Financial Crime World

Wake-Up Call for Indian Consumers: Latest Financial Crime Trends and the Need for Vigilance

In the fiscal year 2023, Indian banks reported a decrease in bank frauds, with a documented excess of INR 30,000 cr [1]. While this is an improvement from the staggering INR 1.3 trillion rupees in 2021, Indian citizens must remain vigilant as they are still at risk of various financial scams.

Online Frauds: A Growing Concern

According to a recent Microsoft study [2], online fraud cases among Indian consumers accounted for 69% of the total fraud incidents in 2021. With the Reserve Bank of India (RBI) data reportedly excluding many undetected frauds, the total value of scams amounted to INR 60,414 cr [3] in the fiscal year 2021–22.

Prevalent Forms of Fraud in 2023

In the ever-evolving landscape of India’s financial sector, 2023 witnessed a significant spike in sophisticated scams. Some of the most common types of fraud in recent times include:

  1. UPI frauds: Accounting for 55% of all digital payment frauds in India [4], disguised collect requests as fraudulent cashback offers and fake QR codes are popular tactics used by fraudsters in UPI transactions [5].
  2. Digital banking and credit card frauds: Phishing attacks, identity theft, and fraudulent transactions are common techniques used by cyber criminals to pilfer funds [5].
  3. Bank frauds: Loan frauds, cheque frauds, and unauthorized transactions continue to contribute to significant financial losses for both financial institutions and individuals [6].

New and Emerging Scams

Some recent scams include:

  1. QR code scams: Cyber criminals masquerade as legitimate entities and steal funds directly from victims’ bank accounts [8]. Over 163 instances of QR code scams were recorded in Bengaluru alone, resulting in a financial loss of over INR 5 cr [11].
  2. Investment scams: Offering seemingly irresistible opportunities for high and quick returns, these scams have especially affected the working class in India during Covid-19 [9].

Protection against Financial Scams

Despite the various forms of financial scams, consumers can protect themselves by:

  1. Staying informed: Being aware of the latest scams and fraud trends.
  2. Being cautious: Refraining from clicking on suspicious links or downloading unverified attachments.
  3. Practicing good security habits: Utilizing two-factor authentication, securing Wi-Fi connections, and regularly checking bank statements.
  4. Reporting frauds: Immediate reporting to the appropriate authorities, such as financial institutions and law enforcement agencies, in case of fraud detection.

[1] The Hindu BusinessLine [2] Microsoft 2021 Global Tech Support Scam Research [3] Ministry of Finance, Press Release [4] Economic Times [5] RBI Annual Report [6] RBI Press Release [7] RBI Annual Report [8] Bengaluru Police Press Release [9] India Today [10] Delhi Police Report [11] Bengaluru Police Press Release [12] TCS Digital eXploratory Research Report

[Disclaimer: This article is for informational purposes only and not meant to convey legal, financial, or professional advice. It is strongly recommended that readers consult their financial advisors, attorneys, or relevant authorities for specific situations or concerns.]

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  • Online frauds among Indian consumers accounted for 69% of total fraud incidents in 2021
  • Total value of scams amounted to INR 60,414 cr in the fiscal year 2021-2022

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  • UPI frauds accounted for 55% of all digital payment frauds in India
  • Disguised collect requests as fraudulent cashback offers and fake QR codes are popular tactics

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  • Digital banking and credit card frauds are on the rise
  • Phishing attacks, identity theft, and fraudulent transactions are common

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  • Bank frauds contributed to significant financial losses for financial institutions and individuals
  • Various forms of deceitful activities, including loan frauds, cheque frauds, and unauthorized transactions

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  • QR code scams involve cyber criminals masquerading as legitimate entities to steal funds *Over 163 instances of QR code scams were recorded in Bengaluru alone, causing a loss of over INR 5 cr

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  • Investment scams have an increased presence during the Covid-19 pandemic
  • Offering seemingly irresistible opportunities for high and quick returns

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  • Consumers can protect themselves from financial scams
  • Stay informed, be cautious, practice good security habits, and report frauds to appropriate authorities