May 26, 2022

The Reserve Bank of India (RBI) has cautioned individuals on the rising prevalence of scams using modern communication methods like SMS, email, instant messaging, voice call and OTP. The central bank has released a booklet titled ‘BE(A)WARE – Be Aware and Beware!’ for raising awareness about this matter.

The RBI stated that the rising number of scams was directly related to the increasing prominence of digital payment systems since the COVID-19 pandemic struck.

However, as the speed and ease of doing financial transactions improved, the number of frauds being reported in retail financial transactions has also gone up. Scamsters have been using innovative methods to defraud 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 ecosystem, RBI has said in the booklet.

Some of the cases that RBI highlighted include fake loan and OTP scams. In the case of the former, scammers pretend to be representatives of banks and NBFCs and offer loans to individuals with attractive interest rates and offers. When individuals approach the scammers to apply for these loans the scammers charge the victims money upfront in the name of various fees before absconding.

The OTP scam happens when scammers SMS, email or call victims with offers of loans or extending their credit card limit. The scammers then provide fake phishing links or gather important details over calls, including the OTP, under the…

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