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types of bank frauds

10 Types of Bank Frauds

The use of online shopping, online banking, digital payment has increased a lot, specially after Covid. People buy things, pay taxes and do many financial transactions online sitting at home. Digital wallets made online payments more easier. You go anywhere right from a shop in a mall to vegetable seller sitting on a street, everyone accepts online payment in the form of digital wallet, bank account. Cashless digital mode of transaction has invited fraudsters to find some loophole and steal money from users. Reserve Bank of India has been trying to make people aware of such fraudulent related to digital payments. Lets read few types of such banking frauds.

Read also: Pros and Cons of Cashless Economy

Bank frauds can take many forms and can be perpetrated by individuals or organized groups. Here are some common types of bank fraud:

  1. Phishing
  2. Spoofing
  3. Vishing
  4. Skimming
  5. Unknown/Unverified Mobile Apps
  6. Screen Sharing Apps
  7. SIM Cloning or SIM Swapping
  8. Through Search Engines
  9. Through QR Code Scan
  10. Through Social Media

1. Phishing:

Phishing form means fraudsters act as a reputable entity or a person in your close circle in email or other form of communication. Fraudsters will commonly use phishing emails to distribute malicious links or attachments that can perform a variety of functions. Some will extract login credentials or account information from victims. They collect victims personal information from his social media account like job profile, family background or events occurring in coming time, emails addresses and send email using such personal information so users believe it real and click on malicious link.

Read also: FinTech : The Revolution and Future in Banking

2. Spoofing:

Website spoofing means fraudsters create replica of trusted website which looks like original bank, ecommerce or search engine website. Users receives links to such phishing website through email, SMS, social media platforms, etc. Many users click on the link without checking Uniform Resource Locator (URL) and put confidential information too like account number, password, One Time Password (OTP). These phishing websites are created to collect these confidential information from users and steal money from their bank account.

3. Vishing:

Fraudsters act as bankers, government officials, firm executives, insurance agents, tax department officials, others and call users and win confidence by giving few details like name, birth date. They convince users to share OTP, Card Verification Values (CVVs), Pins by pretending emergency to block an unauthorized transaction, payment required to avoid penalty or may be giving bribe of attractive discount.

4. Skimming:

Skimming device is installed in card slot of ATMs or merchant payment terminal. This machine reads and stores users information from credit/debit card, ATM card. Fraudsters steal this information and PIN through camera installed in ATMs to steal money from users back account. Skimming can occur in ATMs, restaurants, shops or other locations.

Read also: Punjab National Bank Scam

5. Unknown/Unverified Mobile Apps:

Fraudsters circulate certain app links through social media, SMS, email or others. These apps look like original ones and when customers download unverified app on mobile phone, computer or laptop, the fraudsters get full access of user’s device and they can steal confidential details stored on the device and messages/OTPs received before or after installation of such apps.

6. Screen Sharing Apps:

Fraudsters trick the customer to download the screen sharing app and through such apps, fraudsters can view the activities going on user’s screen of mobile or laptop. Fraudsters can access the financial credentials of users and can transfer funds or make payments.

7. SIM Cloning or SIM Swapping:

Fraudsters may gain duplicate Subscriber Identity Module (SIM) card (including electronic-SIM) for the registered mobile number linked to the customer’s bank account. Fraudsters use the OTP received on customers SIM to carry out unauthorized transactions. Fraudsters generally act as telephone network staff and gain the personal information of users by showing attractive offers like upgrade SIM card from 3G to 4G, or additional benefits on the SIM card.

8. Through Search Engines:

Users use search engine to find information regarding Aadhaar update, banks, insurance policies, others. These contact details are modified by scammers as they belong to original entity. Customers contact these unknown numbers displayed on search engine. The fraudsters ask customers to share their card credentials/details for verification.

9. Through QR Code Scan:

Fraudsters convince customers that they are sending money(prize) through QR code. They trick customers to scan malicious Quick Response (QR) code, enter money(prize amount) to be received and enter OTP. But this malicious QR code is scanned to send money and not to receive the money. So the amount is deducted from customers account and not from senders account.

10. Through Social Media:

Now a days, people spend so much time on social media and they keep updating their account with recent activities happening in their lives. So, fraudsters get enough information to dupe the account. Fraudsters create duplicate account on social media platforms like Facebook, Twitter, Instagram and ask user’s family and friends to send money under the name of medical emergency or other problem. Fraudsters using fake details and gain trust from users and get their personal information and then blackmail them.


We read 10 different types of bank frauds. There are many other types of bank frauds too like loan fraud, cheque fraud, etc. Increased use of online banking, digital payment applications has increased the frauds more. Reserve Bank of India(RBI) has been increasing awareness regarding types of frauds happening and how customers can prevent it. To save your hard earned money from fraudsters, you should be careful by checking authenticity of app before downloading, website(as duplicated website has slightly different logo or layout), a person talking as representative of bank, insurance company or any financial institution.

Post Author: ashwini

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