Online scammers are finding a fertile market in India as the internet spreads

Ravindra Gaikwad did what the cyber police are supposed to do when investigating an online scam: he tracked the money.

What initially seemed like a simple scam in his small West Indian town eventually sent him on a 2,000-mile journey across three Indian states.

Only now did he begin to understand how sophisticated such criminal enterprises were becoming in his country.

“Scammers across India are taking advantage of gullible people in small towns and villages where internet and smartphones have only recently become commonplace,” he said.

India has long had a reputation for being a home for online scammers targeting victims in much wealthier countries such as the United States. Last year, federal prosecutors in Georgia announced charges against several Indian-based call centers and their directors, accusing them of conspiracy to route tens of millions of fraudulent calls to American consumers.

“These call centers based in India allegedly scared their victims and stole their money, including some victims’ savings,” said the US attorney at the time. said Kurt Erskine of the Northern District of Georgia at the time.

Now, with the rapid spread of the internet in developing countries, India is proving itself a fertile market for its native scammers.

About 47% of the population has access to the internet today, compared to 15% eight years ago. Even small restaurants in cities and towns have switched to contactless payment – a trend that was limited to large cities until a few years ago.

According to Internet and Mobile Assn. in India, about half of India’s 692 million active Internet users conduct online transactions. The group’s 2022 report projected that India would have 900 million active internet users by 2025, meaning the untapped market for fraud is booming.

In turn, cyber crimes are on the rise, such as phishing, password spoofing, convincing victims to download screen surveillance programs, or setting up fake UPI links and QR codes.

From March 2018 to December 2021, India reported more than 250,000 cyber fraud cases involving about $96 million, the finance ministry told lawmakers last year. Only $7.8 million of that was recovered.

Devidas Tuljapurkar, co-secretary of All India Bank Employees Assn., follows the rise of Digital India, a program launched in 2015 by Prime Minister Narendra Modi.

“Digital India should have gone hand in hand with digital literacy,” he said. “But that has not happened and a large part of society has not yet experienced online financial transactions. This vulnerability is being exploited. Online fraud has become an industry.”

While cybercrime is still much more prevalent in the United States, which reported $3.3 billion in online fraud in 2020 alone, the rise is all the more surprising in a country where 90% of the population earns less than $300 a month .

Gaikwad, 49, was leading the cyber cell investigation unit in the town of Beed, Maharashtra, last March when the principal of a local Urdu secondary school said he had been duped.

Last December, Mohammad Abdul Rahim (52) was accidentally added to a WhatsApp group from an unknown phone number.

The name of the group intrigued him: KBC. It is short for Kaun Banega Crorepati – the popular Indian version of Who Wants to Be a Millionaire. Shortly after being added to the group, Rahim received a video message congratulating him on winning $30,000 and a car.

Rahim was confident in the authenticity of the message, in part because it contained a neatly designed poster of the game show. The message was followed by a phone call. If he wanted to accept the offer, the interlocutor said, he would have to deposit money for taxes.

Over the next two days, Rahim sent about $2,100 in three installments via Google Pay.

Over a three-month period, scammers used an effective combination of threats and enticements to force Rahim to pay more than $35,000, completely draining his bank account.

When Rahim asked about the car and the money, he was told to keep calm and not tell anyone about the lottery. In this case, he was told that his file would be closed, meaning he would lose the amount deposited and also miss the lottery.

“So I kept sending them money,” Rahim said. “I feel stupid and ashamed.”

Gaikwad’s initial investigation of the phone numbers and bank account details led him to five 21-year-old men from Bihar state, 1,800 kilometers to the east.

“They used to manage several such bank accounts,” Gaikwad said. “It was their job to take money out of those accounts and forward it.” The five have been arrested and are currently out on bail as the case continues.

However, it is believed that they are small fish. Three of the five worked as laborers and two still went to school. Their role ended with raising money, which they received from petty victims like Rahim. In return, they received a commission of about $70, which the authorities charged.

Gaikwad then found four men who he said were processing the money collected in Bihar. The men, aged between 22 and 28, were from West Champaran, another district of Bihar. One of them, with a master’s degree in technology, managed 150 bank accounts himself, authorities said. These four have also been arrested, charged and are in prison.

According to Gaikwad, most of the victims are people from small towns and villages with a modest income.

“Even a seemingly minor betrayal can destroy a family’s stability,” he said. “We try to educate people about online fraud. Until then, we do not recommend online transactions on weekends or after 5 p.m. when banks are closed. That slows down the investigation.”

Sheetalkumar Ballal, the current superintendent of police at Beed’s cyber investigation unit, said the chances of getting the money back are higher if the victim comes forward within the first hour.

“We call it the golden hour,” he said. “The money often gets stuck at the payment gateway after the transfer. It’s easier to get the money from there. Otherwise we will hunt people from different parts of the country.”

In October 2022, Gaikwad and his team arrested the four West Champaran men who helped them follow the money trail.

From Bihar it went through several bank accounts and finally stopped at a dealership in Surat – 2000 kilometers west of Gujarat state. The dealer received $1.5 million from various accounts controlled by the four West Champaran men.

Gaikwad called the merchant in for questioning. He expected to complete the investigation after figuring out what he believed to be the final piece of the puzzle. The jumble of bank accounts gave him sleepless nights. But after almost a year, he was finally done.

Except the dealer had no idea about the scam.

Impressed, Gaikwad concluded that the money was payment for the embroidered clothes he exported to Pakistan. “Here is the kingpin,” said Gaikwad.

A suspect has been identified in Pakistan. He is believed to have coordinated with the four West Champaran men and ordered them to pay for the garments he was to import from various merchants in Surat. These traders had an agent who managed their accounts.

The agent took money from the accounts held by the West Champaran men and passed it on to the traders depending on their export orders.

“Traders thought they were being paid for their exports,” Gaikwad said. “But it was paid with scammed money from different parts of India. The man in Pakistan would get his embroidered clothes practically for free.”

The police cybercell unit does not have the authority to arrest a suspect in another country, so despite the progress, Rahim has yet to recover his money, equivalent to three years’ salary.

“I’m struggling to pay my monthly installments,” says Rahim, who lives in Beed with his wife and two adult daughters. “The money I lost in the scam was my home loan. I feel like I’ve let my family down.”