International Bank Fraud: How It Happens and Ways to Protect Your Money

Posted on Wednesday, May 14th, 2025 | By IndusInd Bank

In an increasingly interconnected world, financial transactions are no longer confined to borders. Whether for business, travel, or online shopping, people frequently engage in international banking. However, with the convenience of global banking comes the risk of international bank fraud.

Cybercriminals and fraudsters have developed sophisticated methods to steal money, manipulate financial transactions, and gain unauthorized access to bank accounts. For Indian citizens who conduct international transactions—whether through foreign bank accounts, international credit cards, or digital wallets—staying informed about potential fraud risks is essential.

This blog explores the various ways international bank fraud happens and provides practical steps to safeguard your money.

How International Bank Fraud Happens

Fraudsters use various tactics to exploit loopholes in banking systems, steal sensitive information, and manipulate financial transactions. Some of the most common types of international banking fraud include:

1. Phishing and Smishing Attacks

Phishing is a common cybercrime where fraudsters send fake emails or messages pretending to be from a legitimate bank. These emails often contain links to fake banking websites, tricking users into entering their login credentials, credit card details, or OTPs.

Smishing (SMS phishing) works similarly, where scammers send fraudulent text messages with links that lead to fake banking portals. Once you enter your details, scammers gain access to your funds.

Example: You receive an email from what appears to be your bank, stating that your account has been compromised. The email urges you to click on a link and verify your identity. However, the link redirects to a fake website designed to steal your credentials.

2. Card Skimming and Cloning

Card skimming involves fraudsters installing hidden devices on ATMs, fuel stations, or point-of-sale terminals to steal debit or credit card information. When you swipe your card, the skimmer records your card details and PIN, which fraudsters later use to create a duplicate (cloned) card.

Example: While withdrawing cash at an international ATM, you unknowingly use a compromised machine fitted with a card skimming device. Days later, you notice unauthorized transactions from a foreign location.

3. Business Email Compromise (BEC) Fraud

This fraud primarily targets businesses engaged in international trade. Scammers hack into company email accounts and manipulate invoice details, tricking companies into sending payments to fraudulent offshore accounts instead of legitimate suppliers.

Example: An Indian exporter receives an invoice from an international supplier. However, hackers have altered the bank details in the invoice. The exporter unknowingly transfers the payment to the scammer’s foreign account instead of the actual supplier.

4. Fake International Investment Scams

Scammers pose as foreign investment firms or cryptocurrency platforms promising high returns. They lure investors into transferring money overseas.

Example: A fraudster advertises an exclusive investment opportunity in foreign stocks or real estate with guaranteed returns. After investing a significant sum, the investor realizes the company does not exist, and the scammer disappears.

5. SIM Card Swapping and Identity Theft

Fraudsters use stolen identity documents to request a SIM card replacement from your mobile provider. Once they gain access to your phone number, they can intercept OTPs and authorize fraudulent international transactions from your bank account.

Example: A scammer gathers your personal details (passport, Aadhaar, PAN) and requests a SIM replacement from your mobile provider. Once they have control over your number, they access your bank account and transfer funds internationally.

6. Money Mule Scams

Fraudsters trick individuals into receiving and transferring money on their behalf, making them unwitting accomplices in money laundering operations.

Example: You receive a job offer to act as a financial intermediary for an international company. They ask you to receive payments and transfer them to another account, but the money comes from illegal activities.

Also Read: How to Spot a Personal Loan Fraud Before it is Too Late?

How to Protect Your Money from International Bank Fraud

Given the sophisticated nature of international banking scams, it is essential to stay vigilant and take proactive measures to safeguard your financial assets. Here’s how

1. Enable Multi-Factor Authentication (MFA)

Banks offer multi-factor authentication (MFA) to provide an extra layer of security. By enabling MFA, even if hackers obtain your login credentials, they cannot access your account without additional verification (OTP, biometrics, or security question answers).

Actionable Tip: Activate MFA for all banking apps and international money transfer services.

2. Avoid Clicking on Suspicious Links

Never click on links in emails, SMS, or WhatsApp messages claiming to be from your bank. Instead, visit the bank’s official website manually or call customer support to verify the request.

Actionable Tip: Always check the email sender’s address before taking any action. Banks never ask for sensitive information via email or SMS.

3. Use Secure Payment Methods

When making international transactions, use secure and well-known platforms or official bank transfer channels. Avoid sending money through unverified third-party apps or cryptocurrency platforms without proper research.

Actionable Tip: Always check if the payment gateway is PCI DSS compliant and encrypted before entering your card details.

4. Monitor Your Bank Statements Regularly

Check your bank statements, credit card transactions, and international transfers frequently to spot any unauthorized activities. Report suspicious transactions immediately to your bank.

Actionable Tip: Set up real-time SMS/email alerts for every international transaction.

5. Use Virtual Credit Cards for Online Transactions

Leading banks like IndusInd Bank offer virtual cards with their Savings Account, which generate temporary card numbers for online transactions. This prevents fraudsters from misusing your actual credit card details.

Actionable Tip: Use a virtual card for one-time international purchases to minimize risk.

6. Verify Business and Investment Offers Thoroughly

Before investing in foreign stocks, cryptocurrencies, or overseas businesses, research the legitimacy of the company. Check their registration details, official website, and online reviews.

Actionable Tip: Avoid any investment scheme that guarantees high returns with zero risks—it’s likely a scam.

7. Protect Your Personal Information

Never share your Aadhaar, PAN, passport details, or bank credentials over the phone or email. Scammers often pose as bank representatives to trick individuals into revealing personal information.

Actionable Tip: Use identity protection services that alert you if your personal details are leaked online.

Also Read: Digital Banking Frauds and its Types

Summing Up

By using secure banking methods, enabling multi-factor authentication, avoiding suspicious links, and monitoring transactions, you can minimize the risk of falling victim to international fraud. If you ever suspect a fraud, immediately report it to your bank, RBI, or report on the Cyber Crime Helpline (1930). Remember, financial awareness is your best defense against fraudsters. Stay vigilant, bank safely, and protect your hard-earned money.