Online Transaction Frauds in India

Fraud as understood by the public at large, is an act of trickery by one party against the other. In other words, it is also referred to as deceit or a breach of the confidence. Deceit or fraud as identified in India, can have a criminal or civil liability. A fraud that is subjected between just the parties to a contract are tried under the purview of the civil courts, on the other hand an act of fraud against the public at large is what is tried before the criminal courts.

With the advancement in technology the scope of fraud has widened to online media. It is through the internet that the act of fraud is committed. The simplest example of fraud through online media can be the fake accounts that deceive other parties to do things which they would not have done otherwise. The most kinds of online frauds are committed through phishing, data theft, chargebacks and friendly frauds.

1. Data phishing: it is the act of fetching a person’s information thorough fake e-mails or websites that claim too bee true.

2. Data theft: when, for an online transaction, an Apperson uses thee details of his/her bank cards, the information is saved by the websites or the webpages. this may also be done by physically taking over the possession of the cards and thereby using it for any transaction.

3. Chargebacks: people after entering into an online transaction claim too not have done the transaction and therefore demand back their money from the banks (even in situations where the transaction was made by them)

Online Transactional Fraud, is a type of fraud where the merchant is account is used without the intention of operating a legitimate business transaction. It extends to including the transactions that are undertaken by people over other’s credit/debit cards without having an authorization for the same. thee most common practice of such frauds includes Credit Card Chargebacks and Debit card Fraud.

Credit card chargeback- The claim of the card holder for a refund for a transaction which they have never entered into. There are two ways to look at it. It is either the cardholder who is trying to trick the service provider into paying him an amount that he had spent, or the other is that the cardholder had been tricked and the information of his card has been used to enter into a transaction that he did not initiate. What is common here is the intention of one party to knowingly cause damage to the other party using the credit card details of the cardholder.

Debit card fraud- A debit card is one of the most important tools when it come to managing your savings accounts with the banks. The debit card holds most of the crucial information about the card holder such as the cvv, card no. etc. it can give access to the card holder’s account details, transaction history. This makes a debit card so very important and makes the card holder more vulnerable when it comes to fraud using these. If a person loses the possession of his or her debit card, they can be subject to loosing the confidential information that is associated to that card.

The level of Online transactional fraud in India

India is known to have the third most cases of online fraudulent transactions. The country has had various cases of frauds and scams where there are false deals offered, attracting customers to invest in some scheme or through a false advertisement of products that need to be pre-booked by paying a certain amount towards booking.

The most recent of such events was the Paytm KYC scam. In this particular scam people who had Paytm installed would receive messages in the name of Paytm. These messages would direct the consumer to download aa particular mobile or desktop app to facilitate the process of getting KYC done. As it turned out these apps would store the information of the users and give access to the pins of the consumer to the fraudulent party. This scam created a huge ruckus and attracted much attention of the consumer causing a great deal of loss to Paytm. Things were only made clear when the CEO of Paytm took to twitter to address the audience by saying that it was not Paytm who had sent the messages nor has Paytm tied up with any other company to facilitate the kYC process.

It is not just limited to Paytm but also to other banks such as HDFC, AXIS bank. These banks had introduced some apps to facilitate the transactions between the bankers, consumers and the traders. While these app were not in itself malware, but it did provide access to such settings that would allow hackers to access a person’s information.

Possible solutions and ways to prevent oneself from an online transactional fraud

A few basic tips that the people can follow to avoid being trapped in a fraudulent transaction are:

Not to pay upfront for any promise- There might be people presenting alluring offers, but these must not be paid for until you are sure about the authenticity of such offers/deals.

Avoiding robocalls- These days it has become a very convenient option for people to call up using hacked caller ids and extract the information or data from any person. These are mostly prevalent in case of the online transactions because the parties have not physically met.

Keep in check with the mode of payment and the success or failure of such payments. On should always check before using the card details for any online transaction. It should be confirmed that a protected browser is being used to avid any leakage of information.

One should always be skeptical about the free offers that they come across.

These days when most of the transactions with the banks are double checked by the means of the One Time Passwords that are sent to the mobile no. linked with the accounts, the banks and RBI regulates that the OTP should not be shared with anybody. They also repeatedly ensure that the bank or RBI will never call a person to ask for their bank details.

Get Legal Advice Now

Legal position of India in dealing with online frauds

The laws in India have given due consideration to the problem of online fraud. The most important of all is the fundamental right to life and personal liberty. It is under article 21 of the constitution of India and does also give the right of privacy to the people if India. By committing fraud, if not anything else, the party is encroaching upon the right to privacy of a person. Other Indian laws also provide for the protection of those who suffer damage because of this. Firstly, the consumer fids relief in the Consumer Protection Act since banking is a service covered under the purview of this act. Secondly, the Indian Penal code identifies fraud and deceit as a criminal offence making the person committing such rime liable to a punishment as prescribed in the code. The Information Technology act also takes cognizance of the online frauds as a crime and regulates as to what has to the working when providing services online in order to prevent the same. The protection of people’s data is also covered under the ambit of the recently introduced data protection bill of 2019.

In cases where the customer has been defrauded while availing the service such as online shopping, the consumer court shall have cognizance over such a matter. The consumer for a has the power to give relief of a specific nature wherever they deem appropriate to compensate the consumer. The department of consumer affairs has also come up with a National consumer Helpline that the consumer can report a complaint, seek information and advice.

If a person has been a victim to the online transactional fraud, they need to first report the issue to the bank from which they operate/ have their cards issued from. Next step would be to file a FIR with the nearest police station and there after proceed to the court for further help if the bank and the police fail to be helpful.

Conclusion

The virtual world is someplace that we cannot physically access. As the advancement of technology, it has provided the hackers/ fraudsters with a cloak of invisibility that hides them from the world that they are defrauding. They are experts / they have connections with experts who can easily guide us from one page to another without even us knowing.  The platform makes the people more vulnerable towards frauds and thus the consumers need to be more aware than ever before. The simplest of the thing need to be kept in mind while dealing on any online platform. Anyone who becomes a victim to any such scheme must take immediate action and not just wait for a solution to popup because any delay will just mean the fraudster having more time with your personal information.

How can Lawtendo help?

LawTendo has around 15000+ lawyers across India in our platform. LawTendo strives to facilitate cost-efficient and quality legal service to our clients. You can contact us at +91-9671633666 or [email protected].