The Supreme Court has directed WhatsApp and other digital intermediaries to submit detailed proposals on how they intend to prevent digital arrest scams and related cybercrimes. A bench led by Chief Justice of India Surya Kant, alongside Justices Joymalya Bagchi and V Mohana, issued the directive following a hearing on October 29 in a suo motu case titled 'In Re: Victims of Digital Arrest Related to Forged Documents'.
Intermediaries have been instructed to share these prevention strategies with the Indian Cybercrime Coordination Centre (I4C) as well as the court. During the proceedings, senior advocate Kapil Sibal, representing WhatsApp, informed the bench that the platform has already initiated preventive measures, which include taking action against 9,400 accounts. He noted that the company is currently developing software designed to identify suspicious accounts and issue warnings to users.
Beyond the role of digital intermediaries, the court addressed the accountability of financial institutions in the rise of cyber fraud. Chief Justice Surya Kant described banks as a “protective umbrella” for customers and emphasized that they must utilize transaction history data to identify and block fraudulent transfers. The court stated that the Reserve Bank of India’s (RBI) regulatory framework must include enforceable provisions that require banks to compensate victims when investigations confirm that a failure to report or prevent suspicious activity allowed the fraud to occur.
The Supreme Court bench further ordered the RBI to provide a list of all authorized financial institutions before the next hearing, which is scheduled for November 23. While the court noted that cybercrimes have declined by 50%, it highlighted that victims have still lost approximately Rs 800 crore so far this year.
Key facts
- The Supreme Court hearing occurred on October 29, with the next session scheduled for November 23.
- WhatsApp reported that it has already taken action against 9,400 accounts related to potential scams.
- The court observed that victims have lost around Rs 800 crore to cybercrimes this year, despite a 50% decline in incidents.
- Banks are being directed to compensate victims if fraud results from a lack of due diligence.
Why it matters
The court's intervention aims to establish institutional accountability for both digital platforms and banks. By mandating compensation for victims when due diligence fails, the bench seeks to shift the burden of security from individual users to the financial institutions that manage their funds.
Source: Times of India, Hindustan Times
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