Learn about the rising threat of bank account freeze by cyber crime police, linked to cyber fraud investigations, and the legal implications for individuals and businesses, leading to unexpected financial disruptions.
Cybercrime is evolving, and its impact on businesses and individuals can be devastating. In today’s digital age, where transactions happen at lightning speed, cybercriminals are exploiting vulnerabilities and leaving both businesses and individuals in a precarious position.
This post explores recent cases of cyber fraud that have not only duped victims of their hard-earned money but also led to the freezing of bank accounts.
Rising Threat of Bank Account Freeze by Cyber Crime Police
In recent times, the banking sector has been grappling with a disturbing trend: bank accounts being frozen following dubious cyber complaints. One Transaction, One Cyber Complaint, and Your Account is Frozen. This issue has been particularly prevalent among individuals involved in cryptocurrency transactions, but it’s increasingly affecting a broader range of banking activities.
In today’s digital world, while UPI and bitcoin trading offer convenience, they also attract potential risks. When cybercriminals engage in financial fraud, they often transfer money across various accounts to hide their trail, making it difficult for law enforcement to track them down. This prompts the freezing of multiple accounts, even those indirectly linked to the fraudulent transactions.
There have been significant advances in this scheme, which now not only affects cryptocurrency transactions but also has the potential to target anyone with a UPI-activated bank account. The question arises: how can a single transaction or complaint lead to your account being locked, and what can you do to protect yourself?
How It Happens – Modus Operandi
Scammers are employing a variety of tactics to exploit the system. One common method involves depositing a small amount of money (even as little as ₹500 to ₹5,000) into a victim’s bank account. The scammer then files a cyber complaint alleging that the money was obtained through fraudulent means. In many cases, this complaint can lead to immediate action by law enforcement, resulting in the freezing of the victim’s bank account.
The impact of such fraudulent complaints can be severe. Take the case of a P2P Trading incident where a person engaged in a peer-to-peer (P2P) transaction and subsequently transferred the funds to another account. Despite this being a legitimate transaction, the bank froze the funds due to a cybercrime complaint. The friend has been unable to access the money for months, and contacting the cybercrime department has proven challenging.
In another incident, a woman visited a jewelry store, selected the jewelry, and informed the jeweler that the payment would be made by her brother, who is in a different city. She asked for the QR code from the jeweler. The payment was made using the QR payment facility. However, the next day, the jeweler’s bank account was frozen by the cybercrime police, leaving the jeweler without access to his legitimate funds. Certainly, many of you have encountered or heard of similar scams.
The rising threat of bank account freezes by cybercrime police may affect anyone with a UPI-activated bank account. With mobile numbers often linked to bank accounts through UPI apps, scammers can easily identify and exploit victims. Once a complaint is filed, the account may be frozen as a precautionary measure while the investigation unfolds. Unfortunately, resolving these issues is not always straightforward, and accounts can remain frozen for extended periods.
Real-Life Horror Stories of Cyber Crime Fraud
From jewellers to small traders, the reach of cybercrime has expanded, and the consequences are severe. Below are notable case studies that highlight the growing menace of cyber fraud in India:
Jeweller’s Account frozen with Rs 3.55 Lakh: In a high-profile cybercrime case, a jeweller from Mumbai, found himself entangled in a sophisticated fraud. The scam began when a customer visited his shop, selecting gold worth Rs 3.55 lakh, and promised payment by evening. The jeweller received the full amount, only to have his account frozen soon after.
Upon investigation, it was revealed that the Rs 3.55 lakh was part of a cybercrime, with the money linked to fraudulent activities conducted by the so-called customer. The Gujarat police froze the jeweller’s account as it was being used to park illicit funds. The jeweller’s predicament was further complicated when two other jewellers from Mira Road and Goregaon fell victim to the same scam, perpetrated by the same individual. Newslink is here!
Lesson: This case highlights the need for heightened vigilance with large transactions, particularly when dealing with unfamiliar or suspicious customers.
Jeweller Loses Rs 5 Lakh to Cyber Fraud: A jeweller from Malad, Mumbai, fell victim to another cybercrime when two individuals posing as customers purchased gold bars and jewellery worth Rs 5 lakh using RTGS (Real-Time Gross Settlement). The shop owner received a confirmation message, only to later learn that his account was frozen due to a cyber fraud case in Telangana. The money transferred to his account was linked to fraudulent activities involving a victim named Sai Kiran in Telangana. Newslink is here!
Lesson: Online payment methods, even those verified like RTGS, can be manipulated by fraudsters. Businesses should confirm the legitimacy of large transactions, especially those involving interstate transfers.
27 Diamond Companies Accounts Frozen: In one of the largest cybercrime cases in August 2023, 27 diamond manufacturing and trading companies in Surat had their bank accounts frozen due to a cyber fraud investigation by police forces in Kerala and Telangana. These companies were informed via notices from their banks, with instructions to refrain from any transactions until further investigation. The firms have reached out to the Surat City Police, claiming they were not informed of any wrongdoing and were caught in the crossfire of a larger fraud investigation. Newslink is here!
Lesson: Businesses engaged in global financial transactions must maintain strong due diligence to avoid being implicated in cybercrime-related activities.
Kerala Poultry Vendor’s Account Frozen: In a smaller yet significant case, Navas, a poultry vendor in Kerala, found his bank account frozen after a series of failed UPI transactions. Upon inquiry, he learned that his account had been frozen on the orders of the Gujarat cyber police. The freeze was due to a previous transaction involving his son-in-law’s account, which had unknowingly been part of a cybercrime investigation. Navas was one of many small traders in Kerala whose accounts were frozen despite having no direct involvement in any crime. Newslink is here!
