Digital arrest scams: Smarter fraudsters, lagging govt response? | AI With Sanket

Digital fraud in India is no longer limited to stolen OTPs or phishing links. A more coercive form — known as “digital arrest” — is leaving victims financially ruined and without institutional support. In a detailed discussion, Mukesh Choudhary, Bilal Zaidi, Biren Yadav, and Virag Gupta examined how fraudsters are evolving faster than the systems meant to stop them, and why victims remain stranded long after the crime.

A growing threat

Digital arrest scams are spreading rapidly across India, targeting citizens through calls that impersonate law enforcement agencies and investigative bodies. Victims are told they are under investigation for serious crimes and are coerced into transferring money under the guise of verification.

The panel noted that while awareness campaigns focus on prevention, little attention is paid to what happens after a fraud has occurred. Victims often find themselves navigating a maze of police stations, banks, and courts without meaningful redress.

This widening gap between crime and justice formed the core concern of the discussion.

Jurisdictional gaps

Senior advocate Virag Gupta traced the roots of the problem to constitutional and legal design. He pointed out that cybercrime, telecom, and IT fall under the Union government, while policing remains a state subject.

According to Gupta, the IT Act of 2000 does not adequately empower state police forces, even though FIRs are registered at the state level. He highlighted that a high-powered committee formed by the Union Home Ministry includes multiple central agencies but excludes state representation. This creates a structural handicap when cybercrime networks operate across states or from outside India.

Crimes undercounted

Gupta drew attention to discrepancies in official data. NCRB figures show around 2.05 lakh cybercrime FIRs registered between 2021 and 2023. However, Home Ministry helpline data records nearly 49 lakh cyber fraud complaints in the same period.

The mismatch suggests that a large number of cyber fraud cases never enter the formal criminal justice system. Gupta argued that under-reporting weakens accountability and distorts policy responses.

He also cited reports indicating that large portions of fraud proceeds are routed through hawala networks, cryptocurrency, and overseas channels, with only a fraction returned to victims.

Regulatory failures

Another concern raised was non-compliance by digital intermediaries. Gupta recalled a Delhi High Court ruling that mandated the appointment of grievance officers. Yet, even years later, some platforms had failed to appoint compliance and grievance officers in India, as required under IT Rules, 2021.

He argued that misuse of police and court authority in digital arrest scams thrives in this regulatory vacuum.

A victim’s ordeal

Biren Yadav, a digital arrest victim, detailed how the scam unfolded. He received an early morning call claiming his phone was involved in anti-national activity and that an arrest warrant had been issued.

The caller cited Yadav’s Aadhaar, PAN details, and bank information, making the threat appear credible. He was told his family assets would also be seized, a warning that stepped up the pressure.

Yadav said he was kept on the phone for an entire day and instructed to visit banks to transfer money via RTGS after breaking fixed deposits.

Banking silence

Yadav described visiting multiple banks — including ICICI, HDFC, Axis Bank, and Canara Bank — where large transactions were processed without a single official questioning the urgency or nature of the transfers.

He eventually lost ₹1.6 crore. When he realised something was wrong the following day, he reported the matter immediately to the cyber cell. Despite this, he said there has been no arrest, no recovery, and no consistent communication from authorities even after one and a half years.

Endless follow-ups

Yadav said small amounts returned through court orders were frozen again after police in other states flagged transactions as suspicious. His bank accounts remain unusable.

He recounted approaching the Ministry of Home Affairs, the Commissioner of Police, RBI, and even the PMO — all without resolution. Requests were rejected or redirected, often on technical grounds.

Yadav questioned how warrants could remain unexecuted for over a year despite known addresses.

Awareness versus action

Mukesh Choudhary, founder and CEO of Cyberops, argued that common awareness slogans like “don’t share your OTP” are incomplete and misleading.

He explained that OTP sharing is part of routine digital life — from cabs to courier deliveries — making blanket warnings ineffective. Fraudsters constantly adapt, rendering static messaging obsolete.

Choudhary said awareness programmes often target colleges and universities, while most financial fraud victims are working professionals or retirees at home.

Community policing

Choudhary suggested community policing as a more effective approach. He argued that cyber awareness must reach households directly, not rely on caller tunes or celebrity endorsements.

According to him, caller tunes lasting a few seconds cannot communicate complex fraud patterns or response strategies. He stressed that proactive law enforcement, not just public caution, is essential to restore confidence.

Elderly at risk

Bilal Zaidi, founder and CEO of Elderra.io, highlighted the disproportionate impact on senior citizens. His organisation conducts door-to-door workshops and small-group training sessions for the elderly.

Zaidi said a major gap lies in follow-up after complaints. Many victims receive no updates, no timelines, and no clarity on whether helplines like 1930 actually work.

He warned that repeated failures are pushing seniors to abandon digital services altogether, leading to digital exclusion.

Data leakage fears

Zaidi flagged a deeper concern: the sensitive nature of data used by scammers. Victims are often confronted with detailed financial histories, property transactions, and account balances.

Such information, he argued, should only be accessible to banks or law enforcement, raising serious questions about data handling and leaks. This credibility is what makes digital arrest scams effective and psychologically coercive.

Beyond prevention

The panel agreed that prevention is necessary but insufficient. Once fraud has occurred, victims like Yadav face an institutional vacuum.

Zaidi questioned whether tech platforms benefiting from digitisation should share responsibility for digital inclusion and protection.

He also called for dedicated response cells for vulnerable groups, with clear service-level timelines similar to private-sector customer support.

Accountability deficit

The discussion concluded with a sharp critique of institutional accountability. While citizens are urged to remain alert, the system offers little reassurance once fraud occurs.

The panel emphasised that without timely investigation, recovery mechanisms, and victim support, awareness campaigns risk becoming hollow exercises.

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