Beware of Know Your Customer (KYC) Frauds

Know Your Customer (KYC) is an essential identity verification process used by businesses to authenticate their customers. This procedure is mandatory for both new and existing customers, periodically, to prevent identity theft, terrorist financing, money laundering, and financial fraud. As mandated by the Reserve Bank of India (RBI), KYC involves collecting the following customer details:

• Legal name
• Identity proof
• Correct permanent address as per identity proof
• Legal status of the entity or person

What are KYC Frauds?

KYC frauds occur when fraudsters exploit the KYC process to steal personal details and gain unauthorized access to banking accounts. These criminals often pose as bank representatives, sending fake SMS/text messages or making fraudulent calls to trick customers into sharing sensitive information. This has led to many unsuspecting individuals losing their hard-earned money.

How Do KYC Frauds Take Place?

Modus Operandi - In Case of Fraudulent Calls:

1. Fake Call: Fraudsters call victims, pretending to be bank representatives, and warn them of account suspension unless KYC is updated.
2. Download App: The caller instructs the customer to download an app for online validation.
3. Grant Permissions: Victims are asked to share codes and grant permissions, giving fraudsters access to their digital devices.
4. Small Transfer: The caller requests a small bank transfer to access the OTP sent to the device.
5. Unauthorized Access: With the OTP and other details, fraudsters carry out transactions and drain the victim's bank account.

Modus Operandi - In Case of Fake Messages:

1. Phishing Link: Victims receive a message with a phishing link or a 10-digit mobile number for KYC update.
2. Spoofed Website: Clicking the link redirects to a fake website, prompting for bank details.
3. Personal Details: Alternatively, calling the provided number leads to sharing confidential information.
4. Fraudulent Transactions: Fraudsters use these details to access and steal from the victim’s bank account.

Warning Signs

Be cautious of the following signs that indicate potential fraud:

• Requests for confidential information such as account number, PIN, or password.
• Instructions to download applications on personal devices.
• Messages creating a sense of urgency to act immediately.
• Messages with poor grammar, punctuation, and unnecessary capitalization.
• Messages sent from mobile numbers rather than authorized banking customer service.
• Messages appearing from unknown numbers instead of registered bank names.

Safety Tips to Protect Yourself Against KYC Frauds:

1. Avoid Unknown Links: Never click on links from unverified sources.
2. Recognize Authentic Communication: Banks and wallet companies do not perform KYC over calls or send links for updates.
3. Verify Customer Care Numbers: Authentic customer care numbers are not 10-digit mobile numbers.
4. Protect Confidential Information: Do not share your mobile number, account details, passwords, OTPs, or PINs with anyone.
5. Use Official Contacts: Contact customer service through numbers provided on official banking websites, not via Google search.
6. Ignore Fraudulent Claims: Your account will not be blocked for KYC issues unless fraudulent activity is detected.
7. Avoid Remote Access: Do not install remote access applications like AnyDesk, Quicksupport, or TeamViewer.
8. Use Authorized Apps: Download apps only from official app stores or websites.
9. Report Issues Immediately: Report any suspicious activity to your bank immediately.
10. File Complaints Online: Report frauds on the government portal www.cybercrime.gov.in.

Legal Perspective

In India, online trolling may attract sections 67 and 67A of the IT Amendment Act, 2008. Here are some relevant laws:

• Defamation (Section 499 IPC): Posting obscene images/videos can lead to up to 2 years in jail for defaming a woman.
• Sexually Explicit Content (IT Act): Publishing/transmitting explicit content can result in 5-7 years in jail and a ₹10 lakh fine.
• Criminal Intimidation (Sections 503 and 507 IPC): Threatening to harm someone's reputation or doing so anonymously can lead to conviction.