India’s embrace of digital banking and UPI have made it a leader of technologically-enabled financial inclusion. However, fraudsters have also seized it as an opportunity to steal from unsuspecting users and carry our sophisticated scams. This has left law enforcement agencies struggling to keep up with the rising number of crimes, and regulators rushing to improve financial literacy. Please listen to the latest episode of All Indians Matter.
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[00:00:01] Hello and welcome to all Indians Matter, I am Ashraf Engineer.
[00:00:05] Imagine this, an unsuspecting not very digitally literate person gets a phone call amid his
[00:00:10] very busy day.
[00:00:11] His phone rings and the call says he is from their mobile network provider.
[00:00:15] He says the user hasn't provided adequate documentation and the SIM card will be blocked
[00:00:19] immediately.
[00:00:21] The alarm user hands over personal data like the Adhar and Pan.
[00:00:24] As later his bank account has been emptied and credit card maxed out.
[00:00:29] Seems familiar doesn't it?
[00:00:30] All of us have received such calls and hopefully most of us would have disregarded them,
[00:00:35] but there are many among us who don't.
[00:00:37] So many Indians are using smartphones and digital banking or payment platforms for the first
[00:00:42] time and they often fall prey to such digital crimes.
[00:00:45] The number of such cases is rising tremendously.
[00:00:48] Between January and April 2024 Indians are estimated to have lost more than 1,750 crore
[00:00:55] rupees to digital crime.
[00:00:57] This led to more than 7.4 lakh complaints lodged on the National Cybercrime Reporting
[00:01:01] Portal managed by the Ministry of Home Affairs.
[00:01:04] The Indian cybercrime coordination centre or IFC has stated that in May 2024 an average
[00:01:09] of 7,000 cybercrime complaints were filed every day.
[00:01:14] India's embrace of a digital way of life including banking and the unified payments interface
[00:01:18] or UPI have firmly placed it in the lead back of technology enabled financial inclusion
[00:01:23] wealth.
[00:01:23] But it has also left low enforcement agencies struggling to keep up with rising number
[00:01:28] of crimes and regulators rushing to improve financial literacy.
[00:01:35] All Indians matter.
[00:01:41] In May 2024 alone UPI crossed 14.04 billion transactions with a total value of Rs 20.45
[00:01:48] lakh crore rupees.
[00:01:50] We have cheap internet access and greater financial inclusion to thank for it.
[00:01:54] Providing the sobering note was a Bloomberg report based on his bank of India or RBID
[00:01:58] sector that said digital payment frauds saw a more than 5 full jump in the year ended March
[00:02:04] 2024.
[00:02:05] Digital payments including cards and internet transactions comprised 10.4% of the total
[00:02:10] fraud amount.
[00:02:11] That's up from 1.1% in fiscal 2023.
[00:02:15] Make no mistake about it, UPI is a game changer and a much needed technology.
[00:02:19] Since this launch in 2016, it has transformed India's payments landscape.
[00:02:24] The pace of its adoption has been staggering.
[00:02:26] One indicator of its effectiveness and popularity is that a significant share of the peer
[00:02:31] to merchants and peer-to-peer transactions rooted through it are of less than Rs 2000.
[00:02:36] However, accompanying this popularity is a sharp rise in fraud.
[00:02:40] A last section of the population is vulnerable due to a combination of financial literacy
[00:02:44] and the careless use of technology.
[00:02:46] Frosters mean why are getting more and more sophisticated even as financial institutions
[00:02:51] lose in controls in the battle for market share.
[00:02:53] I foresee data on the rising number of cases is telling in 2019, 20.649.
[00:03:00] In 2020, 2 lakh 57777.
[00:03:04] In 2021, 4 lakh 52.414.
[00:03:09] In 2022, 9 lakh 66,790.
[00:03:13] In 2023, 15 lakh 56,218.
[00:03:17] In the first four months of 2024, 7 lakh 4957.
