HACKED WALLETS, FROZEN HOPES

IN a time when cyber scams are alarmingly on the rise, quick-thinking victims who behave according to the book of rules tend to find themselves stuck in a steel-encased legal and procedural maze. Even with swift intervention by the law and successful freezing of scam accounts, the journey to actual recovery of the swindled money is slow, unreliable, and filled with legal barriers.

A Quick-Thinking Victim Still Stuck Waiting
A marketing executive, based at Jodhpur, Rajasthan lost Rs 28 lakh to a high-tech cyber scam. He promptly called at 1930, the national cybercrime helpline and lodged a complaint resulting in police freezing more than 100 accounts in the laundering chain. But almost a year after that, Mehta is yet to get back Rs 15 lakh. While Rs12 lakh was repaid with a court order, the rest is up in air. The hold-up? Even after a judicial directive, the last payout hinges on the IO’s discretion, and the lack of a centralized legal procedure makes it more complicated.

Layering: The Legal Nightmare Behind Cybercrime
The cyber fraud’s structural framework particularly the method called “layering” renders it legally challenging to track and recover pilfered amounts. This process entails dismantling and dispersing the amount defrauded into several bank accounts (usually counterfeit or hired), spanning states and mixing proceeds from numerous scams in order to develop an electronic smokescreen.
One Delhi doctor lost a large amount in a ‘digital arrest’ fraud. He subsequently discovered that his money had traveled through 185 accounts across the country. Although 60% of the amount was stuck in initial accounts and could be recovered with court orders, the remaining portion was locked in deeper financial depths.

Legal Recovery: What the Law Allows
The victims are required to apply under Section 503 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) to recover frozen funds in a pending inquiry. If the documents are in order, courts can grant temporary custody of the money through a Supurdginama (a legal commitment) within one week. But that is not the end of the story.
Victims are required to post a bond that guarantees if another rightful owner comes along, the money that is refunded will be returned. This legal protection, though needed, introduces one more step of delay and formality.

Informal Settlements: A Troubling Trend
In a few instances, the victims are contacted by those whose bank accounts have been used (usually unknowingly) in the laundering process. These are usually traders, shopkeepers, or small businesspeople who suddenly get themselves barred from their own accounts following intervention by the police.
Eager to get access back, they agree to repay in cash or bank transfer in lieu of a No Objection Certificate (NOC) from the victim. The practice though extralegal has become popular as a way to expedite closure. “It’s not ideal,” “But for many, it’s the only practical route left when formal processes fail or stall indefinitely.”

Lack of SOPs: Police and Banks Left Waiting
Law enforcement authorities admit the lack of a common Standard Operating Procedure (SOP) for the release of frozen funds after investigation. As Shantanu Kumar, SP Cybercrime, Rajasthan, pointed out, “Banks are not willing to release any amount without a specific court order. We are still waiting for detailed guidelines from the Ministry of Home Affairs.”
Though an advisory by the Indian Cybercrime Coordination Centre (I4C) suggests refunding a maximum of Rs 50,000 if the IO verifies fraud, it is rarely followed in practice.

The Rise of ‘Mule Accounts’ and Insider Complicity
The cybercrime culture is funded through “mule accounts“ — bank accounts either opened through fake documents or “leased out“ for money. In December 2024, 15 people, including teachers and attorneys, were arrested by Rajasthan’s Special Operations Group (SOG) for lending their accounts to fraudsters.
In a few instances, banking personnel themselves have been involved. Hanumangarh police apprehended a branch manager of Indian Overseas Bank for enabling the money laundering of more than ₹26 crore. Charges included opening phantom business accounts and handing ATM kits directly to fraudsters.
Social networking sites have also fueled the subterranean economy, with fraudsters openly promoting “rent-your-account“ schemes, enlisting gullible users.

The Waiting Game: Justice Delayed, Confidence Eroded
For such victims as Mehta, who played by the rules, the silence of the system is deafening. “It’s no longer about the money,” he says. “It’s about the trust. Even when you play by the book, the system still fails to protect or compensate you.”
As year after year, cybercrime keeps increasing, legal professionals as well as victims emphasize the imperative to:
Have a single SOP for recovery of funds
Centralized oversight to ensure accountability,
Fast-tracked refund mechanisms,
Awareness campaigns to prevent the misuse of personal bank accounts.
Until then, victims will continue navigating a legal maze where justice, though promised, remains painfully out of reach.