The United Nations Population Fund (UNFPA) recently released the 2023 "Caring for Our Elders – Institutional Response" report in India, shedding light on the country's rapidly ageing population. Over the period 2022–2050, India's total population is projected to expand by 18 percent, with the elderly demographic (aged 60 and above) expected to surge by 138 percent.
With the increasing adoption of digital banking and electronic payments, the prevalence of financial cybercrime is likely to rise. The elderly population, who may lack technological expertise and face age-related issues such as memory loss or cognitive decline, could become more vulnerable to fraudulent transactions. The increasing share of elderly people in the population will further increase such cases.
Seniors falling victim to such fraud can face dire consequences, especially considering that many of them lack substantial income. Such losses from their nest egg can profoundly affect their quality of life, potentially leading to depression and health problems. Moreover, these situations often leave them without the energy or resources needed to seek justice and recover their lost funds.
To address this critical issue, we must recognise that mere safety features and education may not be sufficient, as scammers are continuously evolving. Harsher punishments for fraudsters alone won't completely solve the problem. From the perspective of the victims, true justice is only achieved when victims are able to recover their lost funds.
To this end, one potential solution is to consider setting up a Senior Citizen Financial Cyber Crime Protection Fund under the aegis of the Reserve Bank of India (RBI). This fund could resemble the investor protection funds managed by stock exchanges.
The corpus of this fund can be built by imposing a nominal charge (e.g., 0.002 percent*) on banks based on their annual averages of current accounts, savings accounts, and fixed deposit values. This fund can operate through member banks.
(*The amount is arrived at based on the reported cybercrime losses last year of approximately Rs 200 crore, whereas aggregate bank deposits were over Rs 1,75,00,000 crore.)
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Functions of the fund
1. Instant reimbursement of funds lost due to cyber financial fraud
The fund should provide instant reimbursement after gathering pertinent evidence from both the victim and the banks involved and confirming the fraud's authenticity. Before reimbursing the victim, the fund should have the victim sign a power of attorney, granting authority to the fund to seek legal remedies on behalf of the victim and the right to retain recovered amounts, if any.
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2. Power to participate in investigations with appropriate authorities
The fund should have regulatory powers to be part of the investigations along with other designated investigative authorities to probe these crimes thoroughly, pursue legal remedies, and recover illicit proceeds. Additionally, the fund can develop its own forensic capabilities to expedite investigations and offer support to relevant authorities.
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3. Data repository and analytics
Given its central role in handling cyber financial crimes, the fund will accumulate authentic real-time data on such frauds. It should leverage this data to provide valuable insights and analytics to investigative authorities and the public, aiding in prevention and detection efforts.
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4. Design and implementation of education campaigns
Using real-life cases and timely information on innovative fraud tactics, the fund can develop and execute effective educational campaigns targeted at potential victims. These campaigns should help seniors navigate the digital landscape with confidence and caution.
Implementing this comprehensive strategy will create a safety net for senior citizens, allowing them to embrace digitalisation without fear, secure in the knowledge that they are protected against the perils of financial cybercrime.
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