Online Fraud – Types of Online Scams and Ways to Prevent Them

Can you guess which age group is most susceptible to online scams? It is young adults in the age group 18 to 24 years. Isn’t it surprising? Though these digital natives know a lot about how technology works and can help you set up your latest Facebook or Instagram account in a matter of seconds, they can also fall prey to online scams. Older adults are more vulnerable to other scams like fake phone calls as compared to online scams.

This article explains what is an online scam, what are the types of online scams, and how to stay away and avoid falling prey to such scams. It further highlights the features of the cyber insurance policy provided by Bajaj General Insurance.

What is an Online Scam?

Did you know this shocking fact that India ranks tenth in the global cybercrime index? There has been an increase in online scams in India due to rapid digital transformation. Also, the expanding e-commerce sector and the vast online population have made it an attractive target for cybercriminals. So, what exactly is an online scam?

An online scam is a digital trap set to cheat people. It is a fraudulent scheme to deceive internet users to steal their money, personal details, or any other valuable information.

What Are the Types of Online Scam?

1. Phishing Scams

The word ‘phishing’ is derived from two words: fishing and phreaking. Phreaking was a hacking activity used in the 1970s where telephone systems were exploited illegally.

Phishing scams occur when scammers use fake messages or links as ‘bait’ to trick people into disclosing their personal details. You might get an email, SMS, or WhatsApp message saying: Your account has been blocked or you have won a lottery, log in to claim it. On clicking the link, you are redirected to a fake website that looks real. Once you enter your password and other details, scammers have access to your account.

2. Vishing (Voice Phishing)

In vishing, instead of emails or links, scammers use phone calls to trick you.

You may get a call from someone pretending to be a bank official or government official. They may sound serious and say: Your bank account has been blocked or you need to pay a fine to the income tax department. The idea is to scare you or create a sense of urgency so that you reveal sensitive information like ATM Pin, CVV, or OTP over the phone.

3. Smishing (SMS Phishing)

Smishing is similar to phishing, but the message is sent through SMS or WhatsApp messages. The message is a text with links. When you click these links and type your card number, password, or OTP, the scammer steals it.

4. UPI and Payment App Frauds

These scams happen on apps like Google Pay, PhonePe, or Paytm. In this type of fraud, scammers trick you into authorising fraudulent transactions. You may receive a request on UPI saying you will receive money for selling your old phone and a fake QR code is shared. You think scanning will get you money, but instead the amount is deducted from your account.

5. Online Shopping Scams

Imagine getting an iPhone 16 Pro at half the price or getting branded shoes at an 80% discount! These deals that are questionable are traps set by scammers. They create fake shopping websites and offer super cheap deals. You pay the money online but the product is never delivered or a cheap, fake product is sent.

6. Social Media Scams

These scams include romance scams, charity scams, lottery scams, etc. In romance scams, scammers may create fake online relationships to build trust and then ask for money. In charity scams, fraudsters pretend to collect money for a good cause and create fake websites and profiles. When you donate money, the money never reaches the needy, instead it goes to the fraudster. In lottery scams, you suddenly get mail or message saying you have won lakhs of rupees and need to pay a small processing fee to claim the lottery amount. Once you pay the amount, which can be in thousands, they vanish as there was never any lottery in the first place.

7. Identity Thefts

Identity thefts occur when scammers steal your personal information like Aadhaar number, PAN card and bank details, or even photos and then pretend to be you to commit fraud.

Imagine someone hacks your email and gets your Aadhaar and PAN copies. Next thing you know, there’s a loan taken under your name that you never applied for.

Identity theft is committed to take loans in your name, shop online leaving you with a bill, or commit crimes while pretending to be you.

8. Malware Attacks

Imagine you download a free ‘premium movie app’ from a random site. It works for a day, then suddenly your phone starts hanging and a popup says: ‘Your data is locked. Pay ₹5,000 to unlock.’ That is ransomware. Malware software is malicious software that can attack your computer system or mobile phone. It enters your device when you click suspicious links or open emails from unknown sources.

Malware includes viruses and worms, spyware that secretly tracks your activities and passwords, and ransomware that locks your device and demands money to unlock it.

How to Prevent Falling Prey to Online Scams?

Follow these simple steps so that you can protect yourself from online scams:

• Keep personal information away from public accounts: Do not share each and every detail of your personal life on social media. Whenever you receive a call, email, or message asking for personal information, be cautious.
• Use Strong Security Measures: The passwords you create for your accounts should be unique and complex which are difficult to guess. Turn on multi-factor authentication (MFA) wherever you can. Also, don’t forget to keep your devices, apps, and operating systems updated regularly so hackers don’t find an easy way in.
• Be mindful: You may receive great and tempting but unrealistic offers. Be vigilant at such times. And do not panic when someone says your bank account has been hacked. Remain calm and connect with your bank straight away.
• Secure Your Accounts and Devices: If you connect to secure Wi-Fi networks and use strong passwords, then hackers will find it difficult to gain access. If you find any unusual activity related to your bank account like money has been deducted suddenly or you notice transactions that you had not initiated, then check for it immediately.
• Take Precautions: Before revealing any personal information on the phone, call the bank’s customer care first.
• Report Scams: If you ever fall target to online scams, do not panic. Inform your bank first, and file a complaint with the relevant authorities.

In spite of taking all the necessary precautions, you may still be exposed to cyber threats. And that is why we all need a cyber insurance policy in this digital age. Bajaj General’s Individual Cyber Safe Insurance provides coverage for:

• Identity theft and social media account hacks
• IT theft losses due to unauthorised online transactions
• Cyber extortion, phishing, and email spoofing losses
• Data restoration costs after malware attacks
• Legal expenses for prosecuting offenders

Conclusion

Online scams can harm you in many ways. In addition to losing money, your personal information may be stolen and your devices may be damaged. So basically, online scams do not just steal your money, they can also put your data, devices, and peace of mind at risk. To keep yourself protected from online plans, consider purchasing a cyber insurance policy.

Bajaj General’s Cyber Insurance Plans start at an affordable price. This cyber insurance will help you bounce back both financially and legally if you ever fall victim to online fraud.

FAQs

1. What is online fraud in cybersecurity?

Fraud committed using the internet is known as ‘online fraud’, and it can involve both financial fraud and identity theft.

2. Can cyber insurance cover losses from UPI fraud?

Yes, policies like Bajaj General Individual Cyber Safe Insurance can help cover financial losses from unauthorised online transactions, subject to the policy terms.

3. What should I do if I fall victim to online fraud?

If you ever fall victim to online fraud, you need to act swiftly. Report to your bank immediately, change your passwords, and file a complaint with the National Cyber Crime Reporting Portal.

4. Is cyber insurance only for businesses?

No, individuals can get cyber insurance too to protect against personal online threats like phishing, identity theft, or cyberbullying.

5. How can I keep my kids safe from online scams?

Teach kids about safe browsing, monitor their online activity, and utilise parental control tools to block unsafe websites.

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***Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.