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Modus Operandi of Financial Fraudsters: Part I

Updated: Jul 8, 2022

The population is on the rise and so is the demand for convenience. For as long as humans have existed, there have been transactions for any good or service provided by another human. To think of transactions, we have come a long way from the barter system to transacting using gold and other precious metals and finally paper currency which has further evolved and is now basically e-money or plastic money. But we do not need to dive so deep into the history of money, which would deviate us from the topic at hand. In today’s world, most transactions happen via digital mode. Online transactions or digital modes of payment are now being preferred over conventional cash transactions due to convenience and this is not the only reason they are being promoted, they also help in achieving the national goal of financial inclusion substantially.

Like every coin has two sides, it should be understood that online/ digital transactions have their share of problems too like a fraud. Fraudsters are getting smarter and using innovative techniques to steal from the masses. People who are new to this technology or who are not so tech-savvy are often at the risk of facing such problems. These people might be new to the entire online transaction ecosystem and could endanger their entire life earnings. This piece will try to cover the most common financial frauds committed by fraudsters, their modus operandi, and suggest preventive measures too.

1. Phishing Links

Modus Operandi

  1. Third-party websites are created by the fraudster which is very similar to the existing genuine websites, these could be a search engine or an e-commerce website. They are designed so well that it is very difficult for a targeted user to distinguish them from the original website.

  2. The next step involves luring the targets into using visiting the fake platform. This is done by circulating the links through emails/ text messages and even social media.

  3. Gullible consumers might not check the entire URL in detail and just open the link sent across by glancing at it.

  4. These links are deceptive and look very similar to the original link but then the targets are redirected to the phishing website. To make it look more authentic the fake website might even use the real name and logos with minor tweaks.

  5. The targets end up entering sensitive information and credentials on the website and they are then copied/ sent to the fraudster who uses this data later.


The user must be very careful while entering credentials especially of financial nature into any website. The URL must be thoroughly seen and verified to avoid entering sensitive information in the wrong places. Another great tip is to delete any unknown or suspicious links that are received via e-mails/ text messages so they are not accessed later on.

2. Vishing Calls

Modus Operandi

  1. Calls are made by fraudsters who pose as company executives/ government officials/ insurance agents or even bankers. The imposter tries to collect as much information as he/ she can regarding the financial credentials of the targets. They even try to make the call sound authentic by confirming the name of the person or date of birth or any other credential, this helps in gaining the confidence of the targeted user.

  2. Sometimes, it may so occur that the user is tricked or even pressurised into sharing the required credentials by faking an emergency like stopping or block a suspicious transaction or urgent transfer required to stop the penalty or lure them by citing discounts or fancy services. Once the credentials are received, they are then misused.


As per the booklet on modus operandi of financial fraudsters issued by the office of Reserve Bank of India (RBI) Ombudsman, Mumbai, and genuine entities including financial intuitions and bank officials never ask to share any sensitive financial information like the Card details/ Card Verification Value (CVV)/ One Time Password (OTP)/ Username/ Password.

3. Frauds/ Scams using Online Selling platforms

Modus Operandi

  1. This is a very sneaky method of stealing money from a seller. The imposter or the fraudster in this type of attack might pose to be an online buyer on the online selling platform who is interested in your product.

  2. This type of fraud may use the new and popular Unified Payments Interface (UPI) platform. The buyer will “request money” instead of sending it to the seller and insist on approving that request, which will eventually pull money from the target’s bank account.


As per the booklet on modus operandi of financial fraudsters issued by the office of Reserve Bank of India (RBI) Ombudsman, Mumbai, it warns the users to always remember that there is no need to enter your password/ Personal Identification Number (PIN) anywhere when the user has to receive money. And UPI or any applications for that matter ask the user to enter the PIN to complete transactions which means that the user will spend money and not receive it. Hence, one should be very careful while purchasing/ selling online.

4. Fraud using Unverified/ Unknown Mobile Applications

Modus Operandi

  1. Fake and malicious Applications can gain access to the information stored on the mobile phone device.

  2. This method is similar to phishing where application links are widely circulated through Instant Messaging/ social media/ text messages, etc. The names used to lure customers look very authentic and similar to popular existing services but in reality, the targets are just redirected into downloading a fake application.

  3. After the mobile phone device is infected with the fake application, the fraudster gains access to data on the device and exploits it.


The booklet on modus operandi of financial fraudsters issued by the office of Reserve Bank of India (RBI) Ombudsman, Mumbai, suggests that applications from unknown/ unverified sources should never be downloaded.

5. ATM card skimming

Modus Operandi

  1. This type of fraud involves the fraudster installing skimming devices in Automated Teller Machines (ATM) which end up stealing data from the user’s card.

  2. Pinhole cameras and dummy keypads may be installed at the ATM which capture the Personal Identification Number (PIN) without the knowledge of the user.

  3. In some cases, it might also happen that the fraudsters are pretending to be customers and stand real close to the target and have their eyes buried at the keypad to know the PIN.

  4. After the required information is collected, the fraudsters might create fake cards or duplicate cards and use them to withdraw money from the targeted customer’s bank account.


To keep the customers up-to-date and safe the booklet on modus operandi of financial fraudsters issued by the office of Reserve Bank of India (RBI) Ombudsman, Mumbai, suggests that while visiting an ATM, always cover the keypad with your hand while entering the PIN. Other suggestions include, never sharing your PIN with anybody or entering it in the presence of other people. And, lastly, whenever visiting an ATM, check the machine properly for any external devices attached near the keypad or card insertion slot.

In this piece, we tried to cover five out of the many fraud techniques deployed by fraudsters to steal financial credentials using fraudulent transactions in Banks. Other tricks might include Online Job Fraud, Impersonation through Social Media, and frauds by compromising credentials on results through search engines among others. However, there are also fraudulent transactions that happen in the Non-Banking Financial Companies (NBFCs) which include, Money circulation/ Ponzi/ Multi-Level Marketing (MLM) Schemes fraud/ fake advertisements for extending loan by Fraudster Company or even an OTP based fraud among others. In the subsequent articles more can be learned about the above-mentioned frauds in detail along with general precautions that can be taken for financial transactions.


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