Cases of digital frauds surge during pandemic; Mumbai, Delhi and Chennai top chart

With the increased usage of digital channels for payments during the COVID-19 pandemic, attempts of digital fraud have been on the rise in India as in the rest of the world, according to recent reports by TransUnion and ACI Worldwide. Customers have been relying on digital channels to do business on account of local restrictions and fear of COVID spread.

According to a report by global information and insights company TransUnion, the share of suspected fraudulent digital transaction attempts originating from India increased 28.32 percent over the 12 months ending March, 2021 compared with the previous 12 months.

In India, across industries, TransUnion found that the highest share of suspected digital fraudulent transactions originated from Mumbai, Delhi and Chennai.

“Results showed a significant increase in attempted digital fraud originating from India against logistics companies. The level more than trebled (up 224 percent) and has been a significant development during COVID-19 times,” TransUnion said in its report.

Software firm ACI Worldwide said in a report that globally, card-related fraud accounts for the largest number in terms of reported incidents from consumers, but fraud incidents associated with real-time payments were on the rise from 2019 to 2020 as fraudsters began to target new channels.

“Real-time payments scams that were on the rise include: confidence tricks (12.5 percent rising to 13.7 percent), identity theft (6 percent rising to 11.6 percent) and digital wallet account hacks (4.4 percent rising to 6.2 percent),” ACI Worldwide said.

On the other hand, the incidence of overall bank frauds fell during FY21, the Reserve Bank of India (RBI) annual report showed.

The number of bank frauds reported during 2020-21 decreased by 15 percent in terms of number and 25 percent in terms of value, vis-à-vis 2019-20, the RBI report said. The share of public sector banks in total frauds decreased both in terms of number and value, while that of private sector banks increased during the year, the RBI said.

“In terms of area of operations, frauds have been occurring predominantly in the loan portfolio (advances category), both in terms of number and value,” the central bank said. Though the value of frauds reported in the advances category for FY21 remained almost the same as compared to the last year in percentage terms, the incidence of frauds in the advances category, has fallen over the previous year in terms of number.

The average time lag between the date of occurrence of frauds and the date of detection was 23 months for the frauds reported in 2020-21. However, in respect of large frauds of Rs 100 crore and above, the average lag was 57 months for the same period, the RBI said.