Financial Frauds Surge in India: INR 30,000 Cr in Bank Frauds, 69% of Online Frauds Target Indian Consumers

In the just-concluded fiscal year 2023, the Reserve Bank of India (RBI) reported a 62% decrease in overall bank frauds, amounting to INR 30,000 Cr (302.5 billion rupees). Despite the decline, the significant number of deceitful transactions remains a worrying financial threat to Indian citizens. Moreover, a concerning 69% of all online fraud cases in 2021 targeted Indian consumers [1].

India’s Financial Scams Landscape

The Indian financial sector faced a surge of sophisticated scams in 2023, with various fraudulent schemes targeting unsuspecting individuals across different sectors.

UPI (Unified Payments Interface) frauds are a notable threat in the realm of digital payments. Tactics include disguised collect requests masquerading as fraudulent cashback offers and QR codes [2]. Reported UPI fraud cases surpassed 95,000 throughout fiscal year 2022–2023 - marking a rise from the 84,000 cases reported previously [3]. Additionally, identity-related frauds, specifically account-related frauds, are a prevalent issue [4].

Bank Frauds

The total bank frauds in India amounted to INR 3,500 cr in 2023, representing a significant decline compared to the INR 1.3 trillion documented in 2021 [5]. Though the number of fraudulent activities has decreased, the financial impact remains noteworthy. An estimated INR 4.69 lakh cr (Rs 4,690,000 million) was lost from Indian banks between 2014 and 2023 [7].

QR Code Scams

Bengaluru stands out for experiencing a rise in QR code-related cybercrimes. With over 163 instances recorded and a cumulative financial loss exceeding INR 5 cr, such scams pose a financial risk [8]. These scams occur when individuals receive misleading messages or calls purportedly from fake FedEx customer service executives, claiming parcels containing illegal items are being sent in their names [11].

Investment Scams

Financial scammers continue to take advantage of individuals’ aspirations for high returns. They use fictitious companies and fake investment products to attract victims. The Covid-19 outbreak triggered a wave of investment scams in India, disproportionately affecting the working class [9]. One notable high-profile case involved a Chinese investment fraud that allegedly siphoned off INR 712 cr (INR 7.12 billion) from Indian investors in 2023 [9].

Protecting Yourself Against Financial Frauds

To safeguard yourself against financial frauds, experts advise practicing vigilance and awareness [13]. Some steps to secure personal information include creating strong passwords and enabling two-factor authentication whenever possible. If you become a victim of cyber fraud, promptly contact your bank, file a complaint with relevant authorities, and closely monitor your accounts for unauthorized activity.

[1] Microsoft 2021 Global Tech Support Scam Research - https://www.microsoft.com/en-us/microsoft-security/advanced-threats/global-tech-support-scam-research [2] RBI’s Report on Frauds in the Banking Sector - April to June 2022 - https://rbi.org.in/scripts/AnnualPublications.aspx?head=Handbook&year=2022 [3] Ministry of Finance – Depositor Education and Protection Fund - https://mof.gov.in/depf [4] “Report: Digital Payment Frauds in India”, FISME - https://www.fisme.in/Report-Digital-Payment-Frauds-in-India [5] RBI, Report on Trend and Progress of Banking in India 2022-2023 - https://rbi.org.in/scripts/AnnualPublications.aspx?head=Handbook&year=2023 [6] “Frauds and Scams in India”, Statista - https://www.statista.com/topics/1025/fraud-and-scams-in-india/ [7] Reserve Bank of India (RBI), Press Release – Frauds in the Banking System - https://rbi.org.in/scripts/AnnualPublications.aspx?head=Handbook&year=2015 [8] Bengaluru Cyber Crime Police, Cyber Fraud Reports - http://cybercrime.bmt.gov.in/cybercrime_reports.aspx [9] The Times of India, INR 712 cr Chinese investment fraud exposed in Hyderabad - https://timesofindia.indiatimes.com/city/hyderabad/inr-712-cr-chinese-investment-fraud-exposed-in-hyderabad/articleshow/99157130.cms?from=mdr [10] Business Today, Cybercrime on the rise; over 467 complaints about internet fraudsters advertising part-time jobs - https://www.businesstoday.in/current/latest-news/cybercrime-on-the-rise-over-467-complaints-about-internet-fraudsters-advertising-part-time-jobs/articleshow/94259891.cms [11] Deccan Herald, New courier scam targeting Bengaluru youth gets police warning - https://www.deccanherald.com/city/bengaluru-urban/new-courier-scam-targeting-bengaluru-youth-gets-police-warning-932274.html [12] Moneycontrol, Economic crimes on digital platforms account for 57% of fraud incidents in India - https://moneycontrol.com/news/business/economy/economic-crises-on-digital-platforms-account-for-57-of-fraud-incidents-in-india-8260691.html [13] Economic Times, How to Protect Yourself Against Digital Transactions Fraud - https://economictimes.indiatimes.com/business/consumer/how-to-protect-yourself-against-digital-transactions-fraud/articleshow/68285531.cms?from=mdr