Financial frauds are planned actions of deception taken to gain financial benefits at the expense of innocent people. These frauds not only cause financial issues but also emotional and mental torment due to the wicked acts of the perpetrators.
In this article, we will cover the major types of financial fraud, a case study from the city of Hyderabad, how professional investigators can help, and how one can safeguard themselves.
Types of Financial Frauds:
1. IDENTITY THEFT:
As the name suggests, identity theft involves stealing a person’s identity information, such as social security numbers, credit card details, Aadhar information, PAN card details, etc. Once the fraudsters gather the victim’s information, they can apply for loans, open bank accounts, or make unauthorized purchases in the victim’s name.
2. CREDIT CARD FRAUD:
In this type of fraud, unauthorized usage of credit card details occurs, wherein the scammer either withdraws money from the card or makes purchases using the same. These scammers obtain card information through phishing emails, installing malware on devices, exploiting Wi-Fi or Bluetooth vulnerabilities, bugging ATMs, point-of-sale machines, or large-scale data breaches.
3. PONZI AND PYRAMID SCHEMES:
Ponzi schemes promise “too good to be true” claims of high returns with minimal risk of loss, but they actually work by consuming new investors’ money to pay previous ones. On the other hand, pyramid schemes recruit participants who pay a fee, which is distributed to previous members. These schemes stop working when recruitment ceases.
Case Study of Hyderabad Financial Fraud:
In Hyderabad, a significant case of financial fraud emerged in 2023 involving a Ponzi scheme. A company promised guaranteed monthly returns of 15-20% to investors. Over 5,000 people invested their savings, tempted by the promise of quick profits. However, when pay-outs stopped, investors realized they had been conned. Private detective agencies in Hyderabad revealed that the company had no real business model and was solely dependent on new investments to fund earlier dues. Victims included individuals from all walks of life, including professionals and retirees. Many lost their life savings and faced severe financial distress.
How Private Detectives Can Help in Financial Fraud:
1. GATHERING EVIDENCE:
Private investigators can track and trace suspicious banking activity, spot fake identities, and find hard facts for the court.
2. BACKGROUND CHECKS:
Investments are a significant step to take. Investigators can conduct thorough checks on the parties involved and confirm the legitimacy of the company and the individuals associated with it.
3. SURVEILLANCE AND DIGITAL FORENSICS:
With up-to-date tools and software, investigators can recover data, monitor the scammers, and check the digital trails left by the fraudsters.
4. ASSISTING LAW ENFORCEMENT:
With fair and accurate factual evidence and research, investigators can greatly help authorities, enabling them to punish the culprits. In the Hyderabad case, private investigators worked with the authorities and helped them achieve justice.
Tips to Protect Oneself from Frauds by Mr. Rahul Rai Gupta, Our expert in the panel Founder of Detective Guru:
1. PERSONAL INFORMATION:
One should safeguard sensitive information like Aadhar Card numbers, bank details, and credit card numbers. It is essential to have strong and unique passwords online.
2. WOKE AND WISE INVESTMENTS:
One should not believe in “too good to be true” high-yielding investment plans. Thorough research should be conducted on any company or scheme before investing.
3. KEEPING A CHECK ON YOUR BANKING:
Make a habit of regularly checking your online banking statements and keeping an eye on suspicious transactions.
4. BEING VIGILANT ONLINE:
One should be cautious about phishing emails that ask for personal or financial information. Use strong firewalls and secure websites for online browsing. Refrain from using public Wi-Fi for sensitive activities, as it can expose personal information.
5. LISTEN TO EXPERT ADVICE:
One should heed the advice given by experts, such as financial or legal advisors while undertaking investments. Engaging private investigators can provide clarity on the background of a company.
By following these guidelines, individuals can better protect themselves from the risks associated with financial fraud.
