The Anatomy of a Digital Arrest Scam

Naresh Malhotra, a 78-year-old retired banker, recently lost ₹230 million in a digital arrest scam over the span of a month. He was confined to his home virtually, told he was under investigation by agencies like the enforcement directorate and central bureau of investigation, and coerced to make repeated transfers from his bank accounts. Fraudsters used forged RBI certificates and layered transactions to drain his life’s savings. Investigators stated that they were able to freeze about only ₹26.7 million during the recovery efforts.

In another case, scammers held a senior woman doctor under digital arrest for 103 days, compelled her to liquidate fixed deposits, sell property, and take loans. During this period, she transferred ₹192.4 million to more than 30 different bank accounts under false promises of legal resolution. In one breakthrough, police traced around 35 bank accounts connected to the scam and arrested one suspect. The accused allegedly used forged letters under the ED’s name, threatened the victim, and claimed she was involved in violations of Foreign Exchange Management Act, 1999, and Prevention of Money Laundering Act, 2002. 

These are a few recent examples of “digital arrest” scams, where criminals impersonate law enforcement agencies to extort large sums of money. These scams are the second highest reported cyber fraud in the country. As per National Crime Records Bureau, as of August 2025, around 4,439 digital arrest cases were reported in India. Contrary to stereotypes, victims of scam include not just elderly or those with weak digital skills but also well-educated and professionals.

Professionals, executives, retirees with savings, doctors and salaried employees are amongst frequent targets based on a potent combination of perceived value and vulnerability. Victims are not just chosen by age or education, but by their potential to yield significant gains coupled with social, cultural, or technological factors that make them susceptible. For instance, people living alone are easier to isolate, women living independently are more likely to face threats of blackmail over sensitive content. The scammers seek out potential targets with valuable resources and exploit their vulnerabilities.

The Anatomy of Digital Arrest Scams
Though no two scams are identical, a typical digital arrest fraud unfolds in predictable phases:

Spoofed introduction and impersonation: The fraud begins with a call or message from what looks like an official number e.g. “Mumbai Police,” “CBI,” “ED,” or a courier service. The scammer establishes authority and urgency.

Intimidation through false claims: The victim is accused of serious crimes like drug trafficking, money laundering, misuse of identity or assets. The scammer often links these claims to the victim’s name, Aadhaar, or phone number.

Digital confinement and coercion: The victim is forced to stay on calls (video or audio) for long periods, told not to speak to family or friends, sometimes instructed to stay in one room or behind closed doors, convinced that help from others will “ruin the case.”

Asset liquidation and fund transfer: The victim is convinced to liquidate fixed deposits, sell property or jewellery, take loans, or transfer funds to accounts controlled by the scammers. The fraud is often structured in many small transactions to evade suspicion.

Layering and disappearance: Once funds are transferred, they are moved through multiple mule accounts, sometimes even across states or abroad. By the time the victim realises the scam, the trail has goes cold.

Why these scams keep happening
The digital arrest scams thrive at the intersection of psychology, technology, and institutional gaps. They prey on human emotions like fear and trust to create a sense of urgency that clouds judgment. For instance, when a stranger tells that law enforcement is about to knock on your door, survival instinct can override logic and common sense. Advanced digital tools, such as spoofed numbers, deepfakes, and forged documents, lend credibility to their claims. The rapid movement of digital payments enables to move money quickly across accounts, making it easier to launder funds before detection.

Further as victims often delay reporting crimes out of shock, fear, or lack of cybercrime awareness. This hesitation reduces the chances of quick intervention. When combined with the challenges of cross-border investigations and limited law enforcement capacity, the odds of recovering lost funds drop even further.

Fighting Back
While the threat is real, the most effective countermeasures are awareness, vigilance, and timely action.

The first recommended action upon receiving a suspicious call is to pause and resist pressure to panic. It is critical to note that legitimate authorities do not conduct arrests over video calls, demand money, or enforce secrecy. Independent verification is the next essential step. Claims must be verified by contacting the relevant agency, such as a police station or bank, using officially listed numbers not those provided by the caller. Breaking the isolation enforced by the scammer is also crucial. Maintain composure and ask counter questions. Additionally, informing a trusted family member or friend can immediately disrupt the fraud.

In no circumstances should money be transferred or assets liquidated under threat. All such demands must be refused. A request for more time should be made, which allows for proper verification.

Finally, any such incident must be reported to the authorities without delay. Reports can be filed through the NCRB Portal at cybercrime.gov.in  or by dialling 1930. Timely reporting gives law enforcement a better chance to freeze illicit transactions. Spreading awareness about the methods of these scams among family, friends, and colleagues remains one of the strongest collective defences.