Financial Crime World

Financial Crime Wave: A Closer Look at the Top Financial Scams Sweeping India in 2023

The Reserve Bank of India (RBI) reported a significant decrease in bank frauds in the fiscal year 2023, with a total value of INR 30,250 crore, marking a decrease from the massive INR 1.3 trillion rupees reported in 2021 [1]. However, with online fraud on the rise, Indian citizens must remain vigilant and protect their financial interests as the financial crime landscape continues to evolve.

Rise of Online Frauds

India accounted for a striking 69% of all online fraud cases among consumers in 2021, despite the RBI’s data likely excluding numerous undetected frauds [2]. The financial sector in India has faced a surge of sophisticated scams in 2023, with fraudsters exploiting evolving technologies and taking advantage of unsuspecting individuals.

UPI Frauds

With the rise of UPI transactions, UPI-related frauds pose a significant threat to the Indian payment ecosystem. Criminals use tactics such as disguised collect requests, spoofed VPAs, and fake refunds to lure unsuspecting consumers [3]. Reported UPI fraud cases exceeded 95,000 in the fiscal year 2022-2023, representing a 10,000 increase from the previous fiscal year [3]. Additionally, 55% of all digital payment frauds in India are linked to UPI transactions.

Digital Banking and Credit Card Frauds

As digital transactions grow in popularity, criminal activities targeting digital banking and credit card fraud have also surged [4]. Common tactics include phishing attacks, identity theft, and fraudulent transactions using stolen card details. In the fiscal year 2023, the banking system recorded a total of 13,530 fraud cases, with nearly half of these cases (6,659) falling under the digital payment – card/internet – category[4].

Bank Frauds: An Overview

Bank frauds consist of a range of deceitful activities, including loan frauds, cheque frauds, forged documents, and unauthorized transactions [5]. In the year 2023, the Reserve Bank of India documented bank frauds worth INR 3,500 crore, down from the INR 1.3 trillion rupees reported in 2021. Between June 1, 2014, and March 31, 2023, Indian banks reported a total of approximately 65,017 fraud cases, resulting in a substantial financial loss of Rs 4.69 lakh crore [7].

Emerging Threats: QR Code Scams and Investment Scams

QR Code Scams

QR code scams are another emerging threat [6]. Fraudsters employ deceptive tactics to lure victims into scanning fraudulent QR codes and directly steal funds from their bank accounts. Bengaluru, in particular, has experienced a significant increase in QR code-related cybercrime cases.

Investment Scams

Investment scams continue to allure individuals with tempting promises of quick and guaranteed returns [9]. These fraudulent schemes often involve fake companies or fictitious investment products. Since the onset of the Covid-19 pandemic, scams related to stocks, personal loans, cryptocurrencies, and various other investment avenues have seen a surge, especially impacting the working class in India.

Part-time Job Scams

Online scammers deceptively use direct messages and social media feeds to lure individuals into investing money for part-time jobs [11]. According to a report from the Delhi police, there was a worrying surge of 467 complaints about internet fraudsters advertising part-time work as of April 30, 2023.

Courier Scams

A concerning new trend of courier scams targeting young individuals is on the rise, causing distress and worry [11]. Fraudsters reach out to victims, claiming that a courier parcel containing drugs or illegal items is being sent in their names to foreign countries. Bengaluru authorities recorded 163 instances of courier scams in 2023, resulting in a cumulative financial loss exceeding INR 5 crore.

Protecting Yourself from Financial Frauds

  1. Educate Yourself: Stay informed about common scams and fraud tactics through government agencies and financial institutions [13].
  2. Verify Identities: Be cautious when sharing personal or financial information. Verify the identity of anyone who asks for sensitive information [13].
  3. Strong Passwords: Use strong and unique passwords for your online accounts [13].
  4. Enable Two-Factor Authentication: Secure your online accounts with two-factor authentication whenever possible [13].
  5. Beware of Phishing Emails and Phone Calls: Be cautious when conducting financial transactions over public Wi-Fi networks, and never provide sensitive information to unsolicited callers [13].
  6. Protect Your Devices: Regularly update your computer, smartphone, and other devices with the latest security patches and antivirus software [13].
  7. Monitor Your Accounts: Regularly review your bank and credit card statements for unauthorized transactions [13].
  8. Research Investment Opportunities: Thoroughly research all investment opportunities and consider consulting with a financial advisor [13].
  9. Report Scams: Report any suspected financial scams to local police, the Cyber Crime Cell, and the Reserve Bank of India [13].
  10. Stay Informed: Stay up-to-date with the latest financial scams and fraud alerts through reliable news sources and consumer protection agencies [13].
  11. Seek Legal Advice: Consult with a legal professional or financial advisor if you believe you’ve been a victim of a financial scam [13].

If you find yourself in a cybercrime incident, promptly report it to your bank, the National Cyber Crime Reporting Portal, and your local police station [7]. Be sure to gather all relevant evidence to aid the investigation.