Financial frauds and precautions

Protect yourself from ponzi schemes, unregistered collective investment schemes (cis), identity theft, phishing or tele calling scams, fake payment links and QR codes, KYC fraud, skimming or card cloning. Remember to take precautions during credit card transactions over phone and secure your computer, laptops and mobile/tab device.

Below is a list of things to do to safeguard your hard-earned money and what you need to remember to protect yourself from financial fraud and illegal schemes.


  1. Distribute savings and deposits across multiple banks.
  2. Check the financial health of the institution you are interacting with.
  3. Don’t fall for high interest rates.
  4. During crisis, look out for RBI’s directives. Visit in such instances.
  5. Before investing thoroughly do your background research.
  6. Always understand what is written in the fine print.
  7. Never make investments based on tips, rumours or word-of-mouth.
  8. Always conduct your own research and verify the details of the party you are dealing with before investing your hard-earned money with them.
  9. If you are new to investing or unsure about where or how to invest, consult a registered investment advisor/ expert. It is better to pay a consulting fee as against losing all your money in bad investments.
  10. Always deal with registered entities.
  11. While dealing with brokers or other intermediaries, maintain a written record (email or messages) of all instructions / orders placed.
  12. Always look out for information from authentic sources before making any investments.
  13. Verify before acting upon suspicious emails.
  14. Always use strong passwords.
  15. Change your password and PIN regularly, say once in a month.
  16. Always check all your statements such as those for your bank accounts, demat accounts, e-Wallets, credit and debit cards etc. without fail.
  17. In case of any discrepancy or unknown/unauthorized transaction, notify your bank or card issuer immediately.
  18. Subscribe to mobile SMS alerts for all major transactions.
  19. Check for URLs that may seem legitimate but are spelt differently or with additional characters or words – for example or
  20. Do not download any attachment or install apps from unknown sources.
  21. Register your mobile number for Do Not Disturb (DND) service to avoid getting spam calls.
  22. Understand standard procedures before using new financial services or facilities.
  23. Take out some time to familiarize yourself with features offered.
  24. Always check the link or QR code shared by strangers before pressing the OK or Submit button on your computer or mobile.
  25. Conduct all transactions including KYC procedures either on the official website or the app or in-person through an authorized agent (after verifying its credentials).
  26. Report all suspicious activities to your e-Wallet or digital payment operator as soon as you realize it. Even if you have not lost money, report any doubtful communication to concerned authority. It helps them to prevent frauds and alert other users.
  27. Remember, no government department, regulator like SEBI or RBI, insurance company or bank or credit card issuer etc. will ever call you to ask your PAN or bank account number or things like that.
  28. Never give your card number, CVV number or PIN to anyone.
  29. Never share card details over a phone call, SMS or email.
  30. If a wireless card machine is not available, make the payment yourself at the payment counter. Do not give the card and PIN to anyone. Idea is that your debit or credit card should never be out of your sight.
  31. If you use an old card, upgrade to a card with a smart chip that offers additional security to the data on your card.
  32. If you lose the card or notice unknown transactions, inform your bank and block the card immediately. To ensure this, always keep the hot line numbers of your bank / card issuer handy.
  33. Keep a tab of all card transactions (either through charge receipts or SMS alerts) and tally it every month with the transaction statement.
  34. Do not share your card number on telephone where others can hear.
  35. While at ATM, cover the keypad with your hand while entering the PIN. This would prevent someone recording the PIN using a hidden camera.
  36. It is always better to use those ATMs which are guarded or located close to a bank branch. There are lesser chances of someone manipulating the machine by inserting a secret card cloning device / hidden camera at such places.
  37. Set the amount limits for different types of spends on your credit card carefully as per your needs. This will prevent unwarranted transactions beyond a desired limit.
  38. If you do not need to travel out of country, it would be good to disable international transactions on your debit and credit cards.
  39. It is better to request your bank to issue a new debit or credit card, after you have used it while travelling to some high risk countries.

Adapted from National Depository Securities Limited Investor Protection Fund Trust – NDSL Newsletter 2020 – The Financial Kaleidoscope January 2020 (ARCHIVED VERSION)

Disclaimer: The contents of this page do not constitute investment advice. Please contact your authorised investment advisor before making any investments or acting upon the contents of this page.