Here are some tips to help you avoid OTP fraud

One of the biggest threats to the fintech industry is OTP fraud. The term itself might be new, but the problems it causes have been around for quite some time.

Online transactions are a huge boon for the financial services industry. There’s a growing number of fintech startups that are thriving because of this growing trend. But there is one type of fraud that these companies face more than ever—OTP fraud.

In this article, you will learn about OTP fraud, how it happens, and how to avoid falling victim to it. Read on to learn more.

What is OTP fraud, and how does it happen?

The first step in avoiding OTP fraud is knowing what it is. OTP fraud occurs when a person uses an OTP or a one-time password for an OTP-enabled application to get access to another individual’s bank account.

OTP fraud can happen in many forms, such as text message phishing, fake emails, and phone call spoofing, in which the person fakes a trusted party to get access to their account. OTP fraudsters may use an existing relationship or personal connection with their targets, such as a family member or friend.

To be successful, the imposter must convince the victim to click on a link or type in their username and password. Once logged in, they can see useful details in the victim’s bank account, including credit card numbers and other personal information. When they get into the account, they can access online devices that are connected to it and use them to cheat, relying on the device that was compromised.

The most common way OTP fraud occurs is through text OTP or an email phishing scam. Let’s see what they mean in depth:

The Text OTP Scam

These scams involve sending a link by text message that directs the victim to a website. The website might look legitimate but contains fraudulent content. Once installed on the victim’s device, this malware allows hackers to access account information from any web browser on the device.

Email phishing scams

In these scams, hackers send emails that appear legitimate but contain malicious links that direct users to fake websites. Once there, users enter their usernames and passwords into forms that grant the hacker access to their accounts. There are also telephone scams in which attackers call victims, pretending to be someone trustworthy.

How to prevent OTP fraud?

OTP scams come in different forms but always come from the same cause: a lack of knowledge of the technology used for one-time password creation. Here are some tips that will help you stay safe from OTP scams and other similar threats:

Do not reveal your OTP to anyone.

Any financial institution or authority will never ask you to share your OTP over the phone. The OTP is a confidential number, which means that even the employees of the bank or any monetary establishment or their client support people will never ask you to pass it along. It is always advisable to keep the OTP to yourself. When installing a screen-sharing programme or apps such as AnyDesk or TeamViewer, be very alert when clicking on links in emails or text messages.

Always use your bank’s official net banking portal.

Don’t fall for this OTP fraud by visiting the wrong bank’s website through a phoney address bar. It is important to check the web address of the page you are visiting against the official bank portal. Also, to make sure the site is safe and real, you can click on the URL address bar to see if it has a valid certificate of authenticity.

Avoid downloading apps from suspicious sources.

Do not download any third-party app, no matter what the caller says. Do not download it even if the caller says you need a KYC update or a grievance redressal app.

Avoid clicking suspicious links.

Avoid clicking on any suspicious link emailed to you or sent via SMS. Clicking on these links may grant your phone access to your financial information or give you the OTP. Apps can corrupt and compromise your phone and the OTP without you knowing. Some apps may even phish for your personal information by initiating fake transactions.

Double-verify your transaction amount.

When you make a payment through an online payment portal like PayPal or VISA Checkout, while entering OTP, make sure to re-verify the amount that you are paying and the name of the vendor accepting the payment. If the amount on the screen is different or the source looks suspicious, cancel the transaction immediately.

Conclusion

With the increased presence of mobile devices and the heightened number of risks surrounding mobile devices, OTP fraud is on the rise. There are ways to stay safe from this potential threat, but individuals need to know how OTP fraud can occur and how the industry is trying to combat it.

Hackers can compromise any OTP-enabled service and use it in fraud attempts. That’s why you must take the right precautions to protect your mobile device and other accounts.

OTP fraud and experiencing account breaches are not new concepts. But the scope of OTP phishing has started to expand. This is because it is now possible for fraudsters to steal someone’s identity and use it to access another person’s bank account.

To avoid becoming a victim of OTP fraud, it is crucial to take a few precautions. Avoid sharing your OTP over the phone; do not share it with anyone who swears that it will help you get a better job, and double-check the amount of money you are accepting and to whom you are giving it. With these precautions, you can avoid falling victim to an OTP fraud scam.

If you need further consultation on online payments, you can contact Piramal Finance. This online platform is what you need to learn everything about relevant developments in the world of finance.