Cyberfraud Losses Projected to Reach 0.7% of GDP

Source: This post on Cyberfraud Losses Projected to Reach 0.7% of GDP has been created based on the article “Cyberfraud losses could amount to 0.7% of GDP, projects Ministry’s study” published in The Hindu on 24th October 2024.

Why in news?

A recent study by the Indian Cyber Crime Coordination Centre (I4C), under the Union Home Ministry, projects significant financial losses due to cyberfraud.

Findings of the study

1. ₹1.2 Lakh Crore Loss Expected: Over ₹1.2 lakh crore is expected to be lost to cyberfrauds in India over the next year, which could account for 0.7% of the country’s GDP.

2. Major Role of Mule Accounts: Mule bank accounts play a significant role in facilitating financial scams, often used to siphon funds through multiple accounts before the money is withdrawn.

3. International Scams Linked to China: A large portion of these frauds originate from China or Chinese-linked entities. However, some scams are domestically operated, with funds withdrawn from ATMs after being transferred through several accounts.

4. 4,000 Mule Accounts Detected Daily: The I4C’s Citizen Financial Cyber Fraud Reporting and Management System identifies around 4,000 mule bank accounts every day.

5. ATM Hotspots for Fraudulent Withdrawals: Eighteen ATM hotspots have been identified across India where fraudulent cash withdrawals take place. Overseas ATM withdrawals using debit cards linked to mule accounts have been reported in countries such as Dubai, Hong Kong, Bangkok, and Russia.

6. Emergence of Scam Hubs: Scam compounds resembling call centres have emerged in South East Asian countries like Cambodia, Myanmar, and Laos. These hubs are used for investment scams, where fraudsters — often from India — make calls to unsuspecting individuals using Indian mobile numbers.

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