Author: Shambhavi Dubey, Ajeenkya D Y Patil University
Cyber fraud, often known as online fraud, refers to a variety of illegal actions that utilize the internet to deceive people into parting with money or personal data. Regretfully, in India, these crimes are increasing in frequency. Online fraud causes financial harm to both individuals and businesses, and it also erodes public trust in online commerce. From January 2020 to June 2023, 77.4% of cybercrimes were related to online financial fraud, according to a survey conducted by the Future Crime Research Foundation, a nonprofit organization housed at IIT Kanpur. According to the Reserve Bank of India, there was a notable surge in credit and debit card theft in 2022–23, amounting to Rs 276 crore, compared to Rs 119 crore in 2020–21 and Rs 155 crore in 2021–22. These numbers can possibly be underestimates of the actual scope of the issue.
This article examines the legal aspects of internet fraud in India, including the laws and rules designed to combat it, the difficulties in doing so, and recommendations for strengthening the legal system’s response to such crimes.
Types of Online Fraud in India
Cybercriminals employ an array of techniques to trick their targets. In India, a few of the most prevalent forms of internet fraud include:
Phishing Scams
Through emails, SMS, or phony websites, scammers pretend to be reputable companies like banks or e-commerce websites in an attempt to deceive victims into divulging personal or financial information.
A warning concerning bogus emails posing as the Indian Cyber Crime Coordination Centre (“I4C”) has even been issued by the Indian government. The purpose of these spoof emails is to trick recipients into thinking they are from a reliable organization that tracks cybercrime. Financial or personal data theft may result from this.
UPI Fraud
Scammers take advantage of the Unified Payments Interface’s (UPI) widespread use by tricking victims into divulging their UPI PINs or approving unlawful transactions
The UPI has been connected to over half of India’s cybercrime incidents since 2020. Particularly after the COVID-19 outbreak, when more people switched to digital transactions, there has been a noticeable rise in UPI-related fraud.
Scammers frequently coerce victims into downloading remote help apps, which give them access to their gadgets and bank accounts, or into providing their UPI PINs or OTPs.
Credit Card Fraud
Credit card credentials are stolen by fraudsters via phishing or skimming, and they are then used for unlawful online purchases.
Scams involving virtual credit cards are become more widespread; they prey on people by taking advantage of their digital banking activities.
In order to conduct illegal purchases, scammers frequently fabricate virtual credit cards or steal virtual card information.
In order to fool users into disclosing their virtual card information, they can also employ phishing techniques.
Fake Delivery OTP Scams
By posing as delivery businesses, criminals get One-Time Passwords (“OTPs”) under the pretence of finishing a delivery. They then use these OTPs to gain access to bank accounts.
Scammers pretending to be delivery agents from major online retailers like Amazon and Flipkart target Indian online consumers with fake OTP delivery scams, tricking victims into revealing OTPs in exchange for the ability to confirm or cancel deliveries.
Scammers can steal money by using the OTP to clone phones or access private information.
The Law’s Role in Fighting Online Fraud
India has a comprehensive legal response against online fraud that makes use of both old and new laws. The following are the main statutes:
The IT Act, or Information Technology Act of 2000,
This groundbreaking legislation is the cornerstone for India’s efforts to combat cybercrimes. It provides a foundation for the legal definition and criminalization of a number of online offenses related to fraud, such as:
Section 66: The offenses related to computers are covered in this section. This successfully targets internet scams that trick people by using forged papers or compromised digital signatures.
Sections 66A through 66F: These sections deal with the penalties for the following offenses: identity theft, sending offensive communications via communication services, cyberterrorism, privacy violations, identity theft, and personation fraud utilizing computer resources.
Section 71: The penalty for misrepresentation is covered in this section.
Section 72: Penalties for violating privacy and secrecy are covered in this section.
The penalty for issuing a fake electronic signature certificate is covered in Section 73.
Indian Penal Code (“IPC”): The Criminal Code of India, which was created long before the internet era, is nevertheless incredibly applicable when it comes to combating online fraud. A number of sections are applicable to cybercrime in an effective manner, including:
Section 419: This provision includes a broad definition of cheating, which includes a variety of internet fraud methods. For instance, phishing scams that trick victims into revealing personal information or investment fraud that promises unrealistic returns fall under the ambit of this section.
Section 420: “Dishonest inducement to deliver property” is the subject of this section. This is essential in a lot of internet frauds when victims are tricked into giving up money or goods by false promises or manipulative tactics.
Section 465: This provision on forgery applies when online fraud entails fabricating papers (such as faked invoices) or modifying electronic records (such as manipulating bank statements).
India’s Struggles in the War Against Internet Fraud
Despite the regulatory structure in place, combating online fraud in India is a hard process. Online fraud frequently crosses national borders, enabling perpetrators to operate from any location in the world. For Indian law enforcement officials, this presents serious obstacles in their efforts to find and apprehend these offenders. Cybercriminals are also always coming up with new strategies and taking use of new technology. Given how quickly things are changing, Indian law enforcement must keep up by constantly adapting and training. Finally, one of the biggest obstacles is that Indian internet users are not aware of the dangers that exist online. Because they are ignorant of the complex techniques used by con artists, many people become victims of scams. increasing public knowledge via extensive marketing and instructional programs.
Looking towards
India needs to take a proactive legal approach in its fight against internet fraud. The legislative framework has to change to properly address digital deceit, including phishing scams and UPI fraud.
However, issues still exist, such as the global reach of cybercrime and the persistent ingenuity of con artists. However, India can combat online fraud with tenacity and resilience by strengthening law enforcement capacities, encouraging international cooperation, and increasing public awareness.
