5 Ways to Protect Your Demat Account from Fraud

In the last decade, the number of fraudulent events associated with Demat accounts has been increasing to a good extent. For a few people, these incidents of fraud have tainted their experience. In various cases, brokers have moved ETF units to be used as collateral for margin financing on trades without the investors’ authorization.

The most well-known event regarding this case is the recent pledge of Dalmia Bharat’s MF units by Allied Financial Services. Although the case is heard, the Supreme Court will hear the case on claims of fraud and conspiracy, which could be a crucial issue. In addition, several more cases have raised concerns regarding the security of the Demat account. These issues have raised awareness among people, and they have now started trying to find ways to stop them.


Do you know what steps you’ll be able to take to avoid being a victim of such a scam? If you do not know the solution, some guidelines can be beneficial. It will help you avoid becoming a victim of fraud. Demat account holders may prescribe some guidelines while making any transaction.

These guidelines are as follows:

  1. Keep a note of all of your account statements. You need to keep track of all the transactions and statements in your checking account to remember anything malicious. A holding statement could be a document that lists your stock holdings. You’ll want to check everything associated with your Demat account regularly. Information about all shared credits and debits in your account throughout a selected period allows you to trace them.
  2. The Debit Instruction Slip booklet: a very important feature of your account must correspond to a bill of exchange. If you think that it might be better to transfer your shares from one Demat account to another, don’t hesitate to contact your bank authorities about the authorities and formalities within the same process.
  3. As a result of your involvement in these trading activities, the broker will ultimately have a vested interest in your ownership and point to conflicts of interest.
  4. A general-purpose agreement would have sufficed in the past to transfer the sale of cash because the brokers usually need some approval from their investors to sell or transfer cash or assets. It’s safer for you if you adopt this method because it can prevent fraud.
  5. When people travel overseas, they often dump their free Demat account. In these circumstances, you’ll be able to give the DP a signed application to freeze the Demat account until you can access or return it. It can aid your relaxation and allow you to enjoy your vacation rather than being constantly concerned about fraud.



Conclusively, I think that incidents of misconduct and fraud have continued to fall dramatically since the 1970s. The present Demat account holders or potential subscribers, on the other hand, shouldn’t take it as a right and must gather important information before risking their capital in the open-end fund markets. You want to beware of all the possible frauds and take precautions.



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