Even as online transactions gain traction on the back of the pandemic-led surge in the adoption of digital technology, fraudsters also seem to have become active during the peak business hours between 7 AM and 7 PM, covering 70 per cent of cyber frauds. The timing is contrary to the widespread perception that frauds happen only in the middle of the night.

This has been revealed in a fraud dispute time analysis by HDFC Bank. The analysis shows over 80 per cent of the affected customers are in the age group of 22-50, who supposedly belonged to the more tech-savvy age bracket.

According to Manish Agrawal, Head-Credit Intelligence and Control, HDFC Bank, there has been an unprecedented growth in the digital economy – financial and non-financial transactions.

In every walk of our life, even if we are not doing financial transactions, we are saving information, thereby creating a web or pool of information which is open source intelligence. This information could be misconstrued or misused by fraudsters, he said.

‘Vulnerable customers’

In a majority of the cases, it is the vulnerability of the mind of customers that the fraudsters exploit and not that of the banking system. “Nearly 90 per cent of the cases where customers lose their money are because they have been compromised,” Agrawal told BusinessLine.

More than 70 per cent of the victims are male, and nearly three-fourths of the total victims are from the metro and urban centres, while the remaining are from rural and semi-urban geographies, the study said. The above data is for April-September,2021, covering net banking and UPI fraud disputes.

According to the study, the fraudsters exploit the target’s mind through a social engineering technique and make them share their credentials and OTP.

“More than 70 per cent of cyber frauds are happening through social engineering tactics, where the modus operandi is through GTH (greed, threat, help) mechanism. The fraudsters use these to exploit the mind of customers,” he said, highlighting the need to be cautious and be on guard.

RBI data on frauds

The Reserve Bank of India, in its Report on Trend and Progress of Banking in India 2020-21 said, “The pandemic has brought about a shift in adoption of digital technology with multi-faceted opportunities in the financial sector, while posing certain challenges of tackling cyber security/ frauds to all stakeholders including regulators and supervisors.”

The total number of frauds, which stood at 6,798, amounting to ₹71,534 crore in 2018-19, increased to 8,703 amounting to ₹1,85,468 crore in 2019-20. However, in 2020-21, there was a decline in the number of frauds at 7,363 and the total amount involved was ₹1,38,422 crore.

In FY-19, the total number of frauds pertaining to card/internet channels was 1,866, and the amount involved was ₹71 crore. The number increased to 2,677 in FY-20, and the total amount stood at ₹129 crore. In FY-21, this number witnessed a marginal decline at 2,545, amounting to ₹119 crore, as per data available in the RBI trend and progress report.

During April-September 2020-21, the total number of frauds stood at 3,499 amounting to ₹64,261 crore, while the card/internet frauds were at 1,247, totalling ₹49 crore. Though the total number of frauds increased to 4,071 during April-September 2021-22, the amount involved was much lower at around ₹36,342 crore. However, the number of card/internet- related frauds increased to 1,532, amounting to ₹60 crore.

“In terms of area of operations, an overwhelming majority of cases reported during 2020-21 in terms of number and amount involved related to advances, while frauds concerning card or internet transactions made up 34.6 per cent of the number of cases,” the RBI report said.