KYC-update frauds get RBI attention: Know how scams happen, how to protect yourself

KYC-update frauds get RBI attention: Know how scams happen, how to protect yourself



The Reserve Bank of India (RBI) has cautioned about KYC updation frauds that are doing rounds these days. In a press release dated February 2, 2024, the RBI said that the public must be careful and exercise caution to prevent the loss of their money and safeguard them from malicious practices.

“In the wake of continuing incidents/ reports of customers falling prey to frauds being perpetrated in the name of KYC updation, RBI once again urges the members of the public to exercise caution and due care,” said the RBI in the press release.

What are KYC updation frauds? How do these KYC frauds happen?

In the press release, RBI has said that the modus operandi of such type of frauds usually involves individuals receiving unsolicited communications, including phone calls/SMS/emails, through which they are manipulated into revealing personal information, account/login details, or installing unauthorized or unverified apps through links provided in the messages.

“Such communications often employ tactics of creating a false urgency and threatening of account freezing/blocking/closure, if the customer fails to comply. When customers share essential personal or login details, fraudsters gain unauthorized access to their accounts and engage in fraudulent activities,” said the RBI in the press release.

How to save yourself from KYC-updation frauds: RBI shares tips

The RBI in the press release said that as soon as individuals notice that they have been victims of financial cyber fraud, they should immediately lodge a complaint on the National Cyber Crime Reporting Portal (www.cybercrime.gov.in) or through the cybercrime helpline (1930). Here’s what else individuals who are victims of financial cyber frauds can do:a) In the event of receiving any request for KYC updation, directly contact their bank/ financial institution for confirmation/ assistance.
b) Obtain the contact number/ customer care phone number of the bank/ financial institution only through its official website/ sources.
c) Inform their bank/ financial institution immediately in case of any cyber fraud incident.
d) Enquire with their bank branch to ascertain available modes/ options for updating KYC details.

RBI has also urged individuals to not share account login credentials, card information, PINs, passwords, and OTPs with anyone. Further, the RBI requested individuals to not share KYC documents or copies of KYC documents with unknown or unidentified individuals or organizations. It is also cautioned by the RBI that individuals should not share any sensitive data/ information through unverified/unauthorized websites or applications.

In a master circular dated February 25, 2016, the Reserve Bank of India (RBI) said about the timelines to be followed for KYC updation as per different categories of individuals as classified by banks. “Regulated entities (REs) shall adopt a risk-based approach for periodic updation of KYC ensuring that the information or data collected is kept up-to-date and relevant, particularly where there is high risk. However, periodic updation shall be carried out at least once every two years for high-risk customers, once every eight years for medium-risk customers, and once every ten years for low-risk customers from the date of opening of the account/ last KYC updation,” read the circular dated February 25, 2016, by the RBI



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Author: Shirley