How to Safeguard Against Demat Account Fraud
Demat accounts have transformed stock trading, offering efficiency and convenience. However, they’re not entirely immune to fraud. Protecting your demat account requires vigilance and adherence to security measures. Here’s how you can safeguard your account effectively:
Maintain Records
Regularly review your DP holding and transaction statements. Promptly report discrepancies to your brokerage firm to prevent misuse.
Secure Essential Documents:
Keep your Debit Instruction Slip (DIS) booklet safe and protected with a strong password. A compromised DIS can lead to unauthorised transactions.
##. Choose Reliable Brokers:
Research brokerage firms thoroughly. Avoid those involved in proprietary trading to minimise conflicts of interest and ensure credibility.
Freeze Inactive Accounts:
If your account will remain unused for an extended period, request to freeze it. This prevents unauthorised transactions while still receiving dividends and bonuses.
Understand Power of Attorney:
Opt for limited-purpose agreements instead of general-purpose ones. These require brokers to seek consent for every transaction and can be revoked anytime.
Monitor Irregularities:
Regularly check your account for suspicious activity and act promptly to address issues.
Use Strong Passwords and SMS Alerts:
Create robust passwords and enable real-time SMS notifications for transactions. This ensures immediate detection of discrepancies.
By following these simple yet effective steps, you can safeguard your demat account from fraud. Vigilance and proactive measures are your best defence against potential risks.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.