What is digital house arrest?
It is a tactic cybercriminals use to confine victims to their homes and scam them, explains Tamal Bandyopadhyay.
#Krishna Dasgupta, 72, a resident of Delhi's CR Park, recently lost Rs 83 lakh after she was put under 'digital arrest' for over 12 hours one day.
What is digital house arrest?
It is a tactic cybercriminals use to confine victims to their homes and scam them.
They create fear by making audio or video calls, posing as law enforcement officers. This is done using AI-generated voices or video technology.
It started with a phone call informing Dasgupta that her mobile number would soon be blocked.
She couldn't allow this to happen as she lives alone in Delhi and needs to talk to her Mumbai-based daughter and son-in-law often.
When she called the caller back, Dasgupta was told that her phone number was being used by another person who had been under the police scanner for using abusive language and pornographic photographs.
After she shared her Aadhaar card details, she was informed that she was involved in a money laundering case and would be arrested within two hours.
A young, handsome man in a police uniform asked her how much money she had in her bank accounts.
Under a hypnotic spell, she ran from one bank to another throughout the day until she transferred all her savings to a particular account through RTGS.
She came out of the spell the next morning when her daughter and son-in-law told her she had become a victim of fraud.
#In the first week of July, a 23-year-old man in Hyderabad fell for a parcel scam and ended up losing Rs12 lakh.
The victim received a call from a person claiming to be from FedEx and was told that his Aadhaar number was being misused.
What's the modus operandi of a parcel scam?
Here, the fraud begins with a phone call from someone typically claiming to be from FedEx customer service.
The caller informs the victim that a package linked to his/her Aadhaar number has been intercepted because it allegedly contains illegal items.
The victim is not aware of such a package, but the scammer will insist it was dispatched from Mumbai and is now stuck in customs due to the discovery of narcotics among the items.
At the next stage, the scammer will threaten that the call will be transferred to the Mumbai Police Cyber Cell.
Indeed, the victim will receive a call, supposedly from a police officer, threatening possible arrest.
A private bank's recent advisory to its customers says, 'The scammers use psychological tactics during calls to threaten the victim and obtain personal identification and bank details.
'They ask the victim to give his/her Aadhaar and other identification details apart from bank information...'
Is an FIR staring at the victim?
Will there be an arrest?
How does one get out of money laundering accusations?
The scared victim swiftly transfers money to avoid all these.
Media reports suggest that in the past year, scam victims have lost crores of rupees in the name of courier companies like FedEx, DHL, Blue Dart, DTDC and others.
#In mid-June, Venkatesh (name changed) received a message on WhatsApp from his friend who lives in the US.
The moment his friend's photograph flashed on his phone, Venkatesh was excited since he had not heard from him in ages.
His friend had just landed in Delhi and learnt that his daughter had broken her leg and was in a hospital.
He needed some money urgently. Without batting an eyelid, Venkatesh transferred Rs 80,000 to the bank account his friend mentioned to him.
This happened in the morning. Hours later, in the afternoon, Venkatesh called his friend to check how his daughter was. His friend took time to answere the call.
From his voice, Venkatesh could tell that he had been sleeping. That was indeed the case as it was well past midnight in San Francisco, where his friend lives.
No, he hadn't come to India. Neither had he asked for the money.
The fraudster chatted with Venkatesh, using his friend's photo on his profile, which he had picked up from a social media account.
These are some of the recent instances of fraud plaguing the Indian banking industry.
Until recently, fraudsters used to send SMS messages relating to 5G upgrades, SIM blocks, pending KYC, or document verification. And, of course, there were calls, posing as bank officials.
The Netflix series on Jamtara, based on true events around the phishing scams that take place in the city of Jharkhand, has featured this well, albeit with exaggeration to create the drama.
The Reserve Bank of India's FY24 annual report says an assessment of bank group-wise fraud cases of the last three years indicated that while private sector banks reported the maximum number of frauds, the amount defrauded was higher for public sector banks (PSBs).
In FY24, for instance, PSBs reported 7,472 incidents of fraud, less than one-third reported by private banks (24,210), but the money involved was three times more (Rs 10,507 crore versus Rs 3,170 crore).
Overall, 36,075 cases of fraud were reported in FY24 involving Rs 13,930 crore.
In FY23, there were 13,564 fraud cases and the money involved stood at Rs 26,217 crore; the comparable figures for FY22 were 9,046 cases with Rs 45,358 crore defrauded.
I am not delving deeper into the fraud figures beyond FY22 as they keep changing since banks continuously revise them.
For instance, the RBI FY23 annual report had pegged that year's number of fraud cases at 13,553 (close to what the latest annual report mentions), but the amount mentioned was much higher -- Rs30,252 crore.
Also, frauds reported in a year may have occurred several years back.
All RBI fraud data is for scams of at least Rs 1 lakh reported during the year. The reported amount does not reflect the loss incurred by the banks or the customers. The actual loss would depend on the recovery.
The RBI launched the Central Fraud Registry (CFR), a Web-based online searchable database, in January 2016. The usage of CFR by the banks, especially PSBs, has taken time to pick up.
The FY18 RBI annual report had pointed out that the number of fraud cases reported by banks had been around 4,500 in the past 10 years before rising to 5,835 in FY18.
The money involved also witnessed a quantum jump in FY18, thanks to fugitive diamantaire Nirav Modi syphoning off Rs 14,000 crore from Punjab National Bank, using the so-called letters of undertaking.
Another interesting feature has been that, in terms of value, the frauds are reported primarily in the loan portfolio, but when it comes to numbers, digital frauds are far more prevalent than loan frauds.
While PSBs are primarily at the receiving end of loan frauds, digital frauds mostly happen on the private bank turf.
The trend started in FY20 when, for the last time, the loan portfolio of the banking industry saw more frauds, both in terms of number and value.
The phenomenal progress in digital banking, particularly in the payments space, changed the fraud landscape FY21 onwards, when incidents of digital frauds (relating to the use of cards, the Internet, and everything else) overtook loan frauds.
Since the bad loan crisis of the last decade, banks have improved their credit appraisal, underwriting, and risk management. This will contain loan frauds.
Digital frauds are a different game altogether. Customer education is the key to combating this.
As I write this column over the weekend, my mobile phone flashes an SMS, which I reproduce here verbatim: 'India Post: Your package has arrived at the warehouse and we attempted delivery twice but were unable to do so due to incomplete address information.
'Please update your address details within 48 hours, otherwise your package will be returned.
'Please update your address in the link: https: xxx. After the update is complete, we will re-deliver within 24 hours, India Post!'
If I click it, I will not be in the mood to write my column next week. You know why.
Feature Presentation: Ashish Narsale/Rediff.com
