Digital arrest scams: SC seeks prevention plan from WhatsApp, others

Supreme Court seeks mandatory compensation for digital fraud victims if banks fail due diligence NEW DELHI: The Supreme Court has asked WhatsApp and other digital intermediaries to submit details of the measures they propose to take to prevent digital arrest scams and related cybercrimes, directing them to share their proposals with the Indian Cybercrime Coordination Centre (I4C) as well.A bench headed by Chief Justice of India Surya Kant, also comprising Justices Joymalya Bagchi and V Mohana, issued the direction in an order uploaded on the court's website following a hearing on October 29.The matter has been listed for further hearing on November 23.The case, taken up suo motu, is titled ‘In Re: Victims of Digital Arrest Related to Forged Documents’.“WhatsApp LLC (A Meta company) and other concerned intermediaries are also directed to apprise this Court of the measures they propose to undertake to prevent the digital arrest scams and related cybercrimes. They shall also simultaneously submit their proposals to the I4C,” the bench said. SC wants banks to compensate digital fraud victims The court also reiterated its concerns over the role of financial institutions in preventing digital fraud, saying banks must be held accountable where their failure to exercise due diligence contributes to such crimes.In its October 29 order, the bench said the Reserve Bank of India's proposed regulatory measures must include provisions requiring financial institutions to compensate victims when an investigation establishes that fraud occurred due to their failure to prevent or report suspicious activity. “We reiterate and emphasize that the regulatory measures proposed by the Reserve Bank of India (RBI) must mandate and incorporate suitable provisions that require financial institutions to indemnify victims of digital arrest scams and other cyber frauds and pay suitable compensation not less than the amount lost by the customer,” the bench said. SC seeks details of authorised financial institutions from RBI To ensure effective implementation of the proposed safeguards, the bench directed the RBI to submit a list of all authorised financial institutions before the next hearing.The court observed that although cybercrimes had declined by 50%, victims had still lost around Rs 800 crore so far this year.It said the RBI's proposed regulatory framework must include enforceable provisions for compensation, preventive intervention and institutional accountability.Describing banks as a “protective umbrella” for vulnerable customers, CJI Surya Kant said financial institutions had access to account holders' transaction histories and should use that information to identify and prevent fraudulent transfers before money leaves their accounts. Priyanka Jaiswal has four years of experience in digital journalism, news agency reporting and video production. Currently with The Times of India, she covers public policy, politics and global affairs. She is particularly drawn to human-interest stories that put people at the heart of an issue, spark awareness , and contribute to meaningful conversations.