Digital Arrest Scam: A Growing Threat to Banks and Customers – Govt Sends Notices, Investigation Begins

The Digital Arrest Scam has become a rising menace in India's cybercrime landscape, now drawing serious attention from authorities. Victims across the country have lost crores of rupees, and now the National Consumer Disputes Redressal Commission (NCDRC) has taken a strong step—sending legal notices to banks involved in these cases. This includes not only the victim’s banks but also the banks that received the fraudulent funds.

🔍 What is the Digital Arrest Scam?

This cyber fraud involves criminals posing as officials from agencies like the CBI, police, or RBI. They falsely accuse victims of involvement in crimes like money laundering or drug trafficking, then keep them virtually "detained" via long video calls, often lasting 24–48 hours.

Key Steps in the Scam:

Initial Contact: Victims receive WhatsApp messages, calls, or video chats from scammers posing as officials.

Fear Tactics: They use fabricated stories involving fake FIRs, intercepted parcels, or crimes linked to the victim's PAN or Aadhaar.

Digital Detention: Victims are told they are under “digital arrest” and are not allowed to talk to anyone.

Extortion Begins: Criminals demand large sums to “settle” the case, using UPI, crypto, or gift cards.

Emotional Pressure: Fear, shame, and isolation cause victims to comply—resulting in huge financial losses.

🚨 Mumbai Case: ₹5.88 Crore Lost

One such shocking incident in Mumbai involved a victim who was digitally detained and conned out of ₹5.88 crore. Following such cases, the NCDRC has sent notices to the concerned banks, questioning their compliance with RBI guidelines and their lack of due diligence—a first-of-its-kind action in India.

🧾 NCDRC's Stand

On March 3 and July 7, the commission admitted petitions from multiple victims. It stated that, if necessary, it could seek support from:

• Financial Intelligence Unit (FIU)

• Indian Cyber Crime Coordination Centre (I4C) under the Ministry of Home Affairs

Victims’ lawyer Mahendra Limaye confirmed that notices were issued to all relevant banks, including those that received the fraudulent funds.

🏦 Banks Under Scanner

The probe will now focus on:

• Violations of RBI rules

• Negligence in customer protection

• Failure to flag suspicious transactions

This marks a shift from blaming only the victim to holding financial institutions accountable for lapses in fraud detection and customer protection.

⚠️ Why It’s More Than Just Cybercrime

The scam exposes deep flaws in the banking system’s digital security. As banks aggressively promote online services, customer safety has become a legal responsibility. The outcome of this investigation could set a new precedent for consumer rights in cyber fraud cases.

✅ What Should Customers Do?

• Never share OTPs, bank details, or PAN over calls.

• Verify identities of any so-called officials.

• Immediately report suspicious calls to the cybercrime helpline (1930).

• Inform your bank and file a complaint at cybercrime.gov.in

🔚 Final Note

The Digital Arrest Scam is not just a wake-up call for individuals—it’s a serious question mark on digital financial systems. With government bodies stepping in, victims now have a fighting chance for justice and recovery.