The Indian Cybercrime Coordination Centre reported that digital financial frauds cost ₹1.25 lakh crore in the past three years.
India’s digital financial scams: Cybercrime is a growing issue in India, affecting millions of people and institutions. The National Crime Records Bureau (NCRB) reported 4,850 cybercrime instances in 2023, resulting in a stunning loss of ₹66.66 crore. The Indian Cybercrime Coordination Centre (I4C) said that digital financial scams totaled ₹1.25 lakh crore in the last three years. The National Cybercrime Reporting Portal (NCRP) reports that victims of digital financial theft lost at least ₹10,319 crore by 2023. According to the Legislative Standing Committee on financing’s report on “cyber security and rising cases of cyber/white collar crimes,” national fraud reported by SEs in FY’23 was ₹2537.35.The report states that there were 6.94 lakh complaints received in 2023 alone.
Some of the issues encountered during investigations are discussed here, along with remedies for both the prevention and detection of online financial fraud.
According to a recent poll, scammers are increasingly targeting Indian families in order to extort or steal money online. Concerningly, only a small number of the misled families were able to reclaim their money.
What does the RBI have to say about digital financial fraud?
The Reserve Bank of India has observed Financial Literacy Week every year since 2016. The Financial Literacy Week is marked with the goal of educating the general public about finances in our country. Last year (2022), it was observed from February 14th to February 18th, with the main motto “Go Digital, Go Secure“. Last year’s financial literacy weakness emphasized the importance of raising financial awareness about the simplicity and security of digital transactions, as well as their protection. The country’s highest bank advised all other banks to spread information and raise public awareness. The RBI has planned a larger-scale media effort to raise fundamental financial awareness among the general public. This campaign teaches us the value of financial literacy.
As the current administration focuses on development through digitalisation, financial transaction literacy becomes increasingly important. The general population may not engage in a large number of transactions at any given time during the day, but the transactions together result in a significant quantity. As a result, understanding each and every tiny transaction, as well as the crimes associated with those transactions, becomes increasingly vital for mitigating and preventing such fraud. In this regard, this article seeks to collaborate with the RBI to educate the public on frauds and their mitigation.
Financial literacy implies having the ability to manage one’s money wisely. Financial literacy attempts to teach basic numeracy skills related to responsible money spending and saving.
A 2004 study conducted by the Australian Commonwealth Bank found that persons of different demographics have different levels of financial abilities and awareness. It also revealed that 10% of the surveyed population had the lowest financial literacy, which included young people, men, students, those who were less educated, unemployed, and from lower-income families. The study also found that elderly people had inferior financial skills.
Financially uneducated persons also struggle to pay their bills, such as credit cards and phone bills.
Fraud can take the form of making false promises, concealing facts, or providing insider trade information. as things were done manually, the victim would at least know where the crime was committed, making it easier to locate the fraudster as compared to internet crimes. Online scammers can simply hide behind a screen. In such a case, being aware of the frauds will keep people from being easily duped. The Reserve Bank of India showed that Indian banks underreport fraud. The RBI further showed that 90.6 percent of scams detected in 2018-2019 occurred between the years 2000 and 2018. Nearly 40% of underreported scams happened between 2013 and 2016, according to the banking regulator’s most recent Financial Stability Report. The regulatory bank emphasized that there is a large time lag between fraud occurrence and discovery.
