Scammers are increasingly using advanced deepfake tools to deceive and defraud people online. Experts emphasize that increasing awareness is crucial to preventing these digital scams.
A logo for the AI for Good Global Summit on artificial intelligence, hosted by the International Telecommunication Union (ITU), in Geneva, Switzerland, May 30, 2024. REUTERS/Denis Balibouse.
An Indian textile magnate recently disclosed that he was scammed out of 70 million rupees (approximately $833,000) by fraudsters posing as high-ranking officials, including the Chief Justice of the Supreme Court of India.
The scam began when individuals pretending to be agents from India’s Central Bureau of Investigation (CBI) called SP Oswal, the chairman of the Vardhman textile company, on August 28, accusing him of involvement in money laundering activities.
During the following two days, the scammers kept Oswal under continuous digital surveillance. They instructed him to keep Skype running on his phone around the clock while they interrogated him and issued threats of arrest. The con artists even staged a fake virtual court session using deepfake technology to impersonate India’s Chief Justice.
After being convinced by the fraudulent court decision, Oswal transferred the funds via Skype, unaware that he had fallen victim to a new type of online fraud known as a “digital arrest.”
What Exactly is a Digital Arrest?
A digital arrest is an emerging method of online fraud where scammers convince their victims that they are under a virtual or digital arrest. The victims are coerced into maintaining video contact with the fraudsters, effectively becoming virtual hostages to their demands.
Similar to phishing, digital arrests involve deceiving individuals into providing sensitive data, which can result in identity theft, financial losses, or unauthorized access to confidential information. With advancements in AI, these scams have become more sophisticated, utilizing audio and video deepfakes.
Traditional phishing involves a cybercriminal pretending to be a trustworthy entity to trick the victim into disclosing sensitive information. In the case of digital arrests, scammers manipulate the victim with threats of severe consequences, like financial loss or legal action, to make them comply.
The use of video-conferencing software adds a layer of legitimacy to these scams. Unlike traditional scams that rely solely on phone communication, deepfake video technology allows fraudsters to convincingly appear as a different—often real—person during a video call.
Moreover, AI can mimic the voice of a high-ranking official with just a small audio sample, which fraudsters use to deceive victims during the scam.
Expert Insight: “This is essentially an advanced form of spear-phishing,” explains VS Subrahmanian, a computer science professor at Northwestern University. He notes that these scams are highly targeted and exploit detailed knowledge about the victim’s situation, unlike older phishing schemes.
The Case of SP Oswal: An Inside Look
As per an interview with NDTV, Oswal received a call from a person who claimed that his bank accounts were linked to financial irregularities and a case involving Naresh Goyal, the former Jet Airways chairman who faced money laundering charges in September 2023.
The scammers were able to convince Oswal to transfer $833,000 into a designated account, using fake arrest warrants and fabricated court documents. Oswal later filed a complaint with the police. Thanks to the efforts of cybercrime officials, he managed to recover $630,000 of the amount lost, marking a significant recovery in such cases in India.
