Securities and Exchange Board of India (SEBI) has launched a nationwide investor awareness campaign titled #SEBIvsSCAM, aimed at educating investors about various types of financial scams and how to safeguard themselves. This initiative is part of SEBI’s ongoing commitment to protect the retail investors from such scams in the securities market. Under SEBI’s guidance and regulatory oversight, the National Stock Exchange of India Ltd. (NSE) has rolled out a comprehensive investor protection drive to support this campaign.

The campaign comes at a critical time when digital financial frauds are on the rise, with fraudsters using increasingly sophisticated and deceptive methods to target investors. From fake trading apps and deepfake videos to unregistered investment advisors and misleading stock tips on social media, scammers are exploiting technology and denting investor’s trust. Many individuals fall prey to schemes promising guaranteed returns/unusually high returns, pump-and-dump tactics, dabba trading, fraudulent foreign portfolio investment offers, etc—often resulting in significant financial losses.

#SEBIvsSCAM seeks to raise public awareness, promote safe investing habits and empower investors to make informed decisions. By spotlighting common scams and offering guidance, the campaign aims to help investors recognize warning signs, verify sources and report suspicious activities—ultimately contributing to a more secure and transparent financial ecosystem.

To ensure maximum outreach, NSE, under the aegis of SEBI will leverage a mix of media platforms including television, radio, print, digital and social media. We will also spread the Investor Awareness messages through Investor Awareness Programs which are done through physical, digital and hybrid modes. This multi-channel approach is designed to reach investors across urban and rural areas, in multiple languages and through formats that are accessible and engaging to diverse audiences.

Investor Advisory: Stay Alert, Stay Protected

• Do not fall for promises of assured or fixed returns in the securities market. Such offers are illegal and misleading.
• Avoid unsolicited messages from unknown sources. Always verify information through official websites such as SEBI, NSE or the concerned company.
• Do not download unregulated apps or join chat groups offering investment advice.
• Engage only with SEBI-registered intermediaries or research analysts. Verify their credentials at: https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes
• Download trading apps only from SEBI-registered trading members via official app stores. Verify apps https://www.nseindia.com/trade/members-compliance/list-of-mobile-applications
• Transfer funds only to registered client bank accounts of your stockbroker. Verify account details at https://enit.nseindia.com/MemDirWeb/form/tradingMemberLocator_beta.jsp
• From October 1, 2025, investors will be able to make payments to SEBI-registered intermediaries using a standardized UPI handle format (e.g., abc.brk@validbank) .
• Report any fraudulent activity at www.cybercrime.gov.in or call the Cybercrime Helpline at 1930. For investor support, contact NSE at 1800 266 0050.

Issued in public interest by the National Stock Exchange of India Ltd under the aegis of Securities and Exchange Board of India.

Banking fraud is an unfortunate reality in the financial sector, and even India’s leading private-panel institutions like the HDFC group have had to confront serious allegations. From multi-crore fund misappropriation claims to internal fraud by bank employees—and even regulatory actions that halted new digital initiatives—the HDFC saga provides important insights into the challenges of maintaining robust financial integrity.

Major Cases of Fraud and Misconduct within HDFC Bank

1. Lilavati Trust Fund Misappropriation Allegations

The controversy began when the Lilavati Kirtilal Mehta Medical Trust, which manages Mumbai’s Lilavati Hospital, leveled several allegations against HDFC Bank’s top executive, CEO Sashidhar Jagdishan. The Trust claimed that:

• ₹2.05 crore was paid in bribes to influence internal decision-making in favor of a rival faction.
•  ₹25 crore was transferred into an HDFC Bank account without proper authorization.
• An additional ₹1.5 crore was falsely recorded as a Corporate Social Responsibility (CSR) donation.
• HDFC Bank adamantly denied these assertions, describing them as attempts to derail the bank’s ongoing legal endeavors to recover a long-outstanding loan of ₹65.22 crore from Splendour Gems Ltd—a firm with historical ties to the Mehta family.

2. Fraud by a Relationship Manager Involving a ₹3 Crore Transfer

In another striking case, customer Meenakshi Kapuria alleged that her trusted relationship manager, Payal Kothari, defrauded her by transferring ₹3 crore from her fixed deposits into fraudulent accounts. Key details of the case include:

• Kothari convincing Kapuria to sign blank cheques under the guise of investing in lucrative schemes, such as mutual funds and gold bonds.
• The unauthorized breaking of fixed deposits and subsequent rerouting of funds into accounts set up for fraudulent purposes.
• A deliberate change in Kapuria’s registered contact details to delay any alerts regarding these transfers.

