55% of the Frauds Detected in India Were Third-Party Account Takeover Frauds: Survey

Mumbai: BioCatch, which specializes in digital fraud detection powered by behavioral biometric intelligence on Wednesday released the findings of a survey on digital banking fraud trends stating that account takeover represented more than half of all fraud cases for its customers in India. The report also noted a concerning bump in mule accounts in India which were massively under reported.

The report 2024 Digital Banking Fraud Trends in India is a result of the analysis of over 350 million sessions in the month of December alone. They report found that the fraud threats in India were a mix of both common threats seen globally and unique threats specific to India alone.

Money muling, also called mule fraud, is when a person or a business moves or transfers ill-gotten funds for someone else. The owner of the funds may be trying to distance themselves from those assets because they have illegal origins: fraud or drug or human trafficking. The account used by a money mule is called a mule account.

The findings come on the heels of a recommendation by the Reserve Bank of India (RBI) that financial institutions in the country abandon text-based one-time-passcodes as a method of secure authentication.

“Accounting for 55 per cent of all fraud in India, third-party account takeover fraud still represents a bigger slice of the fraud pie than the social engineering scams BioCatch sees exploding elsewhere on the planet,” said the report.

Every device found to participate in mule activity in India logged into an average of 35 accounts each. While 86 per cent of the first session of documented mule account activity came from within India, after a month that number fell to just 20 per cent and 16 per cent of those sessions used a Virtual Private Network.

The study found more mule activity (14 per cent of the total) in Bhubaneswar than anywhere else in the country.