Online Trading India

Mutual Funds

Share Market
Credit Card

The Rising KYC scam – How to stay out of it?

KYC Scam: From the past few months, a new scam has begun to spread across the country. Scamsters posing as bank officials have duped people by gaining remote access to their mobile phone screens through an app.

They call up the victim and tell him his KYC needs to be validated, offer to help him complete the procedure online and then hack into his bank account.

Few Open Cases

In the past event, in July, Sandeep Choubey of Indore got a call from a man who identified himself as a customer care executive from an online food- ordering company. He lost Rs 2.28 lakh to the fraud. That is a really heavy amount.

Last month, Mumbai-based Dhananjay Joshi lost Rs 1.6 lakh after a fraudster got him to download an app to complete his KYC details. Police are looking into the case. The app scams people in the loop to

KYC scam

Also Read: SBI Customer? Do this before November 30 or you may lose SBI Internet Banking access.

How does the scam play around:

  1. You get a call that your wallet or bank KYC is invalid.
  2. The caller says it can be validated online so that your account is active again.
  3. You are asked to download an app to facilitate step-by-step guidance.
  4. When you use the application, a caller can see your phone screen.
  5. He asks you to transfer a small token amount to your wallet.
  6. When you do so, he can see your password and other details.
  7. He uses them to simultaneously transfer larger amounts from your bank.


While the extent of damage is not known, the company had in a statement said the problem was ‘widespread’. Several complaints were registered with Paytm and RBI over the past three months citing the same modus operandi.

“We encourage our users to report all such incidents to us and to crime branch as well so that we can take concrete action against these fraudsters,” Satish Kumar Gupta, MD, Paytm Payments Bank, told ET in an emailed statement.

“Our cyber cell department is in constant touch with police crime branches and we are also informing our customers via blog posts, app notifications, social media, etc. to safeguard themselves from such incidents.”

Users of digital payments platforms will have to be extra vigilant as hundreds of Paytm customers have complained of fraud by ‘Paytm employees’, reports suggest. As the issue gained traction, Paytm Founder Vijay Shekhar Sharma took to Twitter to caution and assured users.

Also Read: Paytm Is Seeking For RBI License. This Could be the Reason


He (@vijayshekhar) tweeted on November 19 cautioning users about fraudsters’ attempts on their accounts.

Modus operandi

The fraudsters target customers by asking them to download a mobile or desktop app to facilitate the Know-Your-Customer (KYC) process, through which they gain access to the victim’s PIN.

They then proceed to empty out the linked bank account in multiple successive transactions, the Economic Times reports. Applications used in the scam include AnyDesk, QuickSupport and TeamViewer, the report added.

The extent of the problem

According to the company’s statement, the problem was ‘widespread’ and the extent of the damage still remains is not known.

  • Modus Operandi became the same problem with Paytm and the Reserve Bank of India (RBI) over the past three months when several complaints were registered.
  • In fact, Finance Minister Nirmala Sitharaman told Rajya Sabha that the central bank had registered 2,000 such complaints since July.

KYC scam

  • Only 723 (36 per cent) of these were resolved, with the rest yet pending, she added. How many of the cases were specific to Paytm was unclear.
  • The article quotes Satish Kumar Gupta, MD, Paytm Payments Bank, as saying that the company is in ‘constant touch’ with the police and encouraged customers to report such incidents so that ‘concrete action’ could be taken.
  • He added that customers would be informed via their blog, app and social media.

Read More: Demonetization: Success or Failure?

Similar instances in the past

Earlier this year, HDFC Bank, Axis Bank and RBI has issued advisories against downloading remote applications such as AnyDesk, QuickSupport and TeamViewer for transactions or processes, especially when interacting over the phone.

While the applications/tools themselves are not malware, they provide remote access to devices, which allows fraudsters to misuse them if the victims have not secured their home or office computers.

Steps to ensure you do not fall prey

Digital frauds have been quite rampant as more people migrate to digital payment platforms: UPI or BHIM.

  • Customers have to be extra vigilant to ensure they are not playing into the scam. The app appears to seem like legitimate transactions.
  • For example, researching on the bank and its payment platforms will help you find out the fake app. Please check this before downloading an app.
  • Second, beware of apps requiring you to fill in the bank, Aadhaar and mobile details, especially BHIM, which does not require these details.
  • Third, be extremely wary of SMS of WhatsApp prompts for KYC, Aadhaar details, PIN or OTP details.

KYC scam

Do take the following measures to keep away from KYC scam once and for all

  1. The fraudsters pose themselves as a representative from your bank and ask you to validate your e-wallet or bank KYC.
  2. The caller makes the victim believe that the process can be carried out online.
  3. After this, the victim is asked to download a specific app that gives access to the fraudster to see all the activities happening on the device.
  4. The victim is asked to follow a step-by-step guide.
  5. After gaining access, the victim is asked to transfer a small amount to your e-wallet.
  6. Simultaneously, the fraudster will transfer a large amount from the victim’s bank.
  7. While processing the transfer, the victim receives an OTP for the transfer request, which the fraudster sees through the app.
  8. This way, fraudster transfers money from the victim’s bank account.

As per data shared at Rajya Sabha by Finance Minister Nirmala Sitharaman on Tuesday, RBI has received 1,997 complaints against payments banks in the Banking Ombudsman and Reserve Bank of India’s Consumer Education and Protection Cells between July and November of 2019. 36 per cent or 723 of the cases have been resolved with the rest 1,274 still “under process.” However, how many of these cases pertained specifically to frauds happening at Paytm, is speculative.


(Visited 1,001 times, 1 visits today)