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Fraudsters Most Active During Peak Hours: HDFC Bank Study

Even though online transactions are gaining traction following the surge in adoption of digital technology caused by the pandemic, fraudsters also appear to have become active during peak hours between 7 a.m. and 7 p.m. The timing is contrary to the widely held perception that frauds only happen in the middle of the night.

This was revealed in an analysis of fraud litigation time by HDFC Bank. Analysis shows that more than 70% of cyber fraud occurs between 7 a.m. and 7 p.m. The study further reveals that more than 80% of the affected customers belong to the age bracket of 22 to 50 years old, which would be in the most tech-savvy age bracket.

According to Manish Agrawal, Head – Credit Intelligence and Control, HDFC Bank, there has been unprecedented growth in the digital economy – financial and non-financial transactions. In all areas of our life, even though we do not conduct financial transactions, we save information, thereby creating a network or pool of information that is open source information. This information could be misinterpreted or misused by fraudsters.

In the majority of cases, it is the vulnerability in the minds of customers that fraudsters exploit, not that of the banking system. “Nearly 90% of cases where customers lose their money are because they’ve been compromised,” Agrawal said. Activity area.

More than 70 percent of the victims are men, and almost three-quarters of the total number of victims come from metro and urban centers, while the rest come from rural and semi-urban areas, according to the study. The data above is for the period from April to September 2021 and covers disputes related to bank fraud and UPI.

According to the study, fraudsters exploit the mind of the target through a social engineering technique and trick them into sharing their credentials and OTPs. “Over 70% of cyber fraud occurs through social engineering tactics, where the modus operandi is through the GTH (Greed, Threat, Help) mechanism. Fraudsters use them to exploit the minds of customers,” he said, emphasizing the need to be cautious and on guard.

RBI Fraud Data

The Reserve Bank of India, in its India Banking Sector Trends and Progress Report 2020-21, said, “The pandemic has brought about a shift in the adoption of digital technology with multi-faceted opportunities in the financial sector, while posing some challenges of tackling cybersecurity/fraud to all stakeholders including regulators and supervisors. »

The total number of frauds, which stood at 6,798 or ₹71,534 crore in 2018-2019, increased to 8,703 or ₹1,85,468 crore in 2019-2020. However, in 2020-21, there was a drop in the number of frauds to 7363 and the total amount involved was ₹1,38,422 crore. In FY2019, the total number of card/internet channel related frauds was 1,866, and the amount involved was ₹71 crore. The number increased to 2,677 in the financial year 2020, and the total amount stood at ₹129 crore. In FY21, this number saw a marginal decline to 2,545, standing at ₹119 crore, according to data available in the RBI trend and progress report.

From April to September 2020-21, the total number of frauds stood at 3,499 totaling ₹64,261 crore, while card/internet frauds were 1,247 totaling ₹49 crore. Although the total number of frauds increased to 4,071 from April to 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 or ₹60 crore.

“In terms of area of ​​operations, an overwhelming majority of cases reported in 2020-2021 in terms of the number and amount involved related to advances, while fraud involving card or internet transactions accounted for 34.6% of the number of case,” the RBI said the report.

It should be noted that all these data are frauds of ₹1 lakh and above. Agrawal thinks this could be the tip of the iceberg, as the most minor value frauds can often go unreported.

Published on

February 06, 2022