Insurance

What Is Online Fraud? How And Why Does Online Fraud Take Place?

Online fraud is a common practice undertaken by scammers or hackers who use electronic or internet mediums to deceive users and steal their personal and confidential information. With the growth of e-commerce websites, internet banking, online transactions etc., an individual’s financial details like credit or debit card number, OTPs and others are at an all-time high risk of being stolen. According to reports published in Hindustan Times, India has witnessed a loss of about Rs.615.39 crore through 1.17 lakh in the ten years preceding 2020, in online banking fraud cases.

Therefore it is very crucial for everyone to learn about these online duplicities so that they can remain aware and adopt adequate measures of fraud protection.

Why is online fraud taking place?

Several reasons have contributed to the growth of online frauds in the country, like:

  • Lack of proper prosecution in such cases.
  • Fraudster creates multiple accounts and hence makes it difficult to detect them.
  • Stealing online data and information has become easy and less time-consuming.

How does online fraud take place?

There are several types of internet fraud techniques that are used by hackers to get hold of confidential details like:

  • Phishing

This is the most common technique utilise to carry out internet scams. With this technique, fraudsters send emails or other forms of electronic communications designed in a manner that they appear to have been sent from authentic business organisations. This convinces the recipient to share details about credit cards, debit cards, UPI, etc. 

In order to prevent the financial liabilities arising out of a fraud like this, a card protection plan like Wallet Care extended under Bajaj Finserv Pocket Insurance & Subscriptions can prove to be extremely beneficial. It offers financial coverage in case of any fraudulent transaction and also allows blocking all payment cards with just one phone call.

  • Online shopping frauds
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The trend of online shopping has witnessed an immense upscale in recent times. Often fraudsters set up fake shopping websites to steal details about credit or debit cards. These websites display products at very cheap rates and do not generally have a cash on delivery option. Once the orders are placed, fraudsters either deliver fake products or do not send any product at all.

  • Identity theft

Fraudsters often steal your identity details from various sources and use them to conduct different types of internet banking frauds, like applying for loans or credit cards with financial institutions. The entire liability of repayment is borne by the victim, leading them to incur substantial financial losses. To avoid such unauthorised transactions and maximise financial protection, a cyber security cover will prove immensely helpful.

Credit card reward point fraud

Several online frauds also take place in the name of credit card reward points. Fraudsters connect with credit card holders pretending to be from a respective card issuing company and convince them to share confidential details like card number and OTP to offer the redeemed benefits. To enforce protection against these types of activities, it is important to avail a fraudulent charges cover that will offer financial protection against any unauthorised transaction made with your credit card.

Apart from the above mentioned techniques, there are several other methods like spoofing, pharming, form jacking, etc., which are used by scammers to carry out illegal activities. These make availing the right fraud prevention plan extremely important.

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