How to Find Out if a Business or Company Is Fraud or Not?

Shalini Rath Shalini Rath
Jul 15, 2022 4 min read
How to Find Out if a Business or Company Is Fraud or Not?

Talking about scams and frauds by businesses or companies has become a fad in today's times. The list is going only upward while the innocents are being looted, it has become imperative to stay updated and informed regarding a company or business.

According to the Federal Trade Commission, USA mentions that fraudulent opportunities mostly occur in the top 10 categories in its database reports of consumers complaining about fraud activities.

In India, fraudsters are tough to avoid. With many unemployed job seekers, the list of fake companies in India is long. This act of swindling is growing at an enormous rate with high risk in our digitally enabled world.

To think of frauds, the use of the internet has given birth to many security challenges that people tend to get trapped in. Over the years, India has seen many corporate frauds that left a deep wound in the confidence of many investors. Companies like Satyam, Kingfisher Airlines, DHFL, and YES Bank are some of the big corporate frauds the country has witnessed.

These scam artists are sophisticated as they exactly know how, whom, and where to target customers. In terms of investing in any business, consumers need to look for proper information and must know their rights. If a business has no information available, then that should be treated as a red flag for not pursuing it further.

While keeping in view these corporate frauds, there must be an awareness program for identifying fraud companies. Until there are certain programs available, you can always cross-check a company on your own.

In this article, we have curated some tips on how to identify a fraudulent business or company.

Specific things to look out for in a company to know if they are real are as follows:

Check Whether the Company Is Registered by Visiting the MCA Website
Check Out if the Company Has a Website and Look For Other Details on Their Site
Check for Wrong Spelling and Grammar
Check for Their Privacy Policy
Check for Their Customer Testimonials and Reviews
Check if the Company Accept Payments

Check Whether the Company Is Registered by Visiting the MCA Website

In India, for a company to be licensed, they need to register itself with the Registrar of Companies. MCA is the short form for the Ministry of Corporate Affairs, which is a government-regulated online portal containing the details of all the companies that have been incorporated in India.

On this website, you can check for the registration number of a company, what type of a company is, the date of incorporation, and other such details.

Check Out if the Company Has a Website and Look For Other Details on Their Site

Even if the company has a website, try to get a closer look at the address and contact number. Every website has a 'contact' page, where the address and a telephone number will be given to get in touch with them.

Try calling them with the number provided and search on Google maps to verify it is an actual office and not a fake one. However, you should also keep in mind that phone numbers are super easy to fake, so depending only on this fact can never give a piece of accurate information about the company.

If the company says 'local business' on its website, try to search in other cities to see if they are running their operation in other localities. If they happen to show the same website in other areas as well, know that they are not right. These businesses usually have copied templates with many broken hyperlinks.

Check for Wrong Spelling and Grammar

Spelling and grammar are the two most important things that will impress anyone. Make sure you go through every detail given on the website, and if you notice unsatisfactory English sentences and wrong spelling, then it is time for you not to indulge with them. Inaccurate sentence formation clearly shows there is something wrong, and you should investigate further before coming to a final decision.

Check for Their Privacy Policy

Another thing you can look for in a company to be legitimate is by reading their privacy policy carefully. Read about their history that will give a brief about how long the company is in operation.

Even if they have a privacy policy read through their mission and vision statement and look for anything suspicious. Reading through their privacy policy will also allow you to give information about their registered business address and other details which you can check on the MCA website.

Check for Their Customer Testimonials and Reviews

Feedbacks or reviews are the best way to find out about a company. The reviews can reflect different people's opinions and provide you with a concrete overall idea about the company.

Check if the Company Accept Payments

If you are trying to get employed by that company, remember they will never ask you to pay cash or any sort of payment. Other than this, if you are paying for any service, it is important to see how the company accepts payments.

They should accept payments through secure methods and not through shady and insecure methods like paper cheques or cash. Consider looking into payment methods from which you can your money back if things go wrong or if their product or service does not give you satisfactory results.


Scams are a part of the system, and we must accept that incidents like these are inevitable. It can be safe to say companies and the government, in general, must lay down a strong foundation system that keeps a close watch on such activities.

A substantial system with regular monitoring, a robust recruitment process by companies, and launching awareness programs for the public are the kind of things we desperately need.

The above-mentioned points are some of the factors through, which you can check a business's lawfulness, but it is always better to trust your instincts if you feel something is wrong with the company.


How do you know if a company is legit or not?

Check the trademark of the company, check their business on MCA, look for any grammatical errors, and check out the company privacy policy.

How do businesses identify and control fraud?

Many businesses develop a strategy against fraud, protect their businesses from cyber attacks, and know the customers in and out.

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