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How to Avoid Common Financial Scams

April 21, 2023

Table of Contents

    Table of Contents

      Prevention is always better than cure! Check out this article to avoid the most common financial scams. ‍

      Financial scams are pretty common these days. With the advancement in methods of financial transactions, scammers are becoming creative, too.

      For instance, with a simple OTP, they can empty your entire bank balance. From phone calls to big and fancy ponzi schemes, financial scammers are everywhere.

      In the last 3 years itself, around 42% Indian investors have faced the consequences of financial scams. What’s more surprising is that almost 70% of these victims failed to get their money back. 

      Therefore, it is important to be aware of how to avoid financial fraud in order to protect your finances against these scams.

      Especially when everyone is focusing on not just earning money but also growing it through investments, the exposure to different types of financial scams have risen many folds.

      But, there is a solution for everything-You just need to know the ways of avoiding financial scams. 

      How? Check out the points below! 

      Tips to prevent common financial scams 

      Regularly review all your accounts 

      To prevent financial scams, it is important to be aware of your finances first.

      Make a habit of regularly taking an update of your bank accounts, credit card statements, etc. to ensure no unauthorised charges.

      To simplify the process, download the relevant app of your bank and stay updated about all the credit and debit amounts.

      Every bank now has its own verified app, which will assist you in almost anything related to your account.

      You can even turn on or off your online banking, UPI payments, e-commerce accessibility, etc.

      This is the easiest way to catch any fraudulent transaction, so get started right away!

      Maintain strong passwords/pins and change them regularly 

      Whenever you set a password, there are always some suggestions given to make it strong and make use of them.

      For sensitive accounts, change the passwords regularly.

      Avoid using your birthdate, year, name of pet, etc. while setting a password.

      Also, never ever use the same password for multiple accounts - you will just make things easier for hackers and scammers.

      Have one unique password for each account and make efficient use of numbers, symbols, alphabets, etc.

      If you have a problem remembering passwords, well, the only good option is to write them down somewhere - at a very safe place.

      Avoid putting them in your phone’s notes or your wallet as these are very obvious places.

      Use only certified & verified online financial platforms 

      Nowadays, from saving to investing, everything can be done online. This increases the chances of investment fraud.

      Regular payments through UPI have especially become very popular. However, it is important for you to make sure that the app or platform that you are using is safe and verified.

      Use only secure platforms for transactions. Remember that you do not need to share OTP to receive any payment.

      If someone is asking you anything like that, beware - it might be a scam.

      Also, you must have frequently heard warnings from banks and government authorities regarding sensitive information disclosures.

      Government authorities of banks won’t ever initiate contact with you through any social media or simple text just to ask for personal information - keep this in mind.

      Phishing is a pretty common method of scamming these days, and a lot of it happens through emails.

      So, if you get an email- namely from your bank- asking you to share information or a link to ‘update your details’, do not trust them.

      When you’ll check the email ID, you’ll find weird names attached to it- making it very easy to catch fraud only if you are attentive enough.

      Beware of unrealistic Investment opportunities an financial offers‍

      If you are an investor, it is no wonder that you would have come across a very high-end deal at least once, which usually ends up being nothing but fraud.

      Keep reminding yourself that as an investor, if a deal seems too-good-to-be-true, then it probably is an investment fraud. It is important to work on becoming financially literate to make informed investment decisions

      Do not touch weird links or share any of your personal information before researching the intermediary first. Also, if you invest through some expert, run a proper background check first.

      Keep track of your credit card reports to avoid being scammed online

      If you can not review your credit card details monthly, try to do them at least quarterly.

      Download your credit report and make sure that every information is up to date and all your accounts are accurate - no unauthorised transactions.

      Also, when you are getting your report downloaded online, remember that you don't need to pay any fee for that. 

      Where to report financial scams

      If you come across a financial scam or suspect fraudulent activity, you can report it to the following authorities:

      Reserve Bank of India (RBI)

      If the scam involves a bank or financial institution regulated by the RBI, you can report it to the RBI's Consumer Education and Protection Cell (CEPC) by filling out their online complaint form available on the RBI's website.

      Securities and Exchange Board of India (SEBI)

      For scams related to securities and investments, such as fraudulent schemes, unregistered investment advisors, or unauthorized stockbrokers, you can report the matter to SEBI.

      They have an online complaint form on their website for reporting such incidents.

      National Consumer Helpline (NCH)

      The NCH is a project of the Ministry of Consumer Affairs, Government of India.

      You can lodge a complaint related to financial scams by calling their toll-free helpline number 1800-11-4000 or 14404. They also have an online complaint registration system on their website.

      Cyber Crime Reporting Portal

      If the scam is related to online fraud, such as phishing, identity theft, or online scams, you can report it on the Ministry of Home Affairs' Cyber Crime Reporting Portal (

      They have a dedicated portal to report cybercrimes, and you can provide details of the incident there.

      Local Police Station

      It is advisable to file a complaint with your local police station as well.

      Provide them with all the relevant details and any evidence you may have regarding the financial scam. They can initiate an investigation and take appropriate action.

      When reporting a financial scam, ensure that you provide as much information as possible, including the names, contact details, and any supporting documentation related to the scam. This will help the authorities in their investigation.

      Remember to keep copies of all the complaints you file and any correspondence with the authorities for future reference.


      Financial scams have become frequent these days. But with proper precautions, you can avoid them.

      Along with following the above-mentioned tips, you must always stay cautious about any sensitive information relating to your accounts, etc.

      For instance, say you are disposing of some old papers, bank statements, passbooks, etc., that might contain information like your account number and personal identification numbers, then you must shred the pages properly.

      With just these simple hacks, you can secure your finances from big frauds