Since 2020, Indians have lost Rs 14,600 crore (roughly 11% of this was salvaged) to online financial fraud, according to a recent affidavit filed by the Ministry of Home Affairs in the Delhi High Court. This figure highlights the scale and sophistication of online fraud, and underscores the growing vulnerability of the country’s digital ecosystem to financial cybercrime. And this figure is only based upon the reported cases: there are many people who fall into the trap of cybercrime cases but never report it, often because they are unaware about the process or are afraid to do so.
Cybercrime On The Rise
The affidavit sheds light on the alarming rise in cybercrime, particularly online financial fraud, which constitutes nearly 84% of the total cybercrime complaints reported on the National Cyber Crime Reporting Portal (NCRP). Between August 2019 and March 2024, over 38.85 lakh complaints were reported, spanning various forms of online fraud, including phishing attacks, fake investment platforms, cryptocurrency fraud, and unauthorised financial transactions.
One of the critical elements contributing to this surge is the rapid digital transformation India has undergone in recent years. With widespread access to the internet and a thriving digital payment ecosystem, cybercriminals have exploited gaps in security measures and the public’s limited awareness of cyber threats.
The Modus Operandi Of Cyber Scams
Cybercriminals typically target individuals through sophisticated techniques. Many scams begin with phishing attempts or fraudulent investment offers through social media, emails, or fake websites. Victims are lured with promises of high returns, often leading to significant initial investments. Once trust is established, scammers either engineer sudden losses or freeze the victim’s accounts, demanding further payments to release the funds.
The affidavit also reveals how cryptocurrency has become a popular avenue for money laundering and illicit activities. Peer-to-peer (P2P) cryptocurrency exchanges, which allow transactions without verifying the identity of the parties involved, have been used to move funds generated through and meant for illegal activities, including terrorism and drug trafficking. The Ministry of Home Affairs has flagged these transactions as posing a major risk to the country’s financial security.
Indian Cyber Crime Coordination Centre’s Role
The Ministry of Home Affairs set up the Indian Cyber Crime Coordination Centre (I4C) to combat cybercrime in a coordinated and comprehensive manner. One of the centre’s major initiatives is the ‘Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS)’, which facilitates quick reporting and immediate action to freeze funds siphoned off by fraudsters. Their toll-free helpline (1930) allows victims to lodge complaints and take swift action to block transactions before the money disappears.
The affidavit reveals that the CFCFRMS managed to prevent the flow of Rs 1,605 crore — out of the total Rs 14,600 crore. Even so, the amount of funds siphoned off reflects that cyber fraud remains an enormous challenge for law enforcement agencies.
A National And International Threat
The affidavit notes that many of these fraudulent activities are not isolated incidents but part of larger international networks, with criminals operating across borders. This international dimension makes it even harder for Indian law enforcement agencies to track and prosecute offenders, as many cybercrime operations are coordinated from foreign jurisdictions.
In response, the Ministry of Home Affairs has been working closely with state and Union territory law enforcement agencies to enhance their capacity to deal with such complex cybercrimes. The ministry has also been instrumental in issuing guidelines for financial institutions and online platforms to strengthen Know Your Customer (KYC) procedures and ensure compliance with anti-money-laundering regulations.
Protecting Yourself Against Cyber Fraud
With the scale of cybercrime growing every day, it is crucial for individuals and businesses to take necessary precautions. Basic steps such as verifying the authenticity of investment platforms, avoiding unsolicited communication with unknown entities, and using secure online transaction methods can go a long way in preventing cyber fraud.
Additionally, victims of online fraud should act quickly by reporting any such incident to the NCRP, using the 1930 helpline, and contacting their bank or financial institution immediately to freeze the fraudulent transactions.
The Legal Recourse for Victims
Victims of cyber fraud can also explore legal recourse to recover their lost funds. Filing a complaint with the cybercrime police, alongside civil actions under the Consumer Protection Act and legal notices to banks and financial intermediaries, can help in retrieving the money. Given the international dimension of many cyber scams, legal experts say citizens can move court if they don't find resolution with police, and seek the involvement of agencies like the Enforcement Directorate (ED), so the Prevention of Money Laundering Act (PMLA) can be invoked and international cooperation sought if necessary.
The staggering scale of cyber scams is a wake-up call for both individuals and institutions in India. As cybercrime continues to evolve in scale and complexity, it is vital for the government, law enforcement agencies, and citizens to work together in safeguarding India’s digital future. The affidavit filed in the Delhi High Court not only highlights the urgent need for greater awareness and vigilance but also points to the importance of stronger cybersecurity measures and legal frameworks to tackle this growing menace.
India must strengthen its cyber defences to protect its citizens and economy from the devastating impact of these scams.
The writer is an advocate at the Supreme Court of India.
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