Recently State Bank of India has cautioned its customers about an a new fraud module where imposters posing as Central Bureau of Investigation (CBI) or Income tax Department officials may threaten you and exhort heavy fines in the name of some made up legal action.

“Dear SBI Customer, Fraudsters may pose as CBI or IT Dept officials and may threaten legal action or heavy fines to extort money from you. Beware of such frauds,” said the State Bank of India (SBI) to its customers.

Read below to find out how the fraud works and what precautions you should take:

How the fraud works

Vikram Babbar, Partner, EY Forensic & Integrity Services explains how the fraud works:

The first act: Initiation of the fake call

In this type of fraud, the imposter at first identifies the gullible customer and calls him/her. This usually happens over messenger apps video calling feature. The crucial piece of the fraud is the bait which convinces the customer that the concerned official has some critical information about him. This bait can be literally anything which can be used to trap the customer like KYC number, address, etc. For example: the fraudster may collect information about you which is available on the public domain and present it to you in such a way that you get convinced. Like what if a stranger told you that the property you recently sold is subject to income tax which you didn’t pay. Now he or she may get this information from property websites where you listed it or from the property broker’s website or even from a data leak in the property registrar’s office.

The second act: Initiation of the fear

Once the customer is convinced about the imposter being a real agent of CBI, income tax or other government departments, the fraudster narrates a story to the customer. He may say that you have evaded income tax or missed a crucial judicial process, etc and hence you may get arrested. Naturally when you hear the word jail, arrest, legal process a situation of panic will occur in most people. This fear and panic are what the fraudster uses to his advantage.In the panic of the situation, the fraudster further “stage manages” the scene through scrutiny of some documents, in some cases he simulates an actual police interrogation as well. The customer is then asked to share other information like Aadhaar documentation, bank account details, etc.

The final act: An escape route from the created problem

This staged acting which the fraudster so carefully played may convince some people. Once the customer is convinced that the enquiry process will take time (could be days or months) and only post complete verification, can he/she be considered innocent, the fraudsters offer a way out. The narrative that the fraudster plays is that all your legal, tax and other problems will go away if only you give him or her a bribe. The customer is asked to transfer money to different bank accounts pending inquiry and that the same would be transferred back once the investigation is complete.

“This type of scam is commonly known as “phishing” or “social engineering,” where fraudsters pose as legitimate officials to intimidate victims into providing money or personal information,” says Sheetal R Bhardwaj, executive member of Association of Certified Financial Crime Specialists – ACFCS.

Bhardwaj highlights that this type of scams including phishing and impersonation fraud have become a significant global issue and not just India specific.

“The Federal Trade Commission (FTC) in the United States reports millions of dollars lost to fraud each year. Various studies indicate that billions of dollars are lost annually worldwide due to different types of financial fraud, and the problem is escalating as technology evolves and more people conduct transactions online,” she says.

What precautions should you take for this kind of fraud

“No law enforcement personnel or any government agency contacts a consumer for conducting an investigation online and neither does any of them ask a person to solve legal issues over a video call. And most importantly no law enforcement personnel or government agency can ever ask you to transfer any amount of money to any account for solving legal issues. In these cases the common narrative is to induce the fear of legal action on the victim for a made up incident and then extort money from them,” says Shikha Goel IPS, DGP CID & Women Safety Wing, Director Telangana Cyber Security Bureau & Telangana FSL.

“If you are someone who has got this type of call then remember not to panic, calmly ask the other person on the call to meet you at the nearest police station or government office. If it’s a genuine call then the other person will agree to meet you at the police station or government office. Another tip which consumers may follow is to disconnect the call and callback the same number. The best thing to do is first disconnect the call and then callback the number again. This is because in our experience we saw these imposters use voice over internet (VoIP) or other internet based calling software which does not have an incoming call facility,” says Goel.

Bhardwaj shares some essential tips which you may follow for safeguarding yourself from this fraud:

● Verify the source: Always verify the identity of the caller or sender. Official organisations typically do not ask for sensitive information over the phone or via SMS or video call.
● Do not share personal information: Never share personal or financial information with someone who contacts you unexpectedly.
● Be sceptical of threats: Be suspicious if someone threatens you with legal action or fines. Legitimate organisations usually communicate through official channels and provide ample time to respond.
● Report suspicious activity: Report any suspicious messages to your bank and local authorities.
● Use security features: Enable two-factor authentication on your bank accounts and use strong, unique passwords for different services.