Things You Must Do to Keep Your Account Safe from KYC Fraud

Personal Finance

Every year, August 1 is marked as “KYC Compliance and Fraud Prevention Day.” This day is to make people aware of KYC fraud and how to be safe. As per the RBI, all banks and NBFCs must have KYC (know your customer) details for all their customers. This rule requires that both new and old accounts have all the details of the account holders. You can finish this process online or by going to the office of the bank or NBFC. But now, many scammers have started fooling people by posing as officers and asking for details and an OTP for KYC verification.

Many people fall prey to them and lose a lot of money from their accounts. Banks, NBFCs, and the RBI are trying to make people aware of KYC fraud, which is why KYC Compliance and Fraud Prevention Day has started. While it is hard to get rid of this scam entirely, there are still many steps that you can take to be safe from KYC fraud.

Read on to learn what you must do to keep your account safe from KYC fraud.

What is KYC fraud?

KYC fraud is a big issue in present times. With updates in technology, fraudsters have also updated their methods. They will send you a WhatsApp message, SMS, or email asking you to click on a link to complete your KYC. To make you panic, they will state that either your account will be closed or frozen, and you will not be able to use the money. However, if you click on the link, you will be directed to a fraudulent website where they will attempt to steal your personal information. This information is then used to defraud you by taking money from your bank account or online wallet.

Some fraudsters may also call you, posing as bank or NBFC workers. They will inform you that your account’s KYC has not been completed and will then request some information. Once they get these details, they will ask you to share an OTP sent to your phone. But as soon as you give the OTP, money is gone from your account or wallet.

Many people fall prey to KYC fraud, which is why KYC Compliance and Fraud Prevention Day was started.

How to keep your account safe from KYC fraud

You can take many steps to keep your account safe from KYC fraud. Here are several crucial aspects you must focus on:

  • Never share your details: Your bank or NBFC will never call to ask for your details. Also, they will not send a WhatsApp message, SMS, or email for this. They have all of your information in their records and can easily retrieve it from their system. Even if any of your accounts are not KYC compliant, you will receive a letter or call asking you to come to the branch with the KYC documents. As a result, never share your KYC information over the phone or the internet. Make it a point to visit in person and then complete the process. 
  • OTP is not required: In the finance world, OTP is used to either log in to your online account or complete a money transfer. There is no need to share an OTP for KYC. If any person is asking you for an OTP for KYC, it is a red flag. Do not fall prey to this KYC fraud. There is no need to reply to any message or answer any call asking for an OTP to complete KYC. 
  • Look for errors: While scammers think they are smart, they are not. Highly qualified people at the head offices or approved agencies draft the messages or emails shared by banks and NBFCs. They pay a lot of attention to grammar and spelling errors. So, read the message or SMS carefully and look for spelling or grammar issues. If the message reads incorrectly, it is better to ignore it or report it to the cyber cell of the local police. 
  • Quality of message: As stated above, highly experienced people in head offices design emails and messages for banks and NBFCs. If not, people at a marketing agency create the designs. Hence, the quality of emailers will be quite good. It will likely be a KYC fraud if you get an email with grainy graphics or funny fonts. 
  • CVV and PIN: If you use a debit or credit card, you must know that the CVV and PIN are two crucial details. These details are vital to completing payments through debit or credit cards. They have nothing to do with your account’s KYC. So, to be safe from KYC fraud, you should never reveal your PIN or CVV to anyone. If you share these details with anyone, you are at serious risk of becoming a victim of fraud. 
  • Remain calm: No bank or NBFC officer would threaten to suspend your account in the absence of KYC. You should remain calm and refuse to share such details with anyone. For any doubts, call the official helpline of the bank or NBFC. No bank or NBFC would ever send such a message to a customer. Their tone will never be threatening.

KYC fraud is a serious problem, and many people fall prey to it daily. Banks, NBFcs, and RBI need to create more awareness around this issue. It would also help if you also learned more about the menace of KYC fraud. For the latest facts and tips on staying safe from KYC fraud, you can visit Piramal Finance. They have many articles and blogs to help you learn how to keep your account safe from fraud.