details but finally, they end up losing money.

5. Vishing

Vishing is also called voice phishing. In this fraud, fraudsters pose saying they are from a reputed Organization and ask you for personal banking details. After collecting your personal banking information, they use it steal money from your bank account. 

Fraudsters call claiming to be bank executives and say that your credit or debit card account will expire and it has to be renewed as soon as possible, to prevent it getting blocked. They also claim that they will help in renewing the account and you will be asked to give your personal information like CVV number and OTP. In case you provide CVV number and OTP, money will be fraudulently withdrawn from your bank account. Online Fraudsters will convince you, speaking just like professional bank staff. Always remember, banks never ask you to provide personal information over the phone.

Fraudsters will call, posing as executives from Airtel or Jio and tell you that they will help link Aadhaar with the mobile number and collect personal information to conduct fraudulent banking transactions.

Have a complaint against any company? IndianMoney.com's consumer complaint portal Iamcheated.com can help you resolve the issue. Just visit IamCheated.com and lodge your complaint.

CIBIL Meter