This article has been written by Anantkumar Collins, pursuing a Diploma in Corporate Litigation from LawSikho. and edited by Shashwat Kaushik. It includes a thorough explanation of each type of online fraud as well as remedies.
It has been published by Rachit Garg.
Table of Contents
Since the beginning of time, crime has existed on earth everywhere and affected everyone. Crime is generally understood to be an illegal activity, such as someone seeking unnecessary retribution or gain. An offence has been charged by the government, and different authorities and courts have decided on punishment in criminal or civil law, such as penalties, compensation, and protections under the existing law and rules. Indian penal law is the Indian Penal Code 1860 (IPC), 1860 procedural by the Code of Criminal Procedure, 1973.
A brief history of fraud and definition
Fraud involves the false representation of facts, whether by intentionally withholding important information or providing false statements to another party for the specific purpose of gaining something that may not have been provided without the deception. The first instance was discovered in Greece in the year 300 B.C., when a Greek businessman named Hegestratos purchased a large insurance policy known as a bottomry. He took out a loan against his ship and promised to repay it with interest, but he did not give back the money with interest. It is very clear and widely accepted that anyone who lies to another person in order to benefit financially or otherwise—but not legally—from his dishonesty is acting dishonestly. Online frauds include spam, scams, spyware, identity theft, phishing, and internet banking fraud.
There are three types of crimes: felonies, misdemeanours, and violations. Each one carries a different penalty depending on the nature and circumstances of the crime. Felonies mean homicide (maha apradh) and are covered in sections IPC 299 to 302. Misdemeanours are insignificant offences that happen frequently, such as someone operating a vehicle without a valid licence. Violations refer to breaking the law or the rules; in the city, for instance, traffic infractions have risen steadily over time.
As a result of information technology, a new type of crime known as online fraud has emerged. Online fraud has now become a global concern. This kind of online fraud can affect anyone. We are in a technological age known as 4G, 5G, and 6G. We use the newest devices, including computers, laptops, and mobile phones, to conduct business online. As of January 2023, 5.18 billion people used the internet, which represents 64.6% of the world’s population. Out of this total, 4.76 billion people, or 59.4% of the world’s population, used social media sites like Facebook, WhatsApp, and Instagram. 95 out of 100 people use the internet on average. Every country is seeing an increase every day. India has a separate law known as “Cyber Law,” which is governed by the Indian Penal Code, 1860, and the Information Technology Act, 2000. The Information Technology Act, the Indian Penal Code of 1980, and National Institute of Standards and Technology (NIST) Compliance are the laws that form the foundation of cybersecurity. In nations like India, where the internet is widely used, there are numerous laws.
Types of online fraud and modus operandi
Online fraud has used a variety of innovative strategies and tactics to commit online crime. It includes malicious software, email, and instant messaging services to spread malware, spoofed websites that steal user data, and elaborate, wide-reaching phishing scams.
Fraudsters create third-party link websites which look like original websites, such as bank’s website, e-commerce websites, search engines, etc. Fraudsters generally spread and send SMS/E-mail/instant messages. Most of the time, customers enter secure credentials by just having a glance and clicking on the link without checking the detailed URL. The links are covertly masked through authentic looking names of websites, but they are not real, and the customer gets redirected to a phishing website. When customers enter secure credentials on these websites, they are secured and used by the fraudsters.
Do not click unknown links and immediately delete the messages /emails. Also, avoid clicking on them in the future. Priority must be given to checking and verifying details where and when required.
Fraudsters call as a fake officer from the bank/government institutions/insurance agent, etc. and get private information like name, date of birth residence, Aadhaar card number, etc. They sometimes pressurize the victim for urgent details to prevent the blocking or freezing of an account.
Avoid receiving fake calls and do not share personal information such as username/password/card details/ name, date of birth, address, or Aadhar number.
Fraudsters using online selling platforms
Fraudsters set up phoney online marketplaces for vendors, so they can draw customers and offer their products for free. It’s totally free, and as a result, there are higher level cheating possibilities.
Avoid as much as possible, and be careful with financial transactions on online products. Remember that when receiving any money online, there is no need for a password or PIN anywhere. Never install any application to receive money.
