Supreme Court orders crackdown on digital arrest scams, faster money recovery
The Supreme Court has ordered a coordinated nationwide response to "digital arrest" scams, directing banks, financial intermediaries and law enforcement agencies to work together to
The Supreme Court has ordered a coordinated nationwide response to "digital arrest" scams, directing banks, financial intermediaries and law enforcement agencies to work together to prevent fraud and help victims recover money lost to cybercriminals. The top court has asked an Inter-Departmental Committee to consult banks and intermediaries on measures to tackle the growing fraud method, while also seeking stronger mechanisms to identify and block mule accounts used to move defrauded funds. Read Full Story The directions came as the Supreme Court sought a more effective institutional response to cyber fraud, including faster grievance redressal, restoration of money and greater public awareness.
RBI GETS FOUR WEEKS TO FRAME SOP ON MULE ACCOUNTS The Reserve Bank of India has been directed to frame a Standard Operating Procedure on mule accounts within four weeks. Mule accounts are bank accounts used by fraudsters to receive, transfer or route money obtained through scams. The court's direction is aimed at strengthening the response to accounts that facilitate the movement of money after victims are defrauded. STATES TOLD TO STRENGTHEN CYBER FRAUD RESPONSE The Supreme Court has directed states to operationalise cyber fraud grievance and money restoration mechanisms so that complaints can be acted upon and efforts to recover defrauded money can begin more effectively.
States have also been asked to adopt the e-Zero FIR system, alongside measures to intensify public awareness about cyber fraud and digital arrest scams. The directions seek to ensure that victims are not left navigating fragmented systems after losing money to fraudsters. CENTRE ASKED TO EXAMINE VICTIM COMPENSATION FRAMEWORK The top court has also asked the Centre to examine the possibility of creating a shared liability and victim compensation framework for cyber fraud cases. The move could bring banks, financial intermediaries and other stakeholders into a more coordinated framework for dealing with losses arising from digital fraud.
With the latest directions, the Supreme Court has sought to bring together financial institutions, regulators, state authorities and law enforcement agencies in a broader effort to prevent digital arrest scams and improve the chances of recovering money once a fraud has taken place. Ends
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