The Bombay High Court took note of the mismanagement, condemning the slow response from local police. HDFC Bank later reimbursed almost the entire disputed amount (₹2.9 crore) and confirmed that enhanced internal controls were being implemented to prevent such occurrences in the future.

3. Regulatory Action: RBI’s Temporary Ban on New Credit Card Issuances

In a significant regulatory move, the Reserve Bank of India (RBI) in December 2020 temporarily barred HDFC Bank from issuing new credit cards and launching additional digital initiatives. This action came as a result of repeated outages in HDFC’s online and mobile banking services:

India's national nodal agency for responding to computer security incidents in the country, the Indian Computer Emergency Response Team (CERT-In), has recently issued an advisory warning about the rising threats posed by Al-generated deepfakes.

Deepfake technology, which involves the use of artificial intelligence (AI) to create highly realistic and convincing fake videos, images, and audio, is becoming increasingly sophisticated. This technology poses significant risks, including the potential for disinformation, fraud, and social engineering attacks.

The advisory highlights risks such as misinformation, financial fraud, and privacy violations, and provides guidance for individuals and organizations to detect and counter these threats.

Here are some key points from the advisory:

1. Verify Sources: Ensure digital content is from reliable sources before sharing or acting on it.

2. Look for Anomalies: Identify signs such as unnatural blinking, mismatched lip-sync, inconsistent lighting, or distorted visuals.

3. Cross-Reference Information: Confirm the accuracy of content through multiple trusted sources

4. Limit Personal Data: Avoid sharing high-resolution images or videos online.

5. Use Multi-Factor Authentication (MFA): Secure accounts with MFA to reduce risks of hacking.

6. Monitor Public Channels: Keep track of potential deepfake content targeting your Organization.

7. Adopt Secure Communication: Use encrypted channels for sensitive discussions to prevent interception.

The advisory also urges organizations to strengthen detection tools, monitor public channels, and enhance digital forensics capabilities.

The advisory, with original issued date of 27 November 2024, serves as a critical resource for identifying, assessing, and mitigating the threats posed by synthetic media.

It's crucial to stay informed and vigilant about these threats.

Myntra, a Flipkart subsidiary, recently reported a significant loss of ₹1.1 crore due to a refund scam in Bengaluru. Fraudsters exploited the company's refund policy by placing bulk orders and then claiming refunds for non-existent, incorrect, or fake items.

The scam took place between March and June 2024, and involved around 5,529 fraudulent orders delivered to various addresses across Bengaluru.

The fraudsters would often claim that the number of products received was less than what they had ordered, or that the items were different from what was ordered.

Myntra has approached the Bengaluru police to investigate the matter. It's suspected that a gang from Jaipur, Rajasthan, is behind these fraudulent activities. The police have registered a case under the Information Technology Act and IPC sections 419 (cheating by personation) and 420 (cheating and dishonestly inducing delivery of property).

Myntra's case of fraud comes within a few days after another e-commerce platform Meesho faced similar cheating by fraudsters. Cybercrime police in Surat arrested three individuals who cheated Meesho by posing as suppliers and customers. They placed orders and then claimed refunds or raised complaints about the products received.

Myntra is also working on tightening its refund policies and improving its fraud detection mechanisms to prevent such incidents in the future.

According to reports, Flipkart and Myntra may soon start charging cancellation fees for orders that are canceled. The reports, that are still speculative, suggest that Flipkart and Myntra customers will only have a limited amount of time to cancel their orders. After that deadline is crossed, the customers will not be able to cancel the order. However, the e-commerce giant has not confirmed the development yet.

Besides, Myntra has recently ventured into quick commerce with its new service, M-Now, which promises to deliver fashion and beauty products within 30 minutes.

Myntra has bounced back to profitability in FY24 after a loss of ₹782 crore in FY23. The company posted a profit of ₹30.9 crore in FY24, driven by a 14.71% growth in operational revenue and effective cost-cutting strategies.

Getting back to rise in cases of frauds, e-commerce frauds in India have been on the rise, especially with the increase in online shopping. About 57% of all fraud incidents in India are platform frauds, with over 26% of organizations losing over USD 1 million due to it, said a report by PwC India.

Payment Fraud accounts for 92% of all customer frauds, including unauthorized digital purchases and identity theft. Around 40% of platform frauds are conducted by internal actors, often in collusion with external perpetrators.

The Aadhaar-enabled Payment System (AePS) in India has recently faced exploitation by cybercriminals, leading to depositors losing their hard-earned savings through these frauds. These scams often involve cloned or fraudulently obtained fingerprints to access victims' bank accounts.

