It is surprising, and deeply disturbing, that the Supreme Court’s evident anxiety over the rapid rise of so-called “digital arrest” frauds is not matched by a similar sense of urgency on the part of the Central and state governments. The gravity of the problem was underlined by a report cited by a three-judge bench headed by Chief Justice Surya Kant. Bank customers have lost an astonishing Rs 52,000 crore to such fraudulent transactions in four years. The figure is staggering—so large that, as the court itself noted, it exceeds the annual budget of several states. Yet, despite the enormity of the losses and the devastation caused to individual lives, little appears to have been done to prevent these crimes. As in many other areas of public policy, prevention has been neglected in favour of post-facto lamentation.
It is telling that a standard operating procedure (SOP) to deal with digital arrest frauds was formulated only in early January, and that too under the initiative of the court. If the authorities concerned were genuinely alarmed, the SOP should have been implemented without delay. Instead, bureaucratic inertia has prevailed, forcing the court to step in once again and direct that the SOP be put in place within a month. The court’s sharp criticism of the Reserve Bank is also significant. Merely advising banks to “be more vigilant” is an abdication of responsibility. Banks respond not to sermons but to accountability. Unless responsibility is clearly fixed and negligence attracts financial consequences, exhortations will remain meaningless. At present, banks suffer no loss when a customer is wiped out in a single fraudulent transaction. That moral hazard explains their indifference. The victims are often retired, lonely, and vulnerable individuals who lose their life’s savings overnight. Fraudsters exploit a basic human fear: the dread of arrest, which becomes more acute with age. Despite repeated public warnings, many still do not know that no one can be “digitally arrested” and are coerced into paying money for release. The criminals thrive on this ignorance and fear.
Law enforcement agencies, though equipped with cybercrime units, also appear reluctant to pursue cases aggressively, especially when fraud networks use layered systems to move money across accounts and jurisdictions. What the court has sensibly suggested is a preventive mechanism: if a pensioner, who usually withdraws a modest monthly sum, suddenly seeks to transfer several lakhs, the system should raise a red flag, delay the transaction, and alert both the customer and bank officials. Banks already possess detailed customer profiles. Incorporating such safeguards is neither technologically difficult nor prohibitively expensive. Alerts to branch managers and accounts departments for suspicious transactions should be mandatory. Banks have a duty to protect their customers’ interests, and no cost incurred in that effort is too high.
