Supreme Court Demands Action Plan From WhatsApp, Banks as Digital Arrest Scam Losses Exceed ₹3,000 Crore

The Supreme Court of India has directed WhatsApp, banks, and other digital intermediaries to submit action plans to curb digital arrest scams, after victims across the country lost more than ₹3,000 crore to cybercriminals.

The directives follow a series of extortion cases where fraudsters impersonate law enforcement officers, forge judicial documents, and place victims under continuous virtual surveillance to extract money. Chief Justice of India Surya Kant expressed exasperation over how educated citizens continue to fall for these psychological traps, stating that cyber criminals have no space in society and that jails are the only place meant for them.

How cybercriminals orchestrate the trap

A digital arrest scam relies on psychological manipulation rather than technical hacking. Cybercrooks contact victims over phone or video calls, posing as senior police officials, federal agents, or crime branch officers. They inform the target that their identity, bank accounts, or packages have been tied to serious offenses, such as money laundering, drug trafficking, or terror funding. To prevent victims from contacting real authorities or relatives, fraudsters order them to remain on video calls under virtual detention while transferring funds to clear their names.

Recent police reports across Maharashtra demonstrate how these operations target senior citizens and working professionals:

In Andheri, Mumbai, a 79-year-old retiree was kept under virtual police investigation, threatened with the immediate arrest of his family, and cheated of ₹1.10 crore, as reported by Hindustan Times. Mumbai Police later arrested a company director involved in the fraudulent financial pipeline.

In Karvenagar, a 75-year-old woman lost ₹32 lakh over a monthlong digital arrest. Fraudsters impersonating Nashik city crime branch officials threatened to arrest her for alleged links to a financial and drug racket, according to The Times of India.

In Vashi, Navi Mumbai, a 68-year-old labor leader lost ₹20.50 lakh after impersonators sent him a fake Supreme Court letter, accusing him of terror funding and money laundering, the Free Press Journal reported.

Why CJI Surya Kant pushed for court intervention

The top court pulled up the Reserve Bank of India (RBI) over the rapid spread of digital arrest frauds, questioning why existing banking safeguards have failed to block suspicious transactions. The Indian Express reported that collective losses from these scams have crossed ₹3,000 crore nationwide, prompting the court to demand systemic accountability from tech platforms and financial regulators alike.

During the hearing, Chief Justice of India Surya Kant questioned how educated victims fall prey to basic instincts when confronted by fake authority figures over video calls. The court noted that cybercriminals exploit human fear and compliance, operating heavily through messaging services like WhatsApp to send forged legal notices and hold video interrogations.

Can banks be forced to compensate victims?

The Supreme Court made it clear that financial institutions must carry responsibility for fraudulent money transfers routed through their systems. The court directed the RBI to establish stricter safeguards, stating that banks must compensate victims if a digital arrest scam succeeds because the institution failed to exercise due diligence.

At the same time, the National Consumer Disputes Redressal Commission (NCDRC) issued notices to banks regarding service deficiencies in cyberfraud prevention. The consumer panel indicated that systemic lapses in bank security protocols allow fraudsters to drain accounts unimpeded, noting that it may involve central investigative agencies to enforce compliance.

WhatsApp and other digital intermediaries must now submit formal action plans to the Supreme Court detailing the exact technical and operational measures they will implement to stop fraudsters from using their platforms for cybercrime.