In one instance, a gang of cybercriminals in Hyderabad fraudulently withdrew ₹14.64 lakh from 149 customers. In an another AEPS related scam in Bihar, cyber criminals exploited the victim's Aadhaar biometrics data obtained from government land records to make transactions using the AePS.

The civil society platform, Bank Bachao Desh Bachao Manch, has raised concerns about these scams and urged the Reserve Bank of India to take action.

To protect against AePS fraud, users are advised to lock their Aadhaar biometrics and regularly monitor their bank accounts for any suspicious activity.

To protect yourself and prevent misuse of Aadhaar data, consider the following steps:

1. Lock Your Biometrics: Use the m-Aadhar app or the Unique Identification Authority of India (UIDAI) website to lock your biometrics. This prevents unauthorized access to your Aadhaar data.

• Use virtual IDs: Process online transactions using a virtual ID instead of Aadhaar.

2. Contact Your Bank: If you become a victim of AePS fraud, immediately contact your bank's helpline number and report the fraudulent transaction. Provide any relevant details, such as SMS or email notifications.

3. Block Your Account: Request your bank to temporarily block your account to prevent further unauthorized transactions. Change your PIN, internet banking password, and other relevant passwords associated with your account.

4. File a Police Complaint: Report the incident to the National Cyber Crime Reporting Portal. You have 90 days to raise a chargeback on the transaction by approaching your bank or calling their service helpline.

5. Know Transaction Limits: AePS has per-day and amount-specific limits. Currently, the maximum limit for a single transaction is ₹10,000, with a maximum of five transactions per day. Be vigilant and block your account immediately if you notice any suspicious activity.

The government has acknowledged the issue and is working on measures to enhance the security of the AePS to prevent such frauds in the future.

The Enforcement Directorate (ED) recently conducted an investigation into several Chinese-owned fintech companies operating in India. The investigation revealed that these companies were able to turn an investment of Rs 1 crore into Rs 6 crore in just 90 days by offering short-term loans through mobile apps.

These companies charged 30%-40% of the sanctioned loan amount as an upfront processing fee.

Interest rates on these loans were as high as 36%, making the effective annual interest rate reach up to 2,000%, eventually making repayment extremely difficult. This fee is charged every time a borrower takes a loan. These short-term loans are for anywhere between a week to four months.

According to an Indian Express report, the ED Investigation found that the borrowers and their contacts are also sent fake legal notices, messages labelling them as thieves, apart from adding them to Whatsapp groups where abusive messages are sent. Women contacts are harassed with obscene messages.

Borrowers often found themselves in a debt trap, taking new loans to pay off previous ones due to the high costs involved.

Despite the high costs, these companies managed to achieve a net profit margin of Rs 5.2 crore in just three months.

The ED sources said that, although such fintech companies have Indian employees, the ultimate owners are Chinese who take the decisions. In the recent case of PC Financial Services (PCFS) which ran the Cashbean app, ED found that Rs 429 crore was sent to Chinese owners allegedly through bogus transactions which are violations under FEMA.

Earlier this year, the ED conducted raids across 19 locations in Delhi, Chandigarh, Haryana, Punjab, and Gujarat and conducted investigation of several Chinese-owned fintech companies, including Shinebay Technology India Private Limited (STIPL) and Mpurse Services Private Limited (MSPL).

These companies were involved in unethical lending practices through mobile apps, leading to significant penalties and asset seizures. Borrowers were harassed through threatening phone calls, unauthorized access to personal information, and circulation of morphed photographs.

In April 2022, the ED had taken action by attaching assets worth Rs 6.17 crore belonging to these fintech companies. This investigation highlights the need for stricter regulations and oversight in the fintech sector to protect consumers from predatory lending practices.

The ED has initiated investigations under various sections of the Indian Penal Code (IPC) and the Information Technology Act, 2000.

The ED investigation has also found that these Fintech companies get into the lending business after entering into agreements with non-banking finance companies (NBFC) which have valid RBI licences. The NBFCs themselves earn a guaranteed return without investing anything by virtue of just holding the licences.

Pairpoint, a blockchain-based trading venture owned by Vodafone and Sumitomo Corporation, has announced a strategic partnership with Sensos, a leading supply chain solution company founded by Sony Semiconductors, to address the growing issue of supply chain fraud. This collaboration aims to leverage Sensos' expertise in smart label technology, which originated from Sony Semiconductor Israel, to enhance the security and transparency of supply chains.

