17% citizens surveyed admit to storing their important financial passwords in mobile phones in an unsafe manner; 34% share their passwords with others; 53% say they or someone in the family has experienced financial fraud in the last 5 years

July 6, 2024, New Delhi: The LocalCircles 2024 survey on financial fraud that concluded in June this year found that 47% urban Indian families had someone who experienced some type of financial fraud. The Reserve Bank of India (RBI) in late May disclosed very concerning data which indicated that bank frauds were up by 300% in last two years and digital frauds were up by 708%. While these numbers are shocking, what LocalCircles has learnt in its previous surveys on the subject is that 6 in 10 Indians do not report financial frauds to regulators or law enforcement agencies. In the event when the fraud value is less than INR 1000, 9 in 10 do not report the same.

As a follow on to its financial fraud survey, LocalCircles decided to focus on some of root causes of financial fraud, especially practices around storage of personal, financial data. This comprehensive national survey attempts to find out how people store their financial passwords and whether they continue to take the risks lightly despite having experienced the many fallouts directly or with a family member. The survey received over 48,000 responses from citizens located in 367 districts of India. 63% respondents were men while 37% respondents were women. 40% respondents were from tier 1, 26% from tier 2 and 34% respondents were from tier 3 & 4 districts.

17% citizens surveyed admit to storing their important passwords (ATM, Debit/Credit cards, bank accounts, app/play store) in their mobile contact list, mobile notes or another place on the phone making them highly vulnerable to data theft

Global studies have shown that many people tend to store their passwords in their mobile phones and laptops for them to be easily accessible. A small percentage of people get the help of apps and online password managers. The survey first asked mobile phone users, “Where do you store your important passwords (ATM, Debit Card, Credit Card, Bank Account, App/ Play stores, others)?” The question received 12,575 responses with 9% indicating that they store passwords in “mobile phone notes”; 4% indicated that they store passwords in the “mobile phone contact list”; 4% indicated that they store them “in password app on the phone”; 4% indicated that they store them in “another app/ place in the mobile phone”; 5% stated that they “keep them in my wallet/ purse”; while 14% “just have them memorized” and 16% indicated that they keep them “on my computer/ laptop”. In addition, 39% of respondents indicated that they “have another place/ way to store them” while the remaining 5% of respondents did not give a clear answer. To sum up, 17% of citizens surveyed admit to storing their important passwords (ATM, Debit/Credit cards, bank accounts, app/play store) in their mobile contact list, mobile notes or another place on the phone making them highly vulnerable to data theft. It must be noted here that many apps that are downloaded from app store/play store require people to share contact lists. If log in ids and passwords are stored in the contact list, it makes an individual highly vulnerable in case the platform/app’s data is compromised or hacked.

34% citizens surveyed admit to sharing their important passwords (ATM, Debit/Credit cards, bank accounts) with someone else, in most cases a family member

For various reasons people tend to give their passwords, particularly ATM, credit and debit cards, to people they trust. The survey next asked citizens, “Who all have access to your ATM, Debit Card(s), Credit Card(s) numbers and pin other than you?” The question received 12,265 responses with 28% admitting that “1 or more of my close family members”; 4% or respondents stated, “1 or more of my domestic or office staff”; and 2% of respondents stated, “1 or more of my friends”. The remaining 66% of respondents stated, “no one other than myself”. In essence, 34% of citizens surveyed admit to sharing their important passwords (ATM, Debit/Credit cards, bank accounts) with someone else, in most cases a family member.

Aadhaar, PAN card and driving license are top three identities that citizens have shared in the last 5 years for various applications, proofs, bookings, stays, etc.

Despite the many known risks, it has become the norm for even agencies like the airlines, hotels, visa agents, etc., to seek proof of ID, with some even insisting on taking a photocopy for their records. The survey next asked citizens, “What are all the identities that you have submitted a photocopy/ printout/ digital version of for various applications, proofs, hotels, other bookings, etc., in the last 5 years?” Some among the 12,131 respondents to the question indicated more than one option. The largest group or 97% indicated “Aadhar”; 68% indicated “Pan Card”; 38% indicated “driving license”; 37% indicated “voter ID card”; 32% indicated "passport”; and 6% indicated "other identities”. In essence, Aadhaar, PAN card and driving license are the top three identities that citizens have shared in the last 5 years for various applications, proofs, bookings, stays, etc.

53% citizens surveyed say they or someone in the immediate family have experienced financial fraud in the last 5 years

Theft of mobile phones, credit/ debit cards, laptops, etc., are often reported by citizens. If the culprits are able to get access to the password/ pin, it can easily invariably lead to financial losses for the individual. The survey next asked citizens, “Did you or someone in your immediate family experience financial fraud in the last 5 years?” Out of 11,942 citizens who responded to the question 53% stated “yes” they or their family members have faced financial frauds in the last 5 years, while 47% of respondents stated “No” they or their family members did not face such a situation.

Credit/Debit Card/UPI fraud, fraud by buying/selling classified site users, bank account fraud among top frauds families have experienced in the last 5 years

The survey next asked, “What are all the kinds of financial frauds you or someone in your immediate family has experienced in the last 5 years?” Some among the 6,329 respondents indicated more than one option. The top group comprising 53% of respondents indicated “Credit/Debit card/UPI fraud”; 32% of respondents indicated "Fraud by buying /selling classified site users”; 28% indicated "Bank Account Fraud”; 21% indicated " “Fraud by websites taking money for products”; 17% indicated "Insurance fraud”; 11% indicated "ATM card fraud”; 4% indicated "Brokerage Account Fraud” and 17% indicated "other frauds” not mentioned. To sum up, Credit/Debit Card/UPI fraud, fraud by buying/selling classified site users, bank account fraud among top frauds families have experienced in the last 5 years.

To summarise, this LocalCircles survey which attempts to understand some of the root causes behind the massive increase in cases of financial frauds, finds that 17% of the citizens surveyed store their important financial passwords (ATM, Debit/Credit cards, bank accounts, app/play store) in their mobile contact list, mobile notes or another place on the phone making them highly vulnerable to data theft. The survey then finds that 34% of the citizens surveyed share their important passwords (ATM, Debit/Credit cards, bank accounts) with someone else, in most cases a family member. In addition to these two vulnerabilities, the survey also learns that a large majority of citizens are sharing their Aadhaar, PAN card (if available) and their driving license for various applications, proofs, bookings, stays, etc. With personal data law yet to become operational in India, their personal data can easily be sold or shared. Such personally identifiable information along with mobile number, email and address easