Investing in mutual funds? Beware of frauds before giving personal details

While investing in mutual funds is always advisable because of tax benefits, but at the same time, it may become your biggest nightmare. 

As all the transactions are done digitally, the rise in cyber crime has become a concern for any an investor. 

According to a report by Indian Computer Emergency Response Team, which is part of Ministry of Electronics and Information Technology, revealed that in every 10 minutes, one cybercrime is reported in India. 

If you are first time investor in MF industry, there are chances of getting trapped at first place considering less knowledge about the sector. 

Dhruv Mehta, Key Spokesperson, United Forum, said, "With almost 2500+ MF schemes across multiple categories and asset classes, it is difficult for the customer to understand these schemes and decide which scheme best fits his/her requirement. Also it becomes easier for anyone to set up a fake website and offer to sell you schemes that promise high returns in a short span of time."

Once the ‘website’ collects details of your bank account and other KYC forms (phishing / vishing), they can easily rob you of your life-savings. While it is easier to track humans who committed similar frauds, it is virtually impossible to track your money in the virtual world. 

Parking money in any funds, banks or equities always a risk as you cannot predict markets performance or economy. However, apart from non-favorable events, a certain amount of mis-selling do persists in Mutual Fund space.