Alert – Rupees 12 Lac Crore lost in online frauds annually

The volume of online fraud in India is significant and has been growing rapidly in recent years, in 2022, the Indian Computer Emergency Response Team (CERT-In) reported over 15 Lac cybersecurity incidents in the country, a large portion of which were related to online fraud. The total value of online financial frauds in India had reached over 12 Lac Crore annually which is approx. 1/4th of the GDP of the country. The Reserve Bank of India reported that the total number of fraud cases reported by banks had increased by over 28% in 2021-2022 compared to the previous year.

Common types of online fraud in India include phishing scams, UPI-based payment frauds, investment scams, e-commerce frauds, and banking/credit card frauds. Certain sectors like e-commerce, digital payments, and fintech have seen particularly high levels of fraud as they have experienced explosive growth in recent years.

Demographic factors like the rapid expansion of internet access and digital financial services to remote and rural areas have also contributed to the rise in online fraud incidents. Experts estimate that the actual volume of online fraud in India is likely much higher than reported, as many cases go unreported or undetected.

India's rapid digitization and expansion of internet access, digital payments, e-commerce, and other online services have created more opportunities for cyber fraud. Sophisticated cyber-criminal groups have been increasingly targeting Indian consumers and businesses through phishing, malware, and other attack vectors.

There are a few key reasons why it can be difficult to trace online fraud:

Anonymity: Fraudsters often use fake identities, anonymous email accounts, and other techniques to hide their true identity online which makes it challenging to link the fraud back to the perpetrator.

Jurisdictional issues: Online fraud can involve perpetrators and victims located in different countries or regions which can complicate the investigation and prosecution process, as different legal systems and law enforcement agencies have to coordinate.

Technical complexity: Modern fraud schemes often involve sophisticated techniques like hacking, malware, and exploiting vulnerabilities in online systems. Tracing the technical trail of evidence can be very complex, requiring specialized cybersecurity expertise.

Scale and speed: The internet allows fraudsters to perpetrate scams on a massive scale and at a rapid pace. The high volume and quick pace make it harder for law enforcement to keep up and trace individual incidents.

Evolving tactics: Fraudsters are constantly developing new tactics to stay ahead of detection and tracing methods. By the time a particular fraud scheme is uncovered, the perpetrators may have already moved on to a new approach.

Overall, the borderless, anonymous, and technologically advanced nature of the internet provides many advantages for fraudsters to cover their tracks, making online fraud a challenging crime to trace and investigate effectively.

Law enforcement has developed a number of effective strategies to try to trace and investigate online fraud, including:

Cooperation and information sharing: Collaborating with international law enforcement agencies to share intelligence and coordinate cross-border investigations. Working with financial institutions, internet service providers, and tech companies to obtain relevant transaction data and user information.

Digital forensics: Analysing server logs, email headers, IP addresses, and other technical evidence to try to identify the origin of fraudulent activity. Using specialized digital forensics tools to extract and analyse data from seized devices, online accounts, and malware.

Undercover operations: Setting up sting operations to lure in and apprehend suspected fraudsters. Infiltrating online fraud rings and networks to gather intelligence from the inside.

Victim outreach and data collection: Encouraging victims to report incidents to help build a comprehensive picture of fraud trends and patterns. Collecting detailed information from victims about the methods, platforms, and communication used by the perpetrators.

Regulatory and policy efforts: Indian regulation and policy regarding Cyber Crime required complete reworking, the need is for pushing for tighter regulations around online identity verification, financial transactions, and data security. It is very easy to get a SIM Card and open a Bank account, two main access needed for online frauds and when the culprit is nabbed he gets bail-out and rarely any recovery is resulted, or in best case he leaves country. Advocating for legislative changes to improve the legal tools available for investigating and prosecuting online fraud.

Public awareness and education: Launching public campaigns to inform citizens about common fraud schemes and how to protect themselves. Working with private industry to develop best practices and technology solutions to detect and prevent online fraud.

While online fraud remains a significant challenge, these types of multi-faceted strategies are helping law enforcement make progress in tracing and disrupting fraudulent activities. Continued innovation and international cooperation are crucial to staying ahead of increasingly sophisticated cybercriminals.