Card and internet fraud tripled in fiscal year 2024

Card and internet fraud tripled in fiscal year 2024

In this digital age, it is essential to protect yourself from online fraud as most people use the internet to conduct their financial transactions. Through seemingly innocuous means like SMS, these cybercriminals can gain access to sensitive personal information including passwords, one-time passwords (OTPs), contacts, and other critical data.

The Reserve Bank of India (RBI) Annual Report 2024 shows that in FY2024, the highest number of banking frauds were related to the card/internet category, with 29,082 incidents accounting for 80% of all frauds. This is 334% higher than the 6,699 frauds in this category in FY2023. The 29,082 frauds in FY2024 account for Rs 1,457 crore of card/internet fraud, the highest amount in the last six years.

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Nowadays, various types of online financial scams occur, including phishing, identity theft, hacking, and malware.

“The increasing digitalisation of the financial services ecosystem and the growing adoption by customers of transactions through digital channels, including payment gateways, has led to an increase in volumes through these channels. Fraudsters are understanding this trend and are exploring the vulnerabilities inherent in these channels as well as customers (especially senior citizens) and hence we are seeing the results,” explained Vivek Iyer, Partner, Grant Thornton Bharat Iyer.

The total number of frauds in India has increased significantly. In FY2023, 13,564 frauds were recorded, compared to 36,075 in FY2024. Among these, card and internet frauds have seen a sharp increase. There were 2,059 such frauds in FY2018, which gradually increased to 3,596 in FY2022. This number then shot up to 6,699 frauds in FY2023 and then shot up dramatically to 29,082 frauds in FY2024.

“Controls for prevention of advance fraud are put in place at the disbursement level and disbursements are made by the banking operations staff and customers have no role in it. Therefore, the vulnerability levels in relation to advances are minimal. This is not the case with customer initiated payments where the vulnerabilities, including behavioural ones, are high and hence the level of fraud is high,” Iyer added.

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According to the Future Crime Research Foundation (FCRC) report, ‘A Deep Dive into Cyber ​​Crime Trends Impacting India’, from January 2020 to June 2023, online financial frauds accounted for 77.4% of all frauds. This was followed by online and social media crimes (12%) and computer hacking/damage to computers (1.5%).

The FCRC report also suggests that among the 77.4% of online financial frauds occurring in India, UPI fraud constitutes 47.2%, debit/credit card and SIM swap fraud constitutes 11.2%, and online banking fraud constitutes 9.2%, making them the most prevalent types of online financial fraud.

The annual report of the RBI’s Integrated Ombudsman Programme shows that in FY2023, most of the complaints filed with the Ombudsman were related to mobile/electronic banking services, accounting for 20.3% of the total complaints. This was followed by complaints related to loans and advances (20.1%), deposit accounts (17.1%) and debit/ATM cards (14.6%).

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