India’s first-world digital infrastructure and financial inclusion, which has brought access to digital banking, payments, health, and credit services to almost 500 million people, are widely acknowledged. However, this technological progress has also led to a new threat: cyber fraud. India now ranks among the largest victims and perpetrators of cyber fraud worldwide.
In a country where 60% of the population lives on less than $3 a day, any scale of cyber fraud poses life-changing consequences for the victims.
Cyber fraud manifests in several ways, but one insidious practice is money mule fraud. This scam exploits individuals, often from low-income backgrounds or facing financial hardships, by luring them into unwittingly facilitating money laundering activities. The consequences are devastating, with victims facing not only financial losses but also blocked accounts, legal actions, and a damaged credit history, leading to financial exclusion.
Often, the unwitting victims are not even aware of the nefarious activities taking place through accounts opened and transactions done in their name. Today, for less than 50 rupees, one can buy someone’s real identity from several social platforms and chat groups. This allows a fraudster to obtain credit and payments in someone’s name, deposit them in another victim’s bank account, and transfer the illicit funds to crypto or popular gaming tokens, all in a few hours. This is possible because a lot of our identity and transaction data is out there due to multiple data leaks that continue at an alarming rate.