Cyber fraud hit you? Your bank account could still be the next casualty

For those whose bank accounts have been targeted in cyber-fraud, the first step often seems like a triumph: freezing the account holding the stolen funds. A call to the 1930 helpline within the initial 60 minutes can halt the money's movement. However, this relief is often short-lived as another issue arises: multiple victims' funds may be stored in the same account, leading to competing claims.

A victim may think their money is secure, only to later need legal assistance and court intervention to recover their share, sometimes only receiving a fraction of the losses. On the other side, individuals without involvement in the fraud can also lose access to their accounts if a cybercriminal unknowingly uses their account to move or spend stolen money.

To tackle these complications, the Indian Cyber Crime Coordination Centre (I4C) introduced two portals in June: the Money Restoration Mechanism (MRM) for victims seeking to recover their funds and the Grievance Redressal Mechanism (GRM) for those whose accounts were wrongly frozen in cybercrime investigations. The MRM allows victims to file a refund request, providing their bank details and, if applicable, a court order.

If the account balance is under Rs 50,000, an FIR or court order may not be required. For larger sums, an FIR is mandatory. The portal processed 24,860 instances with Rs 18.27 crore blocked, returning Rs 16.18 crore to victims in 6,096 instances. However, competing claims persist, as funds can move through several accounts before investigators identify them.

In some cases, a victim's money might be redirected into another account and later used for transactions, inadvertently involving an innocent account holder. Police have received complaints from people whose accounts were blocked due to unknowingly receiving or facilitating funds linked to cybercrime. One example involved a fraudster using stolen money to pay for petrol, leading to the blocking of the petrol pump operator's account, despite their ignorance of the source of the funds.

Previously, such account holders had to navigate separate approaches to the police and banks, often losing access to their money for weeks. The GRM streamlines the process, allowing account holders to lodge a complaint through a single platform, linking the account holder, bank, and police. After verification, eligible accounts can be unblocked.

In Mumbai, 2,337 grievances have been registered, with 2,169 successfully resolved, allowing the accounts to be unblocked. Cyber expert Ritesh Bhatia points out that while blocking the initial layers of the account trail is justified, freezing accounts further down the line for relatively small amounts can cause undue hardship. "Blocking the first two layers where a significant amount is transferred from a victim's account makes sense.

However, continuing to block accounts where only a few thousand have been transferred unnecessarily burdens the public. Both banks and police should resolve this issue," he stated. Mumbai Police Commissioner Deven Bharti revealed that the force has also instructed investigators not to freeze entire accounts when possible. Instead, they should place a lien on the specific amount suspected of being transferred through the account, allowing the holder to use the remaining funds.

A case from Shirdi highlights the intricacy of the money trail. A shop owner lost access to his bank account after a cybercriminal used fraudulent funds to purchase goods at his store in July. The account was blocked by five agencies across India after linking to five separate fraud cases. The owner had to contact three police stations in Maharashtra and two each in Karnataka and Tamil Nadu, along with banks, to prove his innocence. It took nearly two months for the account to be reinstated.