A recent report by Localcircles, a Delhi-based market research company, has revealed that a vast 74 per cent of people who experienced banking related frauds, never recovered their lost money.
According to the report, as long as people continued storing their sensitive personal financial details, such as banking passwords, ATM cards’ details and others on their smartphone, email or computer or other devices, they remained vulnerable to financial frauds.
The report surveyed 32,000 people across 301 districts of India. About 62 per cent of the respondents were men, and the rest were women. About 43 per cent people were from tier-I cities, 30 per cent from tier-II, and the balance 27 per cent from tier-III, tier-IV, and rural districts.
The report said that about 29 per cent of consumers shared their ATM or debit card PIN details with their close family members, and about 4 per cent shared it with their domestic and office staff as well.
Besides, about 33 per cent consumers stored their bank account, debit or credit card and ATM passwords, Aadhaar and PAN details on email or computer. Lastly, about 11 per cent of consumers stored all these details on their mobile.
“Storing sensitive financial details on a phone’s contact list, email, or computer, poses a significant risk to cyberattacks, especially if the gadget is stolen or falls into wrong hands,” the report said.
“Regarding the practice of people storing sensitive financial information, these days, various online apps ask for permission to access one’s contact and messages. While some select apps can be trusted, others cannot be, and have been utilised to defraud people. Hence, people must be wary of storing sensitive financial information on their smartphones,” the report said.
Incidentally, the Reserve Bank of India has also said in an annual report that in the financial year 2020-21, the amount of money lost in frauds was Rs 1.38 lakh crore. About Rs 60,414 crore was lost in frauds where the amount involved was more than Rs 1 lakh, it said.
Some Other Trends Observed
The survey also highlighted a few other aspects.
Magnitude of Frauds: About 42 per cent people surveyed said that in the last three years they or someone in their family experienced some kind of financial fraud. About 54 per cent said they had thankfully never experienced any financial fraud, while 4 per cent said that they experienced multiple financial frauds in the last three years.
"With a massive chunk of users falling prey to OTP frauds, the government and the RBI have sent regular cautionary communications to the masses. Representatives from a bank or a government agency will never ask for an OTP, so users must ensure they do not share their OTPs with anyone over a phone call or in person. Similarly, businesses too face the problem of online fraud," said Ranjan R Reddy, founder and CEO, Bureau, a cyber security company.
Types Of Financial Frauds: It was found that bank account frauds had the highest victims, at 29 per cent, followed by e-commerce website frauds at 24 per cent. About 8 per cent of those surveyed mentioned experiencing ATM card fraud, while 18 per cent people said they experienced debit and credit card fraud.
"With the increase in digital adoption and resultant online transactions in the form of e-commerce or banking, there has been an overall increase in banking and transaction-related cybercrimes. OTP fraud, phishing, UPI fraud and data leaks are some of the issues plaguing Indians," added Reddy.
Aftermath Of The Fraud: A good 36 per cent of the people said that they are yet to receive the money lost in fraud. “The matter is still pending” is what most respondents said. Only about 10 per cent people got their money back after complaining with the platform, and about 7 per cent people said they filed a complaint with the relevant authorities and got their money back.
In total, about 17 per cent people got their money back.
“If only 17 per cent who faced a financial fraud were able to get their funds back, then it clearly indicates that even for those who complain, only one in six are likely to find the redressal and that too after many follow-ups, and after a long time. Similarly, the policing system, which is the first complaint point for a large majority of Indians, is just not sensitised to handle such issues or even provide guidance,” the report concluded.