A study of 33 financial cybercrime victims in five Indian cities has found that many were highly educated, digitally literate and financially knowledgeable, challenging assumptions that online fraud victims are careless or financially unsophisticated.
Researchers at IIT Madras and collaborators have found that scammers often caught victims at moments of personal or professional stress and exploited fear, urgency, family or reputational concerns, or the lure of financial gains.
The victims, based in Bengaluru, Chennai, Hyderabad, Mumbai and or Delhi, included bankers, doctors, finance, management and information technology professionals, including a cybersecurity expert who told the researchers: “I’m one who catches cybercriminals, but I snapped here.”
“Our findings are surprising, given that earlier research had linked financial cybercrime vulnerability to low levels of digital and financial literacy,” said Kandaswamy Paramasivan, a former Indian Police Service officer and currently a professor of management studies at IIT Madras, who led the study.
“In some cases, lucrative baits drew them into the scam, in other cases, they gave in to fears about some consequences for themselves or their families,” he told The Telegraph. “But educated people lapsed into a level of superficial thinking rather than engaging in deep, rational thinking.”
Paramasivan and his collaborators contacted cybersecurity units of local police in the five cities to find victims who voluntarily agreed to take part in the study, sharing details of their life circumstances and actions ahead of the cybercrime.
The frauds included stock trading scams, so-called digital arrests, task-based scams, e-commerce and digital payment scams, job scams, an impersonation scam, and a malware attack. The financial losses for the victims ranged from tens of thousands of rupees to more than ₹2 crore.
“The psychological trauma for some victims is as bad, if not worse, than the financial loss,” said Ameeta Fernando, a study collaborator and professor of business analytics at the Loyola Institute of Business Administration in Chennai, who teaches artificial intelligence and cybersecurity.
“There is a lingering sense of guilt and shame — a feeling that they were trapped despite their education, despite their knowledge, in some cases despite knowledge about cybersecurity,” Fernando told this newspaper. “It was as if the perpetrators had mocked them.”
All the victims told the researchers that the fraudsters took time to build rapport and gained their trust before seeking financial transactions. In cases of digital arrests, while the fraudsters scared the victims, they also built trust by claiming they were helping the victims from getting into even bigger trouble such as facing physical arrest, going to jail or courts.
In task-based scams such as assigning five-star ratings to hotels, fraudsters initially credited the promised money into victims’ bank accounts before extracting funds from them on some pretext. One stock market scam involved a website that, victims said, claimed it was registered with the Securities and Exchange Board of India.
The study, published in the journal Humanities and Social Sciences Communication, found that many victims were going through difficult or stressful life circumstances, including job pressure, illness, family responsibilities, or financial concerns, when they were defrauded.
The researchers say such personal turmoil might have reduced their vigilance, increasing their vulnerability to fraud and making them believe fraudulent messages to be genuine.
The study has also highlighted what the researchers have described as “unsatisfactory interventions by institutional guardians”. Banks, law-enforcement agencies, payment gateways, service providers, and other such institutions were unable to alleviate the misfortune of most victims.
Victims often felt that police officers, including those working in cybercrime units, lacked adequate knowledge or training to understand technical aspects of certain cybercrimes. As a result, police had to rely on outside technical experts to help with investigations, delaying the probes.
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