Financial Crime World

Rising Financial Scams in India: A Warning to Citizens Amidst a Surge in UPI Frauds, Cybercrimes, and Investment Scams

Despite a decrease in bank frauds documented by the Reserve Bank of India (RBI) in the fiscal year 2023, online fraud cases targeting Indian consumers increased significantly, resulting in significant financial losses.

Significant Increase in Online Fraud Cases

  • RBI reported a decrease in bank frauds from INR 1.3 trillion (1.3 lakh crore) in 2021 to INR 30,000 crore in 2023.
  • A Microsoft study revealed that 69% of online fraud cases targeted Indian consumers, resulting in damages valued at INR 60,414 crore.
  • Heightened awareness and caution are necessary when navigating financial transactions due to the rising number of financial scams in India.

Surge in Sophisticated Scams

  • UPI frauds, which increased dramatically, targeted unsuspecting victims through tactics like disguised collect requests and spoofed VPAs.
  • Online frauds, including investment in stocks or cryptocurrencies, became increasingly common.

UPI Frauds: Prevalence and Impact

  • Over 95,000 reported cases of UPI frauds in the fiscal year 2022-2023.
  • UPI frauds accounted for 55% of all digital payment frauds and had an average ticket size of less than INR 10,000.
  • Identity-related frauds, including account-related fraud, dominated various industries.
  • Financial services sector accounted for 65% of account-related frauds.

Financial Loss and Recovery

  • Over INR 200 crore lost due to various scams in 2023.
  • Disappointingly low recovery rate of cheated funds, with only 2% to 8% successfully recovered.

Other Types of Financial Scams

  • Bengaluru police recorded 163 instances of courier scams and a financial loss of over INR 5 crore in 2023.
  • Cybercrimes, like malware and tech support scams, became increasingly prevalent, targeting individuals’ devices and exploiting their financial information.

Protection Against Financial Scams

  • Educate oneself about common scams.
  • Verify identities before sharing sensitive information.
  • Use strong passwords.
  • Enable two-factor authentication.
  • Be cautious with emails.
  • Maintain secure smartphone and computer connections.
  • Check bank statements regularly.

Reporting and Recovery

  • Contact the bank if a scam is detected.
  • Lodge a complaint with the National Cyber Crime Reporting Portal.
  • Contact local law enforcement for assistance.
  • Provide relevant documentation for investigations.
  • Consult with legal advice when needed for effective recovery.