To make banking experience convenient for customers, several banks have provided facilities like off-site ATMs with dropbox, doorstep banking to save customers the hardship of having to visit the branch for simple requirements such as cash withdrawal, cheque deposit or document submission. These conveniences have become weak links which are exploited by fraudsters in the brick and mortar space. Some of the modus operandi are:
Tampering of equipment: Fraudsters often tamper with ATMs or point-of-sale terminals at merchant establishments. They use skimming devices to capture card details and PINs. This modus operandi is frequently employed at off-site ATMs without security guards. The skimming devices are installed via an overlay placed over the card insertion slot that records the customer data such as name, CVV, etc, from the magnetic stripe. An overlay that covers the whole ATM faceplate is embedded with cameras and card-slot and keypad overlays to capture the PIN. The stolen data is then used to clone the card for use in physical environments (example, merchant point-of-sale systems) or online transactions on international e-commerce sites that don't require second-factor authentication like OTP (One-Time Password).
Identity theft: Documents submitted for legitimate purposes like account opening, loan or credit card applications often get intercepted and tampered with for fraudulent activities involving identity theft, misusing victims' personal information. Fraudsters use these documents for loan frauds by opening bank accounts and get the loan amounts disbursed into such accounts over which they have control. This leaves the original person with the responsibility to repay the loan without even having had access to the funds. Another route is to use documents to open accounts in the name of the original person only to deposit cheques drawn in his favour and intercepted from the ATM drop box.
Cheque alterations: With the increasing prevalence of off-site ATMs, banks encourage customers to deposit cheques in drop boxes located at the nearest ATM. These cheques are later collected by bank-authorised vendors for processing. This process is vulnerable to misuse by fraudsters who resort to chemical alterations allowing them to alter the payee and/or amount before cashing or depositing it.
Call centre fraud: Call centre fraud is a form of social engineering in which a fraudster contacts an organisation’s call centre pretending to be a legitimate customer. They then trick the call centre representative into giving them access to an account or performing fraudulent or malicious actions within an account.
Dos
Look before you use an ATM: At off-site ATMs without security guards, check for evidence of tampering. Don’t use ATMs that have damaged or loose parts or look as if they have been tampered with. Cover the PIN pad when you enter your PIN or Another way is to opt for cardless transactions at ATMs.
Positive Pay: For cheque payments, the positive pay feature enables you to pre-inform your bank about the details of the issued check and the intended beneficiary. This helps prevent misuse through alterations or duplication of checks by unscrupulous individuals.
Don’ts
Do not share Aadhar, Pan card copies without masking to avoid misuse.
Do not handover self attested copies of property papers, identity documents or income papers to middlemen without specifying the end purpose for which the attested documents have been handed over.
Do not just sign application forms and leave it to the salesperson to fill up the details. Ensure to fill up entire application forms for opening an account, loan, card yourself ensuring the correct details are filled in especially when it comes to the contact number, email, etc.
Conclusion
By understanding the modus operandi employed by fraudsters and adopting good practices, individuals can protect themselves in the fast paced era of convenience banking. Awareness, vigilance, and immediate action are key to safeguarding against fraud and securing personal information. Jankar Baniye, take control of your financial security and stay proactive to ensure your personal information and financial interests are protected.
(Salil Datar has over three decades (including CXO level) in banking, neobanking and cross border financial services)
