Financial Glossary Header Image

Financial Fraud

Updated on March 2, 2023

Financial fraud is quite prevalent and the digital world has made it even more dangerous for the general public. Financial fraud happens when a person is financially harmed through misleading, deceptive, fraudulent or similar practices or products. This can be done through a variety of methods such as identity theft, phishing, card skimming, sim cloning, fake advertisements, OTP based frauds, ponzi schemes, online marketing etc. Fraudsters and criminals are getting more advanced and aggressive with their scams and staying alert at all times along with prevention and protection are some of the ways to escape getting trapped in a Financial Fraud.

How can investors protect themselves against financial frauds?

Some important points related to Financial Fraud are:
It is important to understand how financial fraud can harm and how to protect against such occurrences:
1. Any financial fraud incident should be immediately reported to the appropriate agencies and/or law enforcement entities.
2. Irrespective of the type of financial fraud, any fraudulent charge or incident should be disputed and recorded with the appropriate department through proper channels.
3. Any seemingly fraudulent transaction should be cancelled and card/account blocked as soon as it is discovered.
4. All documentation/evidence related to the financial fraud should be filed and a copy retained. These may include bank statements, credit card slips, reports, tax invoices, e-mail copies, transaction slips, mobile phone evidence such as OTP or text message etc.
5. Strong passwords, encryption, virus protection mechanisms, restrictive use of accounts, safety of cards/wallets, prevention of unauthorised access of accounts etc. are some of the methods of protection against financial fraud incidents.