Tech vs Fraud: India blocks ₹660 crore in scams and axed 2.8 crore fake SIM cards | WION Decodes
&imwidth=600&imheight=450&format=webp&quality=medium "Tech vs Fraud: India blocks ₹660 crore in scams and axed 2.8 crore fake SIM cards | WION Decodes")
Tech vs Fraud: India blocks ₹660 crore in scams and axed 2.8 crore fake SIM cards | WION Decodes Photograph: (Credit: Pexels/Representative image)
Driven by the DoT’s newly launched Financial Fraud Risk Indicator (FRI) and Digital Intelligence Platform (DIP), India has averted over 4.8 million fraudulent transactions worth ₹660 crore.
Most cyber frauds rely on SIM cards, bank accounts, and digital payment media. While measures are being taken to stop these fraudulent payments, loopholes remain. In an effort to curb the number of scams, the Department of Telecommunications (DoT) launched the Financial Fraud Risk Indicator (FRI) and the Digital Intelligence Platform (DIP). Over 1,000 banks and major payment platforms like PhonePe, Paytm, and Google Pay have been onboarded. Data suggests that over the last six months, 4.8 million fraudulent transactions have been averted, amounting to over ₹660 crore. Furthermore, through these programmes, over 2.8 crore fraudulent SIM cards have been identified and deactivated.
How easy is it to get fake SIM cards?
Obtaining fake SIM cards and mule accounts has become alarmingly easy due to sophisticated cybercrime networks. For fake SIMs, fraudsters leverage advanced SIM-box networks to bypass legal telecommunication authentication, allowing them to route illicit data and establish thousands of unregistered connections simultaneously. When physical verification fails, criminals turn to identity theft. The dark web operates as an efficient, unregulated marketplace where bad actors buy and sell stolen personal data alongside identity theft tools, effectively automating the creation of fraudulent credentials.
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The role of money mules
Finally, these compromised identities feed directly into the generation of money mule accounts. Criminals easily recruit unsuspecting or complicit third parties to act as money mules, laundering illicit funds through traditional banking systems. Alternatively, they cut out the middleman entirely by deploying AI-generated synthetic identities and sophisticated deepfakes. These advanced digital fabrications easily trick modern digital onboarding processes, bypassing legacy forgery checks that institutions rely on. Together, this integrated pipeline of stolen data, automated telecom hardware, and cutting-edge artificial intelligence enables cybercriminals to rapidly scale financial fraud with minimal friction.
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Can banks increase checks?
Under regulatory frameworks, banks are mandated to perform a rigorous suite of checks starting with Customer Due Diligence (CDD), which requires identifying and verifying every customer using reliable, independent source documents. A critical component of this verification process involves obtaining and authenticating a Permanent Account Number (PAN) or Form 60 details to establish legal identity. For remote or digital onboarding, institutions must utilise the Video-based Customer Identification Process (V-CIP). To effectively counter modern fraud tactics like deepfakes and automated identity theft, this digital pipeline must strictly incorporate advanced liveness checks and mandatory geo-tagging to ensure the applicant's physical presence and prevent digital spoofing.
Once an account is active, the oversight shifts to continuous risk management. Banks must maintain ongoing monitoring, a process that regularly tracks real-time transaction patterns to ensure financial activity aligns with the customer's established risk profile and stated source of wealth. Finally, to maintain data integrity and catch evolving threat vectors, banks are required to perform periodic KYC updates. These records must be completely refreshed every two years for high-risk customers, every eight years for medium-risk individuals, and every ten years for low-risk accounts, ensuring a robust defense against financial crime.
Breakdown of the story:
- SIM-Box Exploitation: Fraudsters bypass legal telecom routes using SIM-box networks to run thousands of unregistered connections simultaneously.
- Dark Web Marketplaces: Criminals buy and sell stolen personal data and identity tools to automate fraudulent credential creation.
- Money Mules: Networks recruit third parties to launder illicit funds through traditional banking systems.
- AI & Deepfakes: Bad actors deploy synthetic identities and deepfakes to trick digital onboarding and bypass legacy forgery checks.
- Customer Due Diligence (CDD): Banks must verify identities using independent sources and authenticating PAN or Form 60 details.
- V-CIP Integrity: Digital onboarding requires video identification paired with mandatory geo-tagging and liveness checks to prevent spoofing.
- Ongoing Monitoring: Automated system tracking of real-time transactions to ensure activity matches a customer's risk profile and wealth source.
- Risk-Tiered KYC Updates: Mandatory periodic record refreshes every 2 years for high-risk, 8 years for medium-risk, and 10 years for low-risk profiles.
