Online Financial Fraud in India: A Legal and Criminological Study

Abstract

India’s rapid transition to digital banking, mobile wallets, payment cards and the Unified Payments Interface has expanded financial inclusion while creating new opportunities for online financial fraud. This paper examines the principal forms of online financial fraud in India and evaluates whether the existing criminal, procedural, evidentiary, regulatory and consumer-protection framework can deliver timely prevention, investigation and victim redress. It adopts a doctrinal and qualitative analytical method, supported by criminological perspectives including routine activity, rational choice, differential association and victimology. The analysis covers phishing, vishing, smishing, UPI fraud, identity theft, account takeover, investment and loan-app scams, digital-arrest schemes and mule-account networks. It finds that India has a broad but fragmented framework. Its effectiveness is reduced by delayed reporting, interstate jurisdictional barriers, uneven electronic-evidence practices, weak coordination among institutions and uncertainty concerning fraudulently induced authorised payments. The paper argues for an authorised push-payment framework, rapid fund interception through 1930 and the National Cyber Crime Reporting Portal, continuous mule-account monitoring, proportionate account-freezing procedures, stronger platform and telecom cooperation, specialised investigation, and meaningful restitution. Effective control requires a coordinated model that treats fraud prevention, digital evidence, institutional accountability and victim protection as parts of one legal system.