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3 Tips to Prevent KYC Fraud

  • Highlights

  • With digital banking processes on the rise, KYC frauds have multiplied in India – so much so that RBI had to recently release cautionary statements for all customers

  • KYC frauds rely on social engineering and phishing practices wherein fraudsters pretending as bank officials will persuade customers to update your KYC through SMSes, calls, emails, or social media

We are all familiar with the KYC (Know Your Customer) process where customers provide relevant personal information for identity verification by banks and financial service providers. Thanks to the growing trend of digital banking and transactions, the KYC process has also found convenience and agility through digital means. However, amidst this positivity, a cause for concern has emerged, which is KYC frauds.

Just recently, if you’ve heard the news, hackers of Chinese origin duped customers of a prominent Indian bank by asking them to update their KYC process. In fact, amidst the pandemic, instances of KYC frauds in banks have seen a major rise. Even the Reserve Bank of India had to release a cautionary notice warning people against KYC update frauds and asking them to not share personal information with unidentified people.
So, what exactly is a KYC fraud and how can you prevent KYC fraud? Let’s learn about it below:

Types of KYC fraud
With India rapidly shifting towards a digital economy, more and more people are growing familiar with digital ways to make payments, open accounts, apply for a loan or invest online. This is, unfortunately, being leveraged by fraudsters and scam artists who have now begun employing highly deceptive methods, such as social engineering, to target innocent customers or those who are still not completely comfortable with digital ways of conducting activities.

Fake KYC Update: In the façade of a bank official or customer support officer, a fraudster calls an unsuspecting customer and urges him/her to share personal account details to update their KYC database. They can also either lure people with the promise of gifts or discounts or threaten people that their account will be closed if they don’t share details such as account login credentials, passwords, OTPs, card information, etc. This can also occur through emails or SMSes, wherein a fishy link is shared, urging customers to visit it and input personal info to update KYC.

  1. Vishing: Following the previous modus operandi, the fraudster will call the customer and ask him to install a malicious app from which he can defraud the customer. This is called vishing.

  2. Smishing: KYC frauds in banks can also occur in a reverse manner wherein, first, the customer gets a suspicious link through an SMS to update KYC details, and then is asked to call a number. This is termed as smishing.

  3. Remote Access: Another rising scam is the one wherein the fraudsters gain remote access to a person’s desktop or smartphone through an app installed in the guise of a KYC update. Later on, fraudsters can ask the customer to verify on the device, thereby leading to a leak of bank details.

3 Tips to Prevent KYC Fraud


The most important thing we need to do to prevent KYC fraud is alertness. Here’s how you can prevent KYC scams:

  1. Think before clicking on a link: Any threatening, too-good-to-be-true, or suspicious SMS, email, or social media message that asks you to click on a link to update your KYC should be treated with caution. Don’t click on it unless you are absolutely sure of the sender’s identity.

  2. Never share personal info with unverified sources: Remember, you are not supposed to share personal information such as bank account details, login verification, passwords, card information, etc., over a call or elsewhere with anyone – not even your bank!

  3. Don’t pay heed to unsolicited KYC update demands: A bank will never share a link with you to update your KYC in an unsolicited manner. Banks and financial institutions also don’t ask you to install any third-party apps for the same. 

Lastly, always report such instances at the cybercrime.gov.in portal, and also to the bank authorities.

What to do in case of a KYC fraud?


Many prominent banks and financial institutions have been targeted with KYC frauds in their name, and the same is the case with Bajaj. Remember, Bajaj will never ask you to update KYC either through an SMS link or through its representatives. In case you have fallen for a KYC scam in Bajaj’s name, immediately report it to the cybercrime authorities as well as at https://www.bajajfinserv.in/reach-us.

Savdhaan Rahein. Safe Rahein.

Read more at:
• Cautionary Note - https://www.bajajfinserv.in/cautionary-notice-new.pdf
• Infosec Page - https://www.bajajfinserv.in/infosec-pages
• Fraud Awareness Blog - https://www.bajajfinserv.in/insights/fraud-awareness

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