Financial Scams in 2025: How to Spot and Avoid Them

The year 2024 was quite challenging, with several cyber frauds causing financial distress to innocent people. 

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Despite the numerous benefits the digital revolution has brought to the country, many individuals continue to fall victim to financial scams through cyber fraud. 

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While the authorities continue to hold multiple awareness drives to inform citizens of new scams, 2025 is going to be a crucial year for consumers who aren’t well-versed in technological advancements. 

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Aside from the old telecommunication scams, 2025 is predicted to see a swift rise in AI scams targeting gullible consumers. 

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Let’s check out some of the popular scams that you should be aware of in 2025. We will explain how to identify the scam and avoid it. 

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How to Avoid Financial Scams in 2025?

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1. Fraud Loan Apps 

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Loan and credit scams have been haunting innocent consumers for over a decade now. Earlier, these scams happened over the phone or through in-person credit card signups.

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Now, the fraudsters have adopted the digital route to target consumers who are in dire need of credit. Over the past few years, fraud loan apps have been one of the main cybercrime instruments to cheat people of money. 

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These fraudulent apps claim to offer quick credit to users with high interest rates, which further entangles the users in the heavy debt cycle. 

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How to identify fraud loan apps?

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• These apps do not have any official websites. 
• They do not follow RBI guidelines. 
• They don’t offer a loan agreement. 
• They claim to offer quick cash without any documentation.
• These apps often demand the processing fee in advance.

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2. Digital Arrest Scam

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Digital arrest scams are becoming increasingly popular in India. The year 2024 saw the rise of digital arrest scams, where scammers put the victims in a digital arrest, banning them from leaving their house with digital monitoring.

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The scam takes place over a phone call where the victim is accused of possessing illegal items in a parcel or courier under their name. 

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The scammers then apprehend the victim by connecting them with a fake policeman or other government authority over a video call. Then the victim is put under a digital arrest until they pay the fake authority a heavy sum to get these accusations off their back. 

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Recently, an Indian influencer named Ankush Bahuguna had fallen prey to a digital arrest scam for 40 hours, and he decided to share his experience to raise awareness among users. 

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How to identify a digital arrest scam?

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• Do not trust calls from unknown numbers. 
• Verify the identity of the caller through reliable apps. 
• Do not share personal information with unknown callers. 
• Visit your nearest police station in case of any confusion.

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3. Deepfake Scam

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Deepfake scams are very common these days, cheating millions of people of money and their personal information. With the popularity of AI technology, deepfake scams are becoming more common.

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It is easy to scam people into trusting a product or service by using deepfake technology to cheat users into believing that the product/service is endorsed by a well-known personality.  

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Many fraudsters use celebrity videos to endorse their fake or scam products to attract innocent consumers and steal their personal information, such as credit card details. 

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How to avoid deepfake scams?

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• Verify the videos or advertisement posters featuring celebrities or experts with their official social media handles. Most celebrities, influencers, and experts share their endorsements on their social media handles. 
• Before purchasing any products, services, or making any investments, check-in with a trusted and verified person in your network.
• In case you come across any suspicious videos or person promoting a suspicious product, report it to cybercrime.gov.in.

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4. PAN Card Fraud

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Many Indian citizens, especially people in their late 60s, have suffered financial losses due to PAN Card fraud. 

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Nowadays, many websites and applications ask for your identification proof, such as an Aadhar Card or PAN Card, for verification. However, some fraudulent websites and apps use these identification details to scam users. 

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PAN Card scams are linked to financial frauds as scammers can access the victim’s bank details and take huge amounts of loans under their name.

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How to avoid PAN Card fraud?

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• Do not trust websites that start with "http." Websites that start with “https” mean that they are secure and can be trusted. 
• Do not enter your PAN Card details on suspicious websites. 
• Monitor your credit score to make sure there is no fraudulent activity on your bank account. 
• Check Form 26AS to verify transactions linked with your PAN card. 

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5. KYC Scam

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KYC, or Know Your Customer, scams are getting more frequent due to misuse of personal information. Banks and other financial institutions need KYC details of their customers to protect themselves from financial and security fraud. 

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However, customers are also becoming victims of KYC scams, where fraudsters pose as bank executives and financial institutions in order to obtain personal information for their own benefit.

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How to avoid KYC scams?

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• If you receive any SMS or call asking to update your KYC details, make sure to contact your bank to confirm the inquiry. 
• Ask your bank branch executive to guide you through the process of updating your KYC details securely.
• Always contact your bank through their official website or by visiting their offline branch. 

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6. Illegal Parcel

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There were increasing cases of illegal parcel scams in 2024. Thousands of Indians fell victim to the courier scam, losing a lot of money. 

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Many innocent victims were extorted of money by fraudsters posing as law officials or courier service providers, claiming that they'd found illegal items in the victims' parcels. 

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They further threatened the victims with prison time and heavy fines and asked them to pay huge amounts to get them out of this situation. 

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How to dodge illegal parcel scams?

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• Do not click on links received via SMS or WhatsApp. 
• If you receive any call regarding an illegal package, contact the courier company’s customer service via their official website.
• If a person claims to be a police official over a call, disconnect the call and report their contact details on the government cybercrime website.  

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7. Stock Market Investment Scam

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The stock market investment scam is one of the most popular types of financial fraud. Scammers lure innocent investors into joining message groups or taking their course to learn how to make quick profits. 

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Young and immature investors tend to easily fall into the hands of such scammers. These scammers encourage such investors to invest their money in their courses or in their fake apps to fraudulently take their money. 

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How can you protect yourself from investment fraud?

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• Do thorough research about the person before taking any sort of financial advice from a stranger. 
• Do not invest money through suspicious apps. 
• Read about investment opportunities before investing in any asset.
• Only rely on financial advice from verified experts and sources.

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8. Emergency Call Scam

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The latest scam that caused financial and emotional stress to many individuals was the emergency call scam.

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In this scam, the fraudsters posed as the victim's close relatives, such as father, son, sister, mother, etc., to extort money. 

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They would call victims from unknown numbers and pretend to be in some sort of medical or legal emergency to quickly transfer money into their account.

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A lot of gullible victims lost money to this scam, which further caused them mental distress. 

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How to avoid emergency call scams?

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• Do not send money if you get a call from an unknown person. 
• Call your said relative or their friends’ to verify the situation. 
• If you can’t get in touch with your relative, consult a law official.