“Digital arrest” scams: what are they? What makes them so appealing to Indians?

Digital Arrest Scams: The Rising Threat in India’s Cyberspace

India is witnessing a surge in digital swindles, with one particularly alarming type—digital arrest scams—gaining prominence. From online dating fraud to cryptocurrency schemes, cyber scams have become increasingly sophisticated, preying on victims through “social engineering,” a tactic to manipulate individuals into making poor decisions.

According to the Indian Cybercrime Coordination Centre (I4C), Indians have reported losses of₹19,888.42 crore in cyber frauds so far in 2024, a dramatic increase from₹921.59 crore in 2023. The national cybercrime helpline (1930) has fielded around 14.41 lakh calls this year. Among these scams, digital arrest scams stand out, with 92,323 cases reported over the past eleven months, causing losses of ₹2,140.99 crore. Experts believe the actual figures could be much higher, as many victims avoid reporting such incidents due to fear or embarrassment.

What Are Digital Arrest Scams?

The digital arrest scam emerged in early 2023 as an offshoot of courier scams. Initially, fraudsters would pose as courier executives, claiming a package in the victim’s name was stuck at customs for containing illegal items. Victims were then connected to fake law enforcement or customs officials and asked to transfer money to a purported “RBI-stipulated” surveillance account, with assurances the funds would be returned after verification.

In digital arrest scams, fraudsters employ similar tactics. They impersonate officials from agencies like the Reserve Bank of India (RBI), Telecom Regulatory Authority of India (TRAI), or even judges. Some fraudsters go as far as staging fake court hearings. Using fear tactics, they threaten targets with surveillance, arrests, and jail time, coercing them into transferring money.

“They exploit the victim’s darker fears, convincing them they’ve committed a crime, such as viewing illegal content,” says Dr. Rakshit Tandon, a cybersecurity expert who advises Indian law enforcement agencies.

How Do Victims Fall for These Scams?

Fraudsters conduct detailed research on their targets and sometimes access personal information from breached databases sold on the dark web. By referencing previous online purchases, they gain the victim’s trust, making their impersonation seem more credible.

Victims often recall being asked to download Skype for video calls, during which scammers appear in official-looking uniforms and use props like fake IDs and documents bearing government logos. Impersonating high-ranking officials, scammers add gravity to their threats, sometimes linking victims to high-profile cases, such as the money laundering probe against Jet Airways founder Naresh Goyal.

Recently, scammers have leveraged generative AI to clone the voices of family members, adding a distressing emotional element to their schemes. Dr. Tandon suggests that the overload of online information and excessive use of digital technology has impaired people’s critical thinking, making them more vulnerable.

Who Is Behind These Scams?

Initially, most scam calls originated from Southeast Asian countries like Cambodia, Laos, and Vietnam. According to the I4C, these scams are operated out of “scam compounds” based in shuttered casinos. Indian youth are often lured to these compounds with false promises of IT and administrative jobs.

A United Nations report revealed that while some Indians willingly participate in these scams after undergoing training, others are forced into them against their will. Earlier this year, it was reported that over 5,000 Indians were trapped in Cambodia and coerced into carrying out cyber fraud, though 1,300 were rescued between May and June 2024.

Fraudsters use mule bank accounts to launder stolen money. These accounts help obscure the funds’ trail by transferring money multiple times or sending it abroad via cryptocurrencies, fake investment sites, and offshore betting platforms. Last month, the Indian government frozen over 4.5 lakh mule accounts across banks like SBI, PNB, Kotak Mahindra Bank, and Airtel Payments Bank.

How Can These Scams Be Stopped?

Awareness is critical to combating digital arrest scams. In his Mann Ki Baat radio program on October 27, Prime Minister Narendra Modi warned citizens about these scams, stating, “There is no system like digital arrest under the law. No government agency will ever contact you via phone or video call for such an investigation.”

Microsoft-owned Skype, a platform frequently used by scammers, has introduced real-time alerts for users typing certain keywords. The I4C has also urged Skype to remove 1,700 suspicious IDs.

Dr. Tandon emphasizes the importance of reporting cyber fraud within the first 24 hours—the “golden hour”—via government channels like the Chakshu portal or the national cybercrime helpline (1930). These platforms are connected to law enforcement systems that can alert banks, payment wallets, and intermediaries to block transactions.

Data from the I4C shows that banks blocked ₹1,361 crore out of ₹11,269 crore in defrauded money during the first half of 2024. However, only ₹11.97 crore has been returned to victims, underscoring the challenges in recovering stolen funds.

Digital arrest scams represent a complex and evolving threat in India’s cyberspace. While government actions and awareness campaigns play a crucial role, individuals must remain vigilant to avoid falling prey to these sophisticated frauds.