How to Avoid OTP Fraud?

Posted on: May 26, 2023 | 3 mins | Written by: HDFC ERGO Team

How to Avoid OTP Fraud?

There is hardly any doubt that the Indian banking system has evolved a lot over the past few years. There have been a lot of advancements and it won’t be a stretch to say, that it is on par with a lot of other countries or even better. In a bid to make things more convenient and secure, the Indian banking system relies on OTP or one-time passwords. However, miscreants have found a way to exploit them and commit OTP fraud. Here is all that you need to know about it.

What is OTP?

OTP or one-time password is a ubiquitous mode of additional authentication. They are usually numeric and sometimes alphanumeric. These strings of numbers or alphabets authenticate a user for one particular transaction or session. Unlike a static password, which is vulnerable, an OTP offers additional security.

Some common applications of OTP include additional authentication to log in to banking or financial applications. You can even enable multi-factor authentication and receive OTP to log into applications that have critical personal information. Similarly, OTPs are also used for completing banking transactions such as NEFT or card-based transactions.

What are OTP-related frauds?

Miscreants can use different methods to get access to OTPs sent either to their email id or phone number. Once they have access to the OTP, they can use it to steal your money, access critical information, change your account information and so on. Here is some additional information that will help you better understand OTP cybercrimes.

Ways of committing OTP-related frauds:

Miscreants and cyber criminals can use any of the following methods to commit OTP-related fraud.

1. OTP Phishing

Scammers employ a lot of different techniques in coercing you to share your OTP with them. Some common techniques include asking you for OTP to assist you with income tax refunds or to assist you with the disbursement of interest-free loans.

2. Impersonify you

Scammers might contact you as representatives of financial institutions. After establishing that they are working executives with a bank, the fraudsters might ask you for personal information and record the same. Once they initiate a transaction, they will ask you for an OTP that you must share with them.

3. Using malware

Another way of committing OTP-related fraud and extracting crucial information about you is by installing malware on your smartphone. A lot of us have the habit of storing important information on our smartphones. With the help of a malicious link, you might install malware that can even share OTP with scammers.

Steps to avoid OTP related frauds

Now that you are aware of some commonly used techniques, the following OTP fraud prevention techniques can save the day for you.

1. Avoid dubious applications

The Appstore of smartphones can contain a lot of fake applications that offer free lending or other payment-related apps. The primary motive of these apps is to steal your personal information. They might require you to key in your PAN number, Aadhar number, etc. Which they can store and use for the wrong purposes. By avoiding such doubtful or unauthorised applications, you can protect yourself.

2. Lucrative deals

If you receive an email or SMS about a financial product that seems quite lucrative, it is important to cross-verify the information with the official website of the lending company. It might so happen, that you revert to the phone number provided and the fraudsters at the other end ask you for sensitive information.

3. Avoid questionable links

Since data is of paramount importance these days, third parties can buy or sell data for different purposes. The chances are high that you might receive an email or SMS that offers a loan at a better interest rate or great discounts. It is advisable to avoid clicking on such links. As you might end up installing malware on your phone.

4. Secured websites

A crucial step towards the prevention of OTP fraud is to always use secure websites. Look for HTTPS on the website link instead of HTTP. This reduces the chances of fraud and malicious intent to a large extent.

5. Cybersecurity insurance

Another prudent way to tackle such situations is to opt for cyber security insurance . Though the policy might not be able to prevent you from fraud, it can help you afterwards to deal with the possible consequences. Choosing cyber insurance for family can be a sensible decision if your parents or children use smartphones. The plan can offer you compensation in the event of cyber crimes and financial perils.

Though OTP fraud is becoming more prominent, it is merely just one of the tools that miscreants and scammers might use on you. To protect yourself and your loved ones against a growing list of cyber crimes, it is recommended to opt for cyber insurance for family .

And unlike the common notion, cyber security insurance is quite affordable as well. The policy ensures that you have the necessary protection and receive compensation should you be subject to any cybercrimes. Cyber insurance for shopaholic people is even more practical given that they are more likely to order things from various websites and forums.

Conclusion

As OTP cyber crime has increased over the past few years, it is essential to equip yourself with the tools to protect and safeguard your information and money. Using the above methods, you can protect yourself to a large extent. However, cyber insurance for shopaholic people and people who rely a lot on online transactions is highly recommended.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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