What should you do if an internet scammer tricked you?
Here are the actions you should do to lessen the harm and stop more loss if you become a victim of one of these scams and lose money.
Put an end to communication: Initially, cut off all communication with the con artist. Ignore their messages, emails, and phone calls.
Notify Your Bank or Payment Service Provider: As soon as you decide to stop communicating, get in touch with your bank or the payment service provider (such as PayPal, Google Pay, or PayTM). Give a thorough explanation of the circumstances and ask them to block your account in order to stop any more unauthorized transactions. A 24-hour customer care number designated for reporting fraud is often available at most institutions. The sooner you report, the better your chances are of getting your money back.
Secure Your Accounts and Change Your Passwords: In the interim, make sure all of your internet accounts have new passwords, particularly those linked to financial services and banking. Make sure your passwords are strong and distinct by combining special characters, numbers, and letters. When it’s feasible, turn on two-factor authentication (2FA) to increase security. Block your credit and debit cards if you use internet banking.
Notify the cyber cell of any online scams.
The most crucial action following the initial few is submitting a complaint to the cyber cell. Inform the local Cyber Crime Cell about the event. To address such allegations, the Indian government established specialized cybercrime cells in major cities. Additionally, you have the option to register a complaint online at cybercrime.gov.in, the National Cybercrime Reporting Portal. Give all pertinent information, such as emails, transaction IDs, and correspondence with the con artist.
Keep in mind that your chances of getting your money back are better the earlier you notify the authorities.
How to Guard Against Internet Fraud
In the interim, consider these precautions to help you avoid falling for scams:
• Exercise caution when accepting unsolicited offers: Generally speaking, an offer is too good to be true. Avoid being seduced by fictitious claims of quick money or large returns.
• Check Information: Prior to clicking on links or disclosing personal information, always verify the veracity of the sender’s website, phone number, and email address.
• Watch Out for Emotional Triggers: Fear—such as threats of legal action—or excitement are common tools used by scammers to affect victims’ feelings. Remain composed and use caution.
• Strong Passwords & 2FA: Whenever possible, enable two-factor authentication and create strong, one-of-a-kind passwords for all of your online accounts.
• Remain Informed: Learn about typical internet scams and stay current on the most recent strategies employed by con artists.
FAQs on Online Fraud in India
1. What is online fraud?
Online fraud refers to any fraudulent activity that takes place over the internet. This includes identity theft, phishing, online scams, credit card fraud, and cyberstalking, among other illegal activities.
2. What are the common types of online fraud in India?
Phishing: Fraudulent attempts to obtain sensitive information by pretending to be a trustworthy entity in electronic communication.
Credit/Debit Card Fraud: Unauthorized use of someone else’s card details for transactions.
Identity Theft: Stealing personal information to impersonate someone for fraudulent activities.
Online Shopping Scams: Selling non-existent products or services, or failing to deliver purchased goods.
Scam and pyramid schemes: are deceptive investment schemes that guarantee substantial returns with minimal risk.
3. Which laws in India address online fraud?
Online fraud in India is primarily addressed under:
Information Technology Act, 2000: Sections 66C (Identity theft), 66D (Cheating by personation using computer resources), 43 (Penalty and compensation for damage to the computer, computer system, etc.), and others.
Indian Penal Code, 1860: Sections 420 (Cheating and dishonestly inducing delivery of property), 468 (Forgery for purpose of cheating), 471 (Using as genuine a forged document), and others.
Consumer Protection Act, 2019: Provides remedies for victims of online fraud in consumer transactions.
4. How can victims of online fraud report the crime?
Victims can report online fraud through:
Cyber Crime Portal: The Government of India’s Cyber Crime Portal allows for reporting cybercrimes, including online fraud.
Local Police Station: Filing an FIR (First Information Report) at the nearest police station.
Cyber Cells: Specialized cybercrime units available in many cities.
5. What are the penalties for committing online fraud in India?
Penalties vary based on the type and severity of the fraud:
Under the IT Act, 2000, penalties can range from fines to imprisonment up to three years or more.
Under the IPC, 1860, depending on the offense, penalties can include imprisonment for up to seven years and fines.
6. Can a victim of online fraud get compensation?
Yes, victims can seek compensation:
Under the IT Act, compensation can be claimed for damages to the computer system or unauthorized access.
Under the Consumer Protection Act, victims can claim compensation for losses in consumer transactions.
7. What steps can individuals take to protect themselves from online fraud?
Use strong, unique passwords for different online accounts.
Enable two-factor authentication wherever possible.
Exercise caution while clicking on links or unwanted emails.
Keep a close eye on credit reports and bank accounts.
Refrain from disclosing private information on unprotected websites.
8. Can a foreign national commit online fraud against an Indian citizen be prosecuted under Indian law?
Yes, Indian laws such as the IT Act, 2000 have provisions to cover offenses committed outside India if the act affects a computer, computer system, or network located in India.
9. Is there a statute of limitations for reporting online fraud in India?
The limitation period for filing a complaint depends on the type of fraud and the law under which it falls. For most online fraud cases, the limitation period is typically three years from the date of the incident.
10. Are companies liable for online frauds perpetrated by their employees?
Companies can be held liable if it is proven that the fraud was committed with their knowledge, approval, or due to their negligence in implementing adequate security measures. The IT Act, 2000 provides for such corporate liability in cases of failure to protect data and privacy.
These FAQs aim to provide a foundational understanding of the legal aspects of online fraud in India. It is advisable to speak with an attorney about individual instances.
REFERENCE
https://www.linkedin.com/pulse/online-fraud-india-legal-perspective-kingstubbkasiva-mrxjc/
