Surge in online fraud this festive season; Tips to stay vigilant!

Amid the festive season, online frauds have surged 20-25%, driven by increasingly sophisticated tactics powered by Artificial Intelligence. With mobile wallets, UPI payments, and online shopping hitting record levels, both users and platforms face heightened risks during this peak period. Recent statistics reveal a year-on-year rise in phishing attacks in India, especially during the festive season.

The Ministry of Finance reports that losses due to cyber fraud surged to ₹177.05 crore in FY24, up from ₹69.68 crore recorded the previous year. According to RBI's annual report released in May, FY24 saw a surge in digital fraud cases in banks, reaching 36,075 incidents—an increase of almost 166% compared to the 13,564 cases recorded in FY23.

The majority of frauds, especially UPI scams involving smaller amounts, go unreported. Users often let their guard down during festive sales, lured by enticing offers and limited-time deals.

In sectors like e-commerce and travel, which experience heightened online traffic during the festive season, India is a prime target for web scraping. While active social engineering is one method of extracting information, malicious bots account for 42% of overall web traffic during this time, with 65% of them identified as harmful. This harvested data is sold on platforms like Telegram for as little as ₹150 to ₹200.

During festive seasons, one of the most prevalent fraud tactics involves fake coupon and promo links. Lured by offers that seem too good to be true, consumers caught up in shopping frenzy often click on these links and find themselves in trouble. Victims don't even need to enter their information; a simple click can install malware on their device, such as a remote desktop app or screen recorder, granting scammers access to their phone.

In an attempt to address delivery fraud, where customers received wrong items like bricks instead of phones in orders, Flipkart introduced an ‘Open Box Delivery’ system designed for high-value products, allowing customers to inspect their purchases before accepting them. “Our focus is on combining customer-centric policies with cutting-edge technology to ensure a secure shopping experience for our customers and sellers alike. Our Open Box Delivery system allows customers to inspect their purchases before accepting them, ensuring transparency and reinforcing trust in every transaction,” says Flipkart spokesperson.

Scammers bait customers with messages offering irresistible deals, often flaunting flashy discounts or exclusive gifts to lure clicks and steal information. These tempting messages, like “Click on the link and claim your free gift now!” or “Click here and claim your ₹10,000 gift card!” are crafted to entice unsuspecting users into sharing their details.

Fraudsters go to great lengths to pose as authentic representatives. A fake SMS might include a ‘customer support’ number, and the scammer on the line may introduce themselves as your ‘account manager.’ To seal the deal, they might request a small ‘logistics fee’ to release a so-called free gift you’ve supposedly won. 

To steer clear of these traps, consider following a few key steps:

- Don’t click on any links

- Don’t call back the number

- Don’t forward the message

- Don’t provide personal or financial information

- Don’t scan any QR code until you’re sure it’s safe

- Reach out to the National Cyber Crime Reporting Portal (NCRP) at 1930

- Reach out to customer care at 044-45614700 to verify any suspicious claims. When you call, be sure to share details such as the fraudster's phone number and any screenshots of the messages you've received.

Scammers are constantly evolving their tactics. One emerging scam involves receiving a call that starts with a voice message purporting to be from the Telecom Regulatory Authority of India (TRAI). The message warns that the connection will be terminated in a few hours due to unauthorised usage of your mobile phone. The call then redirects you to TRAI’s customer service, where an operator instructs you on the next steps.

On other occasions, the call may come from customs, claiming that a parcel containing drugs and illegal items has been sent under your name. To have the charges dropped, you may be asked to pay a significant amount.

A recent incident in Mumbai revealed a social engineering scam where fraudsters posed as police officers, using fabricated legal threats over video calls to extort funds from victims. This scheme reportedly amassed ₹200 crore. Such scams typically involve psychological manipulation through phishing or impersonation to trick victims into sharing sensitive personal or financial data or to gain unauthorised access to computer systems.

A 2023 study by cybersecurity firm McAfee reveals that over 43% of Indian consumers are inclined to immediately take advantage of appealing deals during the bustling festive shopping season. Reports indicate that from February to October 2023, complaints related to QR code scams surged by approximately 226%.

Monitoring bank accounts and payment histories closely is crucial to detect unauthorised transactions promptly. Filing a complaint with the respective bank, the RBI, and local police within three days is essential.

AI can play a crucial role in fraud prevention by identifying anomalies through an analysis of users' digital footprints and verifying whether their behaviours match their claims. "By continuously learning from new data, AI algorithms can detect suspicious activities, such as unusual transaction patterns, deviations in user behaviour, biometric inconsistencies, or location discrepancies, thereby stopping fraud before it happens," states Bureau ID's spokesperson.

AI-driven identity systems can compare users' facial features with their ID documents, assess their typing speed and mouse movements (behavioural biometrics), and identify atypical login patterns, such as accessing accounts from new devices or unfamiliar locations.

AI algorithms can examine transaction networks to detect patterns indicative of money laundering, such as numerous small transactions across various accounts. Compared to traditional rule-based methods, AI can monitor these activities more efficiently, providing a quicker and more precise approach to identifying money mules.