The partnership is expected to integrate Sensos' supply chain management solutions with Pairpoint's Economy of Things (EoT) platform. This will enable logistics companies to securely track their goods at every stage of the supply chain. The use of Sensos' cellular tracking labels and AI-powered control tower, combined with Pairpoint's digital identity, trust, and transactional platform, will allow for the secure and immutable recording of all goods' movements, from port departures to final deliveries.

This initiative is particularly significant as it not only aims to combat fraud but also to improve operational efficiency and cost savings for businesses across multiple industries. The solution is currently being piloted in cooperation with global logistics operator Unilog, part of the ICL Group, at several sites in the US and Europe.

Pairpoint’s secure technology overlays Sensos’ highly reliable, real-time supply chain management solution through the Pairpoint-enabled iSIM and device agent software embedded into a smart label. Every logistic transaction is then verifiable, transparent, and resistant to tampering, effectively combatting fraud, and enhancing trust across the supply chain ecosystem.

The CEOs of both Pairpoint and Sensos have expressed their enthusiasm for the potential impact of this partnership on the supply chain sector, highlighting the importance of intelligent and globally connected cellular labels and the Pairpoint platform.

Alex Zeltcer CEO Co-founder (Left) and Ziv Isaiah CTO & Co-founder (Right)

Round A funding led by MoreTech Ventures and multiple reinvestments from Seed investors

Online retailers of FinTech products, cryptocurrencies, NFTs, games, and others sacrifice 30% of sales due to fraud suspicions. nSure.ai’s real-time fraud protection intelligence reduces decline rates by 90%, using merchant-specific data to approve up to 98% of transactions.

nSure.ai, the world’s first fully automated chargeback guarantee platform, raised $18 million in Series A funding, led by MoreTech Ventures with additional investments by seed-round participants, including DisruptiveAI, Gryffin Ventures, and Moneta Seeds. The funding will allow the company to extend anti-fraud, chargeback-free guarantees while meeting the growing demand from various sectors who are lacking a sufficient fraud prevention system.

As online marketplaces boom, fraudsters are taking advantage of outdated fraud-prevention systems that weren’t developed to manage the sales of FinTech products, crypto, NFTs, and other virtual goods. For digital goods, such as gift cards, gaming, crypto, financial services, and airline tickets, the seller is unable to recoup the lost goods. This forces online retailers to sacrifice up to 30% of sales, making them responsible for lost goods, regardless of their costly security tool. nSure.ai has already proven itself in the prepaid and gaming sectors and is actively securing other sectors, offering guaranteed chargeback protection to all clients.

Blazing the trail for the future of digital transactions, nSure.ai has implemented AI-driven Fraud Prevention Intelligence. This system continuously evolves along with the threat landscape to guarantee that all legitimate transactions are approved, and that ~2% of fraudulent charges are kept out.

"FinTech companies powering wallets and crypto-based services offer an immediate transfer of funds, creating a huge incentive for sophisticated fraudsters and scalable fraud patterns," said Alex Zeltcer, Co-founder and CEO of nSure.ai. 

• Data Insights revealed by TrustCheckr, an analytics startup
• Top digital frauds in India occur in QR Codes, KYC, Cash-back, Fake Selling and lottery scams
• Users must beware of phone calls and SMS-es from non-home states offering ‘too-good-to-believe’ schemes
• Top cities where fraudster syndicates are active are Kolkata, Delhi, Jaipur, Guwahati, Patna, Chandigarh, Meerut

New Delhi, 29th April: TrustCheckr, a fraud data insights and analytics startup, revealed that the most number of UPI scams take place on payment apps and market places with 41% of fraud distribution accounted in eastern parts of India - West Bengal, Odisha, Bihar, Assam, Kashmir, Arunachal Pradesh, Meghalaya, Tripura, Nagaland, Mizoram, Manipur, Himachal Pradesh and Sikkim. The top frauds take place in KYC, fake cash-back, frauds through digital wallets, fake-selling, QR codes, UPI phishing, lottery scams and financial fraud on social media.

Insights into the survey reveal that the top scamsters were from Patna, Chandigarh, Kolkata and Meerut for one of the top payment apps at 15%. Most QR Code scams originate from Assam, accounting for 20% of the total distribution.

Interestingly, it was observed that many fraudster profiles claimed to be army men; this is most likely the result of border clashes between India and China due to which there was an upsurge in patriotic sentiments among the general public and the fraudsters looked to cash in on the sentiment by playing the emotional card. In QR code frauds, most fraudsters posed themselves as army men selling something on marketplaces.