Understanding identity theft and ways to prevent it

22 January, 2024

Identity theft is a malicious act wherein your personal information is fraudulently obtained and misused for financial gain. This information can include bank account details, Credit Card information or your KYC details like PAN, Aadhaar, etc.

How do identity theft frauds happen?

The idea behind identity theft fraud is based on stealing your identity to use it for illegitimate purposes. Here are the different ways in which identity theft fraud can happen:

1) Phishing attacks

Phishing is one of the most common and dangerous ways through which fraudsters can initiate identity theft fraud. They often use deceptive emails, messages or websites to trick you into revealing sensitive information. For instance, they may create a fake website that will be an exact copy of your bank’s website or a social media platform. Innocent people may unknowingly provide their login credentials or other personal details that are then exploited by these fraudsters.

2) Data breaches

Large-scale data breaches are a common source of stealing identities. Here, cybercriminals gain unauthorised access to databases containing personal information. These databases can come from any organisation or institution. Once obtained, this information may be used for fraudulent activities.

3) Malware and skimming devices

Malicious software (malware) is often used by cyber fraudsters to extract confidential information and passwords. They can either capture keystrokes or track the activity of your system.

Furthermore, physical skimming devices can be attached to ATMs or card readers. These devices are capable of recording your card information, thus providing fraudsters access to your bank accounts.

4) Social engineering

Through social engineering tactics, fraudsters can manipulate you into divulging your confidential information. Social engineering can include fraudsters representing themselves as bank officials, tricking you into providing account details over the phone or exploiting personal relationships for financial gain.

What can happen if your identity gets stolen?

1) Unauthorised financial transactions

This is one of the most common reasons for carrying out identity theft. Fraudsters can use stolen information to make unauthorised withdrawals, transfers or purchases from your bank accounts or Credit Cards.

2) Loan fraud

Your stolen identity can be used by fraudsters to apply for loans or Credit Cards fraudulently. In such cases, you might be left with the burden of repaying debts you did not incur. In extreme cases, your credit score can get damaged significantly if you are not aware of the loan fraud that happened in your name. This can hamper your ability to take loans in the future.

3) Legal consequences

In some extreme cases, you may end up facing legal troubles if the fraudster engages in criminal activities using your stolen identity.

How to stay safe from identity theft fraud?

Here are a few ways of protecting your identity from such frauds:

1) Use strong passwords

You should create strong and complex passwords for your bank accounts. Always avoid using easily guessable information such as birthdays or names to create your passwords. You should also keep changing your passwords periodically.

2) Enable two-factor authentication

Most companies now allow two-factor authentication to customers using their services, like emails, banking services, etc. You should activate two-factor authentication for all your banking accounts. This provides an added layer of security. Fraudsters will require a second form of verification and there are high chances that they won’t be able to access it.

3) Monitor your accounts regularly

You should keep a close eye on your bank and Credit Card statements. If you find any unauthorised transaction, immediately report it to your bank.

4) Be cautious with personal information

You should avoid sharing personal information through unsolicited emails, phone calls or messages. In case you are bound to share, always verify the legitimacy of these requests before providing any such information. Banks and financial institutions do not ask for confidential information over calls and emails.

5) Secure your devices

A common identity protection measure is to install reputable antivirus and anti-malware software on your devices. This will keep your operating system and applications updated to patch any security vulnerabilities.

HDFC Bank’s Vigil Aunty is actively spreading awareness to banking customers, helping you stay vigilant and secure. Apart from educating people about different types of fraud and its prevention techniques, she also guides those who have been defrauded. Reach out to Vigil Aunty for any assistance relating to banking fraud and prevention techniques.


​​​​​​​Join Vigil Army, where Vigil Aunty will decode various frauds and give people a heads-up on the dos and don’ts of combating frauds online. To join the Vigil Army, send ‘Hi’ to her via WhatsApp number 7290030000.