According to the findings of the report '2024 Digital Banking Fraud Trends in India' by BioCatch, a leader in digital fraud detection powered by behavioral biometric intelligence, third-party bank account takeover accounts for 55% of all fraud in India, surpassing social engineering scams.

How do scammers defraud you?

Phishing or smishing attacks are the most effective forms of third-party fraud, in which users click on links they think to be legitimate and provide their personal information/credentials.

The victim receives an email or phone call from someone acting as their bank, informing them that KYC checks are required on their account. By clicking a link, the victim is taken to a phishing website where they enter their information, including bank credentials, or worse, malware is downloaded that takes their credentials as they log in to the bank website/mobile app.

What do the fraudsters do next?

Once the fraudster gets a victim's credentials, they can freely access that person's bank account and execute transactions, frequently without restriction. Their primary goal is to execute payments, but fraudsters also obtain loans and cash them out. "With the exponential rise in Unified Payments Interface, we're also seeing fraudulent payments on this platform - although these tend to be low in value (50% of reported frauds via UPI are below Rs 10,000," according to the research).

Mule accounts are on the rise. According to the research, the number of mule accounts used in these frauds has increased, which is worrying. Mule accounts are owned by individuals who have been misled by fraudsters into laundering stolen/illegal funds through their bank accounts. When such crimes are recorded, the "money mule" is the focus of investigations due to their involvement. A recent prominent case in Bengaluru saw the arrest of individuals managing 126 mule accounts tied to various cybercrimes across India, demonstrating the scope and complexity of the problem.

Preliminary research of one of these cases revealed that the fraudsters used a device shared by four other alleged mule accounts. This is frequent in mule networks that operate a large number of accounts. 

"In India, real Indian nationals open mule accounts and then sell the usage of the accounts (the "Accomplice" persona). "This makes the account harder to detect during onboarding," according to the report.

"Every device found to participate in mule activity in India logged into an average of 35 accounts each," according to the report. BioCatch stated that at least Rs 18 million had gone through some of these mule accounts.