How India’s increasing online scams are threatening the digital landscape

The surge in financial cybercrimes is causing huge economic loss

Originally published on Global Voices

The launch of the Digital India campaign in 2015 marked the beginning of a digital revolution that has profoundly transformed India's socio-economic environment. From the shift to online classrooms to the widespread adoption of digital transactions for everyday shopping, many Indians now favour the convenience of digital payments. India has also taken the lead in online transactions as per 2022 data.

However, this transformation also comes with a cost, as the surge in financial cybercrimes is causing a substantial daily economic loss of nearly INR 1 billion (USD 12 million).

In September 2023, news channel NDTV India released an investigative documentary titled “OTP Mafia,” that exposed the rampant cybercrimes operating from the northern state Haryana's Nuh district.

Cybersecurity threats

With a population of 1.43 billion, India has more than 1.1 billion mobile phones and over 692 million internet users, creating a large pool of people who are digitally vulnerable to various threats.

Financial cybercrimes constitute over 75 percent of all cybercrimes occurring in India. These include a range of illegal activities such as phishing scams, sextortion, OTP scams, debit card scams, call centre scams, and fraudulent activities using Unified Payments Interface (UPI) apps. In recent months, Nuh, a district in the Indian state of Haryana known for its high levels of poverty and unemployment, has gained notoriety as a hotspot for cybercriminals, making headlines.

Cybercrimes in Nuh have seen a sharp increase in the wake of the COVID-19 pandemic, which left a number of people without jobs and income sources. This has pushed educated young people to search for opportunities to make ends meet, with financial fraud emerging as one of the easiest means to acquire a substantial amount overnight. Police analysis found that 28,000 people from 35 states across India were defrauded over INR 1 billion (USD 12 million) by Nuh scammers.

How does this work?

In many cases, these scammers attempt to impersonate officials from leading Indian banks, claiming that there are issues with the victims’ bank accounts that require immediate action. These fraudulent calls are often made in large volumes, trapping unsuspecting call receivers as victims.

To successfully run these scams, scammers use multiple SIM cards from various telecom operators. These SIM cards are frequently obtained through fraudulent means, such as using fake identification cards or luring poor people into providing their documents for obtaining SIM cards, and even can be sold to fraudsters living abroad.

In April 2023, the Delhi police arrested 31 people from West Bengal involved in the unlawful procurement and sale of SIM cards to scammers in large quantities. The police confiscated approximately 22,000 SIM cards, which were sold to a criminal syndicate operating from Jamtara in Jharkhand.

The scamming hub of Jamtara has gained such notoriety that it inspired a 2020 Netflix web series titled “Jamtara: Sabka number ayega” (Jamtara: Everyone's time will come). The series portrays the scams operated by Jamtara in its original form, highlighting how teenagers are involved in these activities using bulk SIM cards, mobile devices, and counterfeit identities.

Researcher Priyanshu Ratnakar from Delhi said on X (formerly Twitter):

After the launch event of 5G in India. Cyber Criminals have started a new scam campaign. You may receive SMS or WhatsApp message to upgrade your sim to 5G.

Avoid following any steps mentioned, this may led to SIM Swap/Forward or other way of scams.

— Priyanshu Ratnakar (@priynshuratnakr) October 3, 2022

IT professional Priyank Agrawal from Bengaluru suggested on X:

The variety and scale of scams in India is just sky rocketing. We seriously need universal solution to these problems.

How about rules on getting new sim cards get stricter? It should be atleast equivalent to bank account safety levels. https://t.co/wSPWvHxCAo

— Priyank Agrawal (@priyankinfinnov) September 28, 2022

Is unemployment leading to scams?

These criminals are typically between 20 to 35 years old, and they represent a new generation of tech-savvy youth with English language proficiency. Many of these young adults are skilled and unemployed, resorting to scams as an alternate way to earn a living.

The CNA Insider documentary titled ‘India's Thriving Scam Industry: Before You Call Tech Support‘ sheds light on how some Indian youngsters are working in these scam call centres as a means of earning income. A good number of Indian youths are working in these fraudulent call centres as full-time jobs. The widespread unemployment problem in the country forces many of them to continue in this line of work, even though it is illegal.

In a Reddit discussion thread titled ‘Why Are Indians Willing to Work in Scam Call Centers?’ participants highlight that a large number of unemployed youths often have limited options and are left with no choice but to work and earn money, even if it involves engaging in illegal activities.

Scams beyond India

Indian scammers’ financial cybercrimes have extended beyond India's borders, with a notable surge in scamming activities targeting countries such as the United States. In 2022, US citizens fell victim to scams, resulting in a loss of USD 10 billion, with a significant portion of these incidents involving senior citizens aged 60 and above. Senior citizens are particularly easy targets for scammers, as they are often less familiar with digital technology and may require assistance with their digital systems.

In June 2023, two Indians were arrested in Florida for scamming an elderly woman of USD 80,000.

In contrast to other cases, these international scams primarily involve tech support fraud. Over the years, call centres have been booming in Indian cities. Some of these call centres are apparently running a valid service on the surface but are operating scam call centres behind the scenes.

The NDTV India documentary OTP Mafia also includes an interview with Shuel Daud, the South Asia head of the FBI, who discusses their efforts to address the victims in the United States targeted by these Indian scammers.

In June 2023, a joint operation by the Delhi police and FBI busted a call centre in Delhi that defrauded US citizens of approximately USD 20 million. Likewise, in September 2023, Assam police raided eight similar scam call centers in Guwahati and arrested approximately 200 people.

However, these actions against scammers remain the tip of the iceberg. Fraudulent call centres persist and continue to grow across India, particularly in urban areas, with the root causes of unemployment and poverty fueling their growth.

Written by Abhinash