Even digitally savvy folks fall prey to cyber fraud: IIT-Madras study

CHENNAI: The victims of financial cybercrime in India included technology professionals, bankers, doctors, management graduates and even people with cybersecurity expertise, found a study led by the Indian Institute of Technology – Madras, revealing how the fraudsters are increasingly exploiting fear, urgency, and personal circumstances rather than merely the gaps in digital literacy.

The victim-centric study, the results of which was published in Humanities and Social Sciences Communications, examined semi-structured interviews with 33 financial cybercrime victims from Chennai, Bengaluru, Hyderabad, New Delhi, and Mumbai. The sample comprised 22 men and 11 women, including 12 senior citizens. Interviews were conducted in English, Hindi, and Tamil, and analysed using the Gioia methodology.

The study comes against the backdrop of India's rapid digital transition, driven by widespread mobile access, UPI, and digital payments. The researchers noted that while official cybercrime figures capture reported financial breaches, they do not adequately reflect the human trauma experienced by victims.

Many victims had backgrounds in computer science, information technology, or management, and worked in IT, finance, banking, and public-sector organisations. Some even had cybersecurity certifications and experience in the field. That is, their digital familiarity did not save them from being deceived by carefully crafted social-engineering tactics.

Victims were often targeted while dealing with difficult circumstances, including illness in the family, retirement, job searches, workplace stress, and concerns over financial security or family reputation. The researchers identified anticipated gain, fear, lack of awareness that a fraud was under way, and the desire to prove one's worth as prominent situational vulnerabilities.

Fraudsters typically built rapport before escalating pressure. Digital-arrest scams used threats of arrest and reputational damage, while task and stock-trading scams relied on staged profits, apparently credible platforms, and social-media groups to build confidence and persuade victims to transfer more money.

Victims described the experience as a "brain freeze" or "hypnosis", saying intense pressure, fear or temptation impaired their ability to think independently. In some cases, fraudsters persuaded victims to borrow money after their own funds were exhausted.

The financial losses ranged from a few thousand rupees to millions – one participant reported losing Rs 90 lakh. The consequences extended beyond money, with victims reporting shame, sleeplessness, emotional distress, damaged family relationships, and prolonged efforts to recover their funds through banks, police, and courts.

"Our findings show that financial cybercrime is not simply a problem of inadequate digital literacy. Even highly educated and digitally experienced individuals can become vulnerable when fraudsters exploit fear, stress, and urgency," said Prof Nandan Sudarsanam of IIT-Madras.

Retired IPS officer Prof Kandaswamy Paramasivan said the response to cybercrime must move beyond blaming victims and called for stronger systems for early detection, rapid intervention, and coordinated action by banks and law-enforcement agencies.

The study, authored by Kandaswamy Paramasivan, Akanksha Jaiswal, Ameeta Fernando, and Nandan Sudarsanam, received support from IIT-Madras's Wadhwani School of Data Science and Artificial Intelligence.

The researchers recommended targeted awareness campaigns, stronger cyber-forensic capabilities in police cyber cells, faster fraud detection by banks, and closer coordination among banks, police and courts. They also stressed the need for financial and psychological support for victims.

The study cautioned that its qualitative sample was drawn from metropolitan and largely professional groups and cannot be generalised to smaller cities, rural communities, unorganised-sector workers or unreported victims. Future research is proposed with larger quantitative samples and wider geographic and occupational coverage.