KYC
People always make some mistakes while updating KYC (Know Your Customer), due to which they have to repent later. Right now, many types of cybercrimes are going on in our country. We have to aware about the cybercrime. Recently, a case has come to light in which money was asked from the person in the name of KYC (Know Your Customer) and that person became a victim of cybercrime.
In Lucknow, the capital of Uttar Pradesh, cyber fraudsters have scammed people of lakhs of rupees in two separate incidents under the guise of KYC (Know Your Customer) updates.
In the first case, the fraudsters called a woman pretending to be a bank employee. They then took her OTP under the pretext of KYC verification and withdrew ₹81,793 from her credit card.
In the second case, a cyber-criminal made a video call to a young man on WhatsApp from an unknown number. He sent him a link to an APK file claiming it was for KYC updates. As soon as the man clicked on the link, his mobile phone was hacked. Shortly after, ₹36,000 was withdrawn from his Axis Bank credit card in seven transactions, and ₹19,448 was deducted from his HDFC Bank credit card in two transactions. The cyber police are currently investigating both cases.
Fraudulent activities under the name of KYC updates are on the rise, and the Reserve Bank of India (RBI) has repeatedly warned people about such scams. By following a few basic tips, you can protect yourself from falling victim to these scams.
In this article I will explain you what KYC fraud is, and how we can:
Protect yourself from KYC fraud
Follow the correct procedure for KYC updates.
What is KYC (Know Your Customer)?
KYC (Know Your Customer) is used by banks and non-banking financial institutions to verify the identity and address of their customers. For this, customers need to verify their Aadhaar number and PAN number.
What is Cyber Fraud?
Cyber fraudsters often exploit KYC updates or verification as a scam. They impersonate representatives of banks or financial institutions, contacting customers via calls, messages, or emails. They claim that there is an issue with your bank account or financial service, and immediate KYC update is necessary. Failure to do so may result in temporary suspension of your account.
Often, such messages or emails contain a link that redirects to a phishing website. Clicking on this link allows scammers to steal your financial details and empty your bank account.
How to Identify KYC Fraud?
If you receive a call from an unknown number asking for your bank details under the guise of KYC, it is likely a scam. Keep the following points in mind:
- Banks, UPI apps like PhonePe, Google Pay, Paytm, or other financial institutions will never call you for KYC verification.
No bank or UPI app will ever ask for your OTP for KYC verification.
If someone calls claiming that your account will be blocked unless you complete KYC, it is a fraud. Immediately disconnect and block such calls.
Report such incidents to cyber police immediately.
Never share your card number, CVV number, or PIN for KYC verification.
How to Avoid KYC Scams?
KYC (Know Your Customer) is an essential process that helps prevent money laundering and financial fraud. Through KYC verification, banks can ensure that their customers’ money is not being used for illegal activities.
However, if you make any mistakes during this process, you could become a victim of fraud. Therefore, when completing KYC for your bank, digital wallet, or any other financial service, keep the following tips in mind.
- Do not update your KYC through unknown calls or messages.
Do not upload any documents on WhatsApp or unknown link.
Beware of phishing emails or calls.
Do not share OTP, bank password or PIN with anyone.
For “KYC” use the bank official website or app only.
If you are a victim of any fraud, call the cyber helpline number 1930.
Why Should Customers Keep Their KYC Updated?
There are several benefits to updating your KYC. Here’s why it’s important:
Uninterrupted Banking Services:
If your KYC is updated, there will be no disruption in banking services. If it’s not updated, your bank account could be blocked, and services like ATM transactions, UPI apps, and other banking services might stop working.
Investment in Mutual Funds, Stocks, or Gold Bonds:
Without an updated KYC, you will not be able to invest in mutual funds, stocks, or gold bonds. An updated KYC ensures that you can invest in any mutual fund or investment opportunity smoothly.
Digital Payment Apps:
For using digital payment apps like Google Pay, PhonePe, or Paytm, an updated KYC is necessary. Without it, you may face issues while making transactions using these UPI apps.
Loan and Credit Card Approval:
If your KYC is not updated, banks and financial institutions may refuse to give you a loan or credit card. An updated KYC also helps in maintaining a good credit score, which makes loan approvals easier.
Insurance Claims:
If you have taken out insurance, keeping your KYC updated is important. Failing to do so could lead to delays in the claim process.
How to Update KYC?
According to the Reserve Bank of India guidelines, it is necessary for all account holders to regularly update their KYC. You can do this either online or offline, as explained below:
Offline KYC Update Process
- Visit the nearest branch of your bank or financial institution.
Get the KYC form and fill in the details of your Aadhaar card, PAN card, etc.
The bank will verify your information.
Once verified, your KYC will be updated. You will receive a confirmation via SMS or email.
Online KYC Update Process
- Log in to your bank or financial institution’s official website or app.
Click on the ‘KYC Update’ section.
Upload the necessary documents like Aadhaar, PAN, etc.
Verify the OTP sent to your mobile number.
Once the KYC is updated, you will receive confirmation via SMS or email.