ATM frauds spiked 65% in 2022, informs finance ministry

ATM and other frauds surged over 65 per cent in 2022 from 2021, with the amount involved nearly doubling, the Finance Ministry has reported to a Parliamentary Committee. Simultaneously, the National Payment Corporation of India said that on average, 2,000 customers fall victim every month to cyber fraud.

The Committee recommended the setting up of a centralised overarching regulatory authority specifically focussed on cyber security on the lines of the Directorate General of Civil Aviation.

It also pitched for the RBI devising an automatic compensation system. These are part of the Committee’s report on ‘Cyber security and rising incidence of cyber/white collar crimes’, which was tabled in Parliament on Thursday by its Chairman, Jayant Sinha.

On cybercrime trends, the Finance Ministry’s Revenue Department said, “In 2021, we saw the total frauds reported for ATMs and other frauds at about 10.80 lakh and the value was ₹1,119 crore. That means for every 67,000 transactions, one fraud was committed. For 2022, 17.80 lakh is the number we have. The amount is ₹2,113 crore. For every 64,000 transactions, one fraud was committed.”

The Department listed four cybercrime trends including use of crypto for money laundering and terror financing, use of mule accounts with false addresses, use of international online betting sites both for money laundering and terror financing, and use of lending/investment apps.

On people affected by cybercrimes, the NPCI put the average number at 2,000. To enhance the prevention and detection of fraud in the banking sector, the Parliamentary Committee recommended the establishment of a Central Negative Registry.

It said there should be an automatic compensation system, as devised by the RBI, and it should be the financial institution’s sole responsibility to immediately compensate the hapless customer, pending further investigation and final traceability of funds.

It also recommended the setting up of a Single Point of Contact system in every district police department. This system can streamline the reporting process and facilitate efficient handling of cyber fraud cases.

It believed that promoting supervisory cooperation and knowledge exchange with global regulators will facilitate a collective response to the exponentially growing cyber threats.