Lesson: The interconnected nature of digital transactions means that even minor transactions can lead to severe consequences. This underscores the need for transparency from financial institutions when freezing accounts to ensure that innocent individuals are not unfairly penalized.
UPI Linked to Bitcoin Trading Scam: A family in Ahmedabad found themselves in a distressing situation when their bank accounts were frozen due to a UPI-linked bitcoin trading scam. The family’s teenage son had been using their UPI account to purchase bitcoin occasionally. This innocent activity led to their UPI account being linked to an online fraud case. The police, in response, froze not only their personal bank accounts but also those of people and businesses they transacted with, including a grocery store and a gym. Newslink is here!
Lesson: Exercise caution with digital payment systems like UPI, particularly for high-risk transactions such as cryptocurrency trading. It is advisable to use separate accounts for such transactions and to regularly monitor for potential fraud.
UPI Payments Leading to Frozen Bank Accounts: In Kerala, a hotel accepted a UPI payment from a customer for a meal, only to discover that the UPI account was linked to an online fraud. This led to the freezing of the hotel’s bank account, the chicken supplier’s account, and even the supplier’s father-in-law’s account. Incidents like these have become more frequent across India, where individuals, businesses, and even casual connections face the consequences of financial fraud through no fault of their own. Newslink is here!
Lesson: Even accepting payments via UPI can lead to complications if the payer’s account is involved in cybercrime. Businesses should be aware of these risks and have legal advice ready to handle such situations.
Cybercriminals Exploiting Man-in-the-Middle Attacks to Defraud Businesses: In Mumbai, cybercriminals defrauded a cooperative bank by impersonating a jewellery shop owner and tricking the bank into transferring Rs 18 lakh to their accounts. The scammers intercepted communication between the shop and the bank, using a fake email ID similar to the shop’s legitimate email. The bank, believing the request was genuine, transferred the money, only realizing the fraud when the real shop owner visited to inquire about the unauthorized transaction. Newslink is here!
Lesson: Implement additional security protocols for verifying large transactions, especially those requested via email. Using multi-factor authentication (MFA) and regularly educating staff on phishing and cyber-attack risks can help prevent such incidents.
The Ripple Effect – What Happens After Account is Frozen?
So, what happens after your account is frozen? The repercussions can vary:
- No Banking Activities: When a bank account is frozen, the account holder cannot perform normal banking activities, although the balance remains visible. Here’s what happens to a frozen account:
- The account holder cannot withdraw funds, make purchases, or transfer money
- Scheduled payments and transactions are also paused
- Scammer’s Benefit: Scammers may try to coerce victims into paying a settlement to unfreeze their accounts, exploiting the situation for financial gain.
- Collateral Damage: In cases where stolen funds are moved through multiple accounts, innocent third parties may find their accounts frozen as well, leading to significant inconvenience and potential financial loss.
- Corruption and Bribery: In some regions, the issue is exacerbated by corruption. Bank officials and law enforcement may engage in unethical practices, such as blocking accounts to create a situation where victims must pay bribes to have their funds released.
How To Protect Yourself from Freezing of Bank Accoount
The above cases demonstrate that cybercrime is a growing menace that affects businesses and individuals alike. Whether it’s a jeweller in Mumbai or a small trader in Kerala, no one is immune to the reach of digital fraudsters. Given the risks, it’s essential to take proactive steps to protect your bank account.
Here are some steps to protect yourself from falling victim to such fraud:
- Use UPI Aliases: Instead of linking your mobile number directly to your UPI ID, consider using an alias to reduce the risk of targeted attacks.
- Monitor Your Accounts and Activity: Regularly review your bank statements and transaction history to identify any unusual activity. Any discrepancy should be reported immediately to your bank.
- Verify Online Transactions: Always verify large transactions, even if payment confirmations are received. Cross-check with your bank before releasing goods or services.
- Be Cautious with Sensitive Information: Ensure that your Aadhaar, PAN, and other identification documents are secure, and only share them with trusted individuals.
- Know Your Customer (KYC): For businesses, conducting thorough KYC checks on new customers can prevent fraudulent transactions.
What to do When Bank Account is Frozen by Cyber Cell?
If your bank account has been frozen, it’s crucial to act swiftly and understand your legal rights. Here are the steps you should take:
- Contact the Bank Immediately: Reach out to your bank to understand the reasons for the freeze. Request a copy of the instructions from law enforcement or relevant authorities that led to the account freeze.
- Seek Legal Representation: If your bank account is frozen due to cybercrime complaint, promptly reach out to the cyber police and bank authorities to collect all the informations. Consult with a lawyer immediatly to understand the issue, your rights and legal remedies. In a simple case, filing a complaint with the RBI Ombudsman may help expedite the resolution process to ensure that your funds are restored as quickly as possible. But in most cases, only a lawyer can help you file a formal representation with the relevant authorities or court to unfreeze your bank account.
- File for a Writ of Mandamus: Consider filing a writ petition if you believe the account freeze is unjustified or infringes upon your rights. This legal action requests the court to compel the bank to lift the freeze on your account.
- Cooperate with Investigations: Work with authorities while ensuring your legal rights are safeguarded. If only part of your funds are under suspicion, insist that only the relevant portion be frozen.
Conclusion
The freezing of bank accounts due to cyber complaints is a growing concern, reflecting broader issues of digital security and systemic abuse. While the situation may seem dire, staying informed and taking preventive measures can help safeguard your financial stability. If you or someone you know faces such a challenge, prompt action and legal assistance are crucial in navigating these turbulent waters.
As digital transactions continue to grow in popularity, it’s essential to stay vigilant and take proactive steps to protect yourself from becoming the next victim of these scams. By learning from recent cases like those of the jewellers in Mumbai and the diamond traders in Surat, you can better understand the tactics used by fraudsters and the importance of staying informed and prepared.
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