Supreme Court Empowers CBI to Investigate Digital Arrest Scams

The Supreme Court has empowered the CBI to probe ‘digital arrest’ scammers and corrupt bankers facilitating cybercrimes.

The scale of digital arrest fraud has reached significant proportions. According to data presented before the Supreme Court, fraudsters have scammed people for approximately ₹3,000 crore through these operations, with victims ranging from daily wage earners to industrialists and senior citizens.

In a significant judicial intervention, the Supreme Court of India has empowered the Central Bureau of Investigation (CBI) with powers to investigate and address digital arrest scams across the country. 

The apex court’s decision to grant the CBI a “free hand” represents an expansion of federal investigative authority, overriding traditional jurisdictional boundaries and state consent requirements.

Understanding the Digital Arrest Phenomenon

Digital arrest scams are a rising cybercrime where fraudsters impersonate law enforcement or regulatory authorities to put victims under “virtual custody.” They exploit fear by claiming that parcels in the victim’s name contain illegal items or that their identity is linked to crime. 

The caller is then replaced by a fake senior CBI or Narcotics Control Bureau officer (NCB) officer, often through video calls with police-like backgrounds and forged documents. Victims are told not to disconnect and are pressured to transfer money for “fund verification” to fake RBI escrow accounts, believing their savings will be returned once cleared.

Technology Behind the Threat

The digital arrest operations have escalated with AI integration. Scammers now employ deepfake technology using Generative Adversarial Networks (GANs) to create simulations of judicial authorities. A McAfee survey indicated that 75% of Indians have encountered deepfake content, with India recording a 280% increase in deepfake incidents in Q1 2024.

The technical infrastructure relies on Voice over Internet Protocol (VoIP) for caller ID spoofing, Virtual Private Networks (VPNs) to mask locations, and Remote Access Trojans that give device control when victims install malicious apps disguised as security software.

Investigations reveal that many operations originate from the Golden Triangle region in Southeast Asia, Laos, Myanmar, and Cambodia, where organized crime syndicates operate scam compounds. Many operatives are potentially Indian nationals trafficked under false job promises.

Supreme Court’s Comprehensive Directive

A bench led by Chief Justice Surya Kant and Justice Joymalya Bagchi delivered a directive that reshapes India’s response to cybercrime.

Pan-India Jurisdiction for CBI

The Court directed thirteen states including Bihar, Tamil Nadu, Karnataka, West Bengal, Maharashtra, and Punjab to give consent to the CBI under Section 6 of the Delhi Special Police Establishment Act for a pan-India probe by the CBI. The agency can now conduct coordinated investigations across state boundaries without the procedural delays that have plagued cybercrime probes.

Accountability of Banking Sector

The Court’s order includes explicit direction regarding banker liability. The Supreme Court empowered the CBI to initiate action against bank officials under the Prevention of Corruption Act. 

The Court observed that the proliferation of “mule accounts,” bank accounts used to receive and launder illicit funds, could not exist without complicity or negligence of banking officials. 

The directive allows the CBI and state police to freeze accounts traceable to cybercrimes even without a First Information Report (FIR), removing procedural delays that typically allow fraudsters to siphon funds before law enforcement can act.

Technological Integration Mandate

The Court impleaded the Reserve Bank of India (RBI) as a party, demanding a plan for deploying Artificial Intelligence (AI) and Machine Learning (ML) mechanisms to detect fraud in real time. 

The RBI and its subsidiary, Reserve Bank Innovation Hub (RBIH), have developed MuleHunter.AI, an AI powered system that analyzes transaction patterns to predict and flag mule accounts. Initial pilots with public sector banks identified and blocked 13 lakh suspicious accounts, demonstrating the potential of technology driven solutions.

Telecom Sector Accountability

The Court observed that the practice of issuing multiple SIMs under single identity by telecom providers fuels these scams. The Department of Telecommunications was ordered to submit proposals for preventing this SIM card misuse.

Government data reveals the scale: till November 2024, over 6.69 lakh SIM cards and 1.32 lakh IMEIs reported by police authorities have been blocked. The Indian Cyber Crime Coordination Centre (I4C) has blocked more than 1,700 Skype IDs and 59,000 WhatsApp accounts used for digital arrests.

Government’s Coordinated Response

While the Supreme Court has centralized investigation, the executive branch has deployed institutional architecture to combat digital arrest scams.

Indian Cyber Crime Coordination Centre (I4C)

The I4C, under the Ministry of Home Affairs, serves as the nodal agency for combating all forms of cybercrime. It operates the National Cyber Crime Reporting Portal and the toll free helpline 1930. Through the Citizen Financial Cyber Fraud Reporting and Management System, authorities have saved over ₹3,431 crore in more than 9.94 lakh complaints by intercepting funds during the “Golden Hour” immediately after fraud occurs.

Samanvaya Platform

The Samanvaya coordination platform serves as a data repository allowing law enforcement agencies to map cybercrime hotspots, share data on mule accounts, and track fund movements across state lines in real time.

A component is the Pratibimb module, which uses Geographic Information Systems (GIS) to overlay telecom data with crime reports. This hotspot mapping has led to the arrest of over 12,987 accused and identification of 1.5 lakh criminal linkages.

Public Awareness Campaigns

The government has launched awareness programs including newspaper advertisements, social media campaigns, and programs on All India Radio. Messages are disseminated through SMS, digital displays at railway stations and airports, and the CyberDost social media handles across platforms.

Conclusion

The Court has signaled that digital arrest scams will be met with serious action, empowering the CBI and demanding accountability from banks. As India continues its digital transformation, the response to this crisis will determine the resilience of the nation’s digital sovereignty and the safety of millions navigating the online ecosystem.

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Digital Arrest Scams FAQs

1. What are digital arrest scams? 

Ans. Cybercrimes where fraudsters impersonate law enforcement officials such as Police, CBI, ED etc to extort money by placing victims under fake virtual custody.

2. What technology do scammers use in digital arrest frauds? 

Ans. Deepfakes, VoIP spoofing, VPNs, and Remote Access Trojans.

3. What is the helpline number to report cyber fraud in India? 

Ans. 1930 toll-free helpline.

4. What is MuleHunter.AI? 

Ans. An AI-powered system that detects and flags suspicious mule bank accounts used in cybercrimes made by Reserve Bank of India (RBI).

5. Where do most digital arrest scam operations originate from? 

Ans. Golden Triangle region in Southeast Asia (Laos, Myanmar, Cambodia).