Mumbai’s digital underworld: Cyber fraud cases skyrocketing

Police have compiled a list of the top 15 prevalent frauds in Mumbai. Representation pic/istock

A multitude of cyber fraud incidents have hit the city, resulting in a significant number of daily cases filed in Mumbai. The city police have compiled a list of the top 15 prevalent frauds in Mumbai, and dedicated cyber teams are actively addressing these issues. However, the detection rate for these frauds remains below 10 per cent. The police recognise that enhanced infrastructure, the adoption of advanced technology, and the recruitment of well-trained officers are what could effectively combat these cybercrimes.

Based on official data from the Mumbai police, there have been 1,909 reported cases of cyber fraud in Mumbai from January to May of this year. Of these, only 200 have been successfully detected, resulting in the arrest of 295 individuals. This data highlights the significant gap between the number of reported cases and the detection rate, indicating the need for further improvements in the investigation and prevention of such crimes. According to the Mumbai police, the city has been plagued by several major types of cyber fraud.

Types of cyber fraud

>> Phishing Scams: Fraudsters deceive individuals by posing as legitimate entities or organisations and tricking them into revealing sensitive information such as login credentials, financial details, or personal data. There have been 20 reported cases of phishing in Mumbai, and four have been solved with the arrest of five accused.

>> Online Banking Fraud: Criminals exploit vulnerabilities in online banking systems to gain unauthorised access to victims' accounts, leading to unauthorised transactions or theft of funds. There have been 541 reported cases in Mumbai, and only 18 have been solved with the arrest of 19 accused.

>> Social Media Fraud: Fraudulent activities on social media platforms, including fake profiles, identity theft, spreading misinformation, and luring individuals into scams. There have been 84 reported cases of social media fraud this year, and 19 cases have been solved with the arrest of 19 accused.

>> Investment and Ponzi Schemes: Fraudulent investment schemes promising high returns or Ponzi schemes that rely on new investors' money to pay existing investors, ultimately collapsing and causing substantial financial losses. This year, 42 cases of investment and Ponzi schemes have been reported, and only six have been solved with the arrest of 20 accused.

The Mumbai police are actively working to combat these crimes and raise awareness among citizens to prevent falling victim to such scams. Apart from these, the police have also categorised different types of cheating cyber frauds as major concerns, including insurance fraud, admission fraud, fake website fraud, cryptocurrency fraud, and investment fraud.

"Cyber fraud is unlike any other crime; here, no one knows where the cyber crooks are operating from, and even when you find out their locations, you're unaware of their real identity. Everything is hidden, and you have to dig it out, which is why it takes a lot of effort and time to solve these cases. This is one of the reasons why the detection rate is low, but it's improving with every passing month, and advanced technology is the need of the hour," said an officer of cybercrime, speaking on condition of anonymity.

The city police are currently facing a challenge regarding the release of arrested individuals within a week or two. The law makes it easier for the accused to obtain bail. Specifically, the punishment prescribed under the IT Act is three years, and when Section 420 (cheating) of the IPC is invoked in a case, defence lawyers often cite a Supreme Court order that restricts the use of general laws alongside special laws like the IT Act. "This legal complexity further complicates the process of holding the accused accountable," said an officer.

"An illustrative example is the ruling of the Supreme Court, which states that once a special act is invoked, the general act cannot be applied. However, in cases of cyber fraud, Section 420 of the IPC continues to be used," said advocate Sunil Pandey.

"Having dealt with cyber cases at the magistrate court and the sessions court on a daily basis, I have successfully obtained bail for more than 100 individuals," added Pandey.

He added, "Many of the individuals arrested by the prosecution can also be considered victims of circumstances. They may have been unknowingly hired for a job and remain unaware of their involvement. Additionally, the police often face challenges in tracing the masterminds behind these cyber frauds."

Types of online frauds

>> Online Shopping Fraud: Scams related to online purchases, where individuals either receive counterfeit goods, never receive the ordered items, or become victims of identity theft during the transaction. This year, 65 cases have been reported, and 4 solved.

>> Cyber Blackmail and Sextortion: Criminals coerce victims into performing certain actions or paying a ransom by threatening to expose sensitive or compromising information obtained through hacking, online interactions, or stolen data. There have been 22 cases of sextortion, and only 1 case solved.

>> Tampering of Source Code Fraud: This type of cyber fraud involves unauthorised access to the source code of a program or application, making changes that can compromise its integrity, functionality, or security. Zero cases reported in Mumbai.

>> Data Theft Fraud: Also known as data breach or data theft, this involves the intentional theft, copying, or unauthorised disclosure of data from individuals, organisations, or systems. There have been 11 reported cases of data theft, and only 2 have been solved.

>> Matrimonial Fraud: This refers to fraudulent activities or deceptive practices carried out in the context of marriage or matrimonial relationships. There have been 4 reported cases, and none solved yet.

>> Loan App Fraud: In this, cyber criminals offer hassle-free loans ranging from R5,000 to R15,000 without proper documentation. These fraudsters exploit their victims by gaining access to their contact details and subsequently resorting to blackmail tactics, using additional personal information or photos to extort large sums of money, far exceeding the initial loan amount. This year, only 26 cases have been reported to Mumbai police, with a detection rate of 5 cases.

>> Like and Earn Scam: The Mumbai police has categorised the "Like and Earn" scam under job fraud, as it falls within the broader spectrum of fraudulent employment schemes. In recent times, fraudsters have adopted new techniques by enticing individuals with work-from-home opportunities, where the task involves simply liking videos and making posts to earn money. Initially, victims receive a small amount in their accounts, boosting their confidence and encouraging them to participate further in the scheme. However, as the scam progresses, victims end up losing substantial sums, sometimes in the lakhs. As per the official data, 163 cases have been reported, and 12 cases are being solved.

>> Custom Gift Fraud: Refers to fraudulent schemes or scams involving the sale or purchase of personalised or custom-made gifts. Fraudsters may advertise unique and customised products, such as engraved jewellery, monogrammed items, or personalised artwork, to attract unsuspecting buyers. However, their true intention is to deceive customers, often resulting in financial loss or the receipt of substandard or counterfeit goods. There have been 28 reported cases this year, and none detected.

>> Email Spoofing Fraud: Email spoofing fraud involves the manipulation of email headers to create deceptive or fraudulent emails that appear to originate from a different sender or domain. The goal is often to trick recipients into believing that the email is legitimate and to deceive them into revealing sensitive information. This year 20 cases have been reported, and only 4 detected with the arrest of 5 accused.

>> Hacking: Hacking is a malicious activity wherein fraudsters gain unauthorised access to victims' social media accounts. These perpetrators exploit their control over the compromised accounts to extort ransom from victims. They employ various tactics, such as threatening to post inappropriate content on the victim's profile or sending vulgar messages to their family and friends. This year, 18 cases have been reported in Mumbai, and only 2 cases solved with the arrest of 8 accused.

>> Cryptocurrency Fraud: This refers to fraudulent activities involving digital currencies such as Bitcoin, Ethereum, or other cryptocurrencies. Fraudsters exploit the decentralised and anonymous nature of cryptocurrencies to deceive individuals and steal their funds. This year, 19 cases were reported, and none solved.

Police chief says

"The Mumbai police are actively working to combat these crimes and raise awareness among citizens to prevent them from falling victim to such scams," said Vivek Phansalkar, commissioner of police.

1,909
No of cases reported between Jan to May 2023