[00:03:22] This forced the government to think of introducing a minimum time threshold for first-time transactions
[00:03:27] between 2 individuals beyond the prescribed amount.
[00:03:30] This would mean a 4-hour window for transactions above Rs 2000.
[00:03:34] However, this could lead to disruptions because national payments cooperation of India showed
[00:03:38] that in October 2023, 22.5% of peer-to-peer transactions were above Rs 2000.
[00:03:44] Despite this, some government officials thought the move would be warranted if implemented.
[00:03:49] This is because Frosters employ a range of techniques from fishing and mal way to
[00:03:53] same-cloning.
[00:03:54] Other techniques include QR codes, camps and couriers, camps in which people are told
[00:03:58] drugs have been found in their consignments.
[00:04:01] Even with UPI, Frosters quickly devised ways to exploit consumers.
[00:04:05] The tactics range from fraudulent cash back offers to QR codes and
[00:04:09] spoofed virtual payment addresses for refunds and disaster support.
[00:04:13] In 2023, UPI fraud cases exceeded 95,000 up from 84,000 in 2021, 22 according to
[00:04:20] Ministry of Finance data.
[00:04:22] Such frauds are a major threat to our payments ecosystem.
[00:04:26] Frosters even create fake websites,
[00:04:28] you are in people to invest in stocks or cryptocurrency.
[00:04:31] Groups on messages such as Telegram and WhatsApp,
[00:04:34] mass-invite consumers to make dodgy investments.
[00:04:36] Other tactics include fake customer support, cash back links
[00:04:39] or emails are installed malware, screen-mittering or remote access apps.
[00:04:44] These applications enable unauthorized access to financial information.
[00:04:48] India of course is not the only country witnessing a surge in digital fraud.
[00:04:52] A report by transmemines said that across the world, 4.6% of all digital transactions
[00:04:57] are thought to be fraudulent.
[00:04:59] The problem is complex and therefore needs a multilayer response.
[00:05:02] Players in the Payments ecosystem must regularly update the IT infrastructure and protocols
[00:05:07] to plug gaps and minimize vulnerabilities.
[00:05:10] Raising consumer awareness is critical and must include education about new methods of frauds.
[00:05:14] The awareness drives must focus in particular on senior citizens and the rural populace.
[00:05:19] The RBI alarmed at the situation and now is dedicated platform to a
[00:05:23] residential payment frauds.
[00:05:25] The platform will enable network-level intelligence and real-time data sharing across
[00:05:29] the digital payments ecosystem.
[00:05:31] The RBI has also launched Omnichun public awareness campaigns
[00:05:34] and is delivering digital finance training.
[00:05:37] Here's how you can protect yourself from financial fraud.
[00:05:40] Become more aware, stay informed about scams and fraud tactics.
[00:05:43] The government and financial institutions regularly provide information about them.
[00:05:47] Do not indiscriminately share personal financial information.
[00:05:50] Verify the identity of anyone who asks for it.
[00:05:53] Your bank and other genuine organizations will never ask for your password up in.
[00:05:58] While on the subject, create strong and unique passwords for your accounts.
[00:06:01] Avoid easily guessable passwords like bird days.
[00:06:04] Enable to factor authentication for an extra layer of security.
[00:06:08] Ignore suspicious emails asking for personal or financial information.
[00:06:12] Beware of callers claiming to be from banks or government agencies do not provide sensitive
[00:06:16] information to them.
[00:06:18] Use up-to-date security software near devices and avoid financial transactions on public
[00:06:22] Wi-Fi networks.
[00:06:23] Check your bank statements regularly for suspicious activity.
[00:06:27] While there are regulatory systems in place, there is no substitute for an
[00:06:30] aware and vigilant consumer.
[00:06:33] Financial literacy is the key to protecting yourself so make sure you are doing the needful.
[00:06:37] There can be no better investment of time and effort.