The Multifaceted Threat Of Fraud In India

India is no stranger to financial fraud. In the past, there have been many scams in India, including the Rs. 7000 crore Satyam Computer scam, in which the firm’s chairman confessed his fraud. Another great example is the infamous Harshad Mehta scam, a Rs. 5000 crore scam that resulted in the crash of the Indian stock exchange. Vijay Mallya is another famous scammer who has been the poster child for financial fraud in India. This paints a perfect picture that financial fraud is nothing new in India. However, now, people are using different ways to scam people and commit financial fraud. According to a Financial Stability report by the Reserve Bank Of India, the country saw a 65% increase in financial fraud between 2021 and 2023. Also, the total amount of bank fraud committed in 2023 alone accounts for a whopping Rs. 30,000 crore. However, most of the frauds that take place in India are digital. The report claimed that new technologies have made banking operations more efficient and effective. However, one side effect of this is that the number of cyberfrauds has increased exponentially.

The Indian Cybercrime Coordination Centre (I4C) mentioned in a report that digital financial frauds accounted for around Rs.1.25 lakh Crores in the last three years. 

Moreover, according to a report by the Parliamentary Standing Committee On Finance, India recorded around 6.94 lakh cases of digital financial fraud in 2023 alone. This number goes to prove that the advent of new technologies like Internet banking and, most importantly, Unified Payments Interface, or UPI, has enabled scammers to find new ways of committing digital fraud. 

Digital financial fraud can be done in various ways, but some fraudsters prefer certain methods. For instance, one method fraudsters usually use is that they try to convince the victim to send them money. This can come in various ways. The fraudster can make a fake Instagram or Facebook ID of somebody the victim knows and then message the victim to give them money. Another way is that they speak to the victim as a stranger and ask for money, citing their poor financial condition or a sudden medical emergency they need money for. The fraudsters might also tell their victims that the money they are paying is for investment, but in reality, they are being scammed. However, the most dangerous is a person asking for your UPI ID, Personal Identification Number (PIN), or any other personal detail. 

After scammers or fraudsters have the information, such as the victim’s UPI ID, PIN, or other identification details, they quickly empty the bank account. By the time the victim files for an FIR, the money is long gone, and the trail has also gone cold. This means there is no way to identify the person or recover the money. 

Now, the question is, how can we put an end to these scams and financial frauds? The first thing to remember is that one should never disclose his/her personal details to anyone online or on a call. Also, government officials never call you and ask for any personal information. However, if the victim has already shared his/her details, the most important thing is to visit your nearest precinct and file a complaint. The police will be able to comprehend the culprit as soon as you file a complain. Due to embarrassment, trauma, or fear, many people never tell anyone that they have been scammed, which motivates these scammers and financial fraudsters. 

Police and officials must first know the location of these fraudsters in order to apprehend them. Rajesh Kumar, CEO of I4C, also mentioned that most of the applications used in these frauds are written in Mandarin, so there is a chance that these scams and frauds have Chinese links. , According to him, Indians have lost around Rs. 7,061 crore in the last few months. He further added, “Out of which we have been able to put a lien on around 12 per cent, which is about Rs 812.72 crore.” 

Although India has one of the best technical infrastructures in the world, the knowledge to leverage this infrastructure is lacking, mostly among the people who need it the most, like farmers, manual labourers, and many other working-class people. However, the Indian government is doing everything possible to apprehend these fraudsters. In a time period from July 2023 to April 2024, authorities have frozen 325,000 mule accounts and blocked more than 3000 URLs and 395 apps under section 69A of the IT Act. Moreover, the authorities have suspended 530,000 SIM cards and 80,848 IMEI numbers.

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