Fraud due to use of unknown/ unverified mobile apps
Through SMS, social media platforms, and instant messages, scammers typically distribute links with covert masks in order to access your mobile device, laptop, or desktop. Anyone who downloads unidentified or unverified apps is then forwarded to unidentified applications. Then the scammers will have full access to the device.
Never download applications from unidentified /unverified sources.
ATM/ debit/ credit card skimming
It has been noted that scammers install skimming devices in ATMs to steal information from your card PIN. This information is also stolen by the small, well-hidden camera in the ATM. Sometimes thieves are waiting outside an ATM cabin to access your PIN as you enter, create a duplicate card, and withdraw cash.
Never enter an ATM cabin while someone is in it. Always cover the keypad with your hand while entering a PIN. Do not give cards or details to an unknown person and never share confidential matters
Fraudsters using sharing app/ remote access
Fraudsters use ultramodern technology to cheat. Fraudsters trick people by using screen-sharing apps, through which they can watch/control mobile/laptop/computer to gain access to confidential credentials. After finishing, they can make a payment using your internet banking/payment apps.
Do not download or activate screen sharing features with unknown people.
SIM swap/ SIM cloning
As most of the account details and authentication are connected to your registered mobile number. Fraudsters try to gain access to the SIM card or obtain a duplicate SIM card to carry out digital transactions using the OTP received on such a duplicate SIM. Fraudsters generally call the person by posing as telephone or mobile network staff, requesting details for a free upgrade of their SIM card from 3G, 4G, or 5G, providing additional benefits.
Never share credentials pertaining to a SIM card. If you have not used your phone’s mobile network in a significant amount of time in a normal setting, you should get suspicious right away and call the mobile operator to make sure that your SIM has not been issued a duplicate.
Fraud by stealing credentials from various sites
It has been observed that people use search engines to obtain contact details of their bank, insurance company, Aadhar updation centers, etc. and may end up contacting unknown/unidentified contact numbers displayed on the search engine. These contact details on search engines look original and genuine, but they are actually fake, and fraudsters use this feature to attract their victims towards them. Once the person calls them, the imposters ask to share your details for verification. As a result, people compromise all their details and share them, and that’s how fraud occurs.
First, go to the proper banks/company office and get websites from them. Avoid searching for unidentified/unknown contact details on search engines.
Scam through QR scan
Fraudsters often contact customers under various pretexts and trick them into Scanning QR codes using payment apps. This allows the fraudsters to withdraw money from customer’s account
Always be cautious while scanning any QR codes using payment apps. Remember QR codes embedded with account details that transfer money to a particular account.
Impersonating through social media
Fraudsters create fake accounts on popular social media platforms like Facebook and Instagram. They send a friend request and ask for money for urgent Medical purposes, etc. Fraudsters also gain trust over time and use private information for extortion or blackmail later.
Do not accept any friend request from an unknown/unidentified person. Do not send confidential matters; moreover, care when unknowns ask to call/ or meet physically. Be sure this type of profile are purely deceitful
One of the most enticing techniques is when fraudsters send an email or message about winning a big lottery and ask to deposit some money for tax purposes, shipping charges, processing charges, etc. on the account given by the fraudster. The victim may fall into the cage, and the fraudster may receive the money illegally.
Do not respond to any enticing offer or make a payment when you receive this type of mail or message.
Online job fraud
Unemployment is real. Fraudsters easily take advantage of rising unemployment rates. Victims easily fall into the trap because when there is time to share confidential matters, fraudsters use shared credentials to withdraw money from the account.
Remember, a genuine job offer never asks for money
Online fraud has affected various countries in various ways. It is true that the banking system is the heart of any country. If the banking system is paralysed, the whole economy is scattered and affects the people. As internet users are increasing all over the world, especially after the pandemic COVID-19, it is essential to work online for health reasons. Internet user’s are spreading at rocket speed. And there is also a lack of knowledge about the safety precautions of new technology, which fraudsters can easily gain and deceive people with. However, India has awareness, and it has the Information Technology Act, 2000, and the Indian Penal Code, 1860. Moreover, they have been updated from time to time.
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