Financial Crime World

Title: “Indian Cybercrime Soars: ₹1.51 Lakh Crore Lost to Digital Financial Frauds in Last Three Years”

Cybercrime

Key Findings

  • ₹1.51 lakh crore lost to digital financial frauds in India over the last three years
  • 4,850 cybercrime cases in India in 2023 resulted in a loss of ₹66.66 crore
  • Domestic fraud reached ₹2,537.35 crore in FY'23 with 6.94 lakh complaints

Report Details

The Indian Cybercrime Coordination Centre (I4C) and the National Crime Records Bureau (NCRB) have reported an alarming increase in digital financial frauds in India. The losses amounted to ₹1.51 lakh crore over the last three years. The numbers of reported cases and losses are increasing each year, highlighting the need for preventative and detective measures.

NCRB Statistics

  • 4,850 cybercrime cases in India in 2023 resulted in a loss of ₹66.66 crore
  • Out of these cases, 1,612 were related to financial frauds

Parliamentary Standing Committee on Finance Estimate

  • Domestic fraud reached ₹2,537.35 crore in FY'23
  • A total of 6.94 lakh complaints were recorded

Digital Financial Frauds Schemes

Digital financial frauds follow three primary schemes.

Impersonation

Scammers impersonate individuals or organizations to trick victims into sending money. They often use fake social media profiles or phishing emails.

Credentials Theft

Scammers steal credentials such as Unified Payments Interface ID (UPI), Personal Identification Number (PIN), One-Time Password (OTP), or Internet banking ID/password from unsuspecting victims.

Card Details and OTP Sharing

Scammers convince victims to share their card details and OTP after which they transfer the funds through various stages of accounts before withdrawing it in large amounts from a sink account.

Prevention Measures

To prevent digital financial frauds, stakeholders can take the following steps.

  1. Two-Factor or Multi-Factor Authentication: Implementing two-factor or multi-factor authentication for financial transactions can help enhance security.
  2. Device Alerts: Financial institutions should alert their customers when a transaction is initiated from a new device.
  3. Disabling Screen-Sharing: Disabling screen-sharing in banking and financial apps is necessary to prevent unauthorized access.
  4. Comprehensive Data: Comprehensive data must be provided in bank statements for both victims and investigative agencies.

Challenges and Solutions

One of the primary challenges faced by law enforcement agencies is tracing the money trail. By mandating financial institutions to provide data in a usable format and recording the International Mobile Equipment Identity (IMEI) for all financial transactions, it will become easier to identify and convict digital financial fraud networks.

Stakeholder Responsibility

Now is the time for all stakeholders – including the fintech and telecom industries, financial institutions, and law enforcement agencies – to take a proactive approach to prevention, detection, and conviction. With the new law Bharatiya Nagarik Suraksha Sanhita 2023, which will replace the Indian Penal Code of 1861, organized crime is recognized as a serious offense. Interstate digital financial fraud networks should be treated as such, and bail should be restricted to deter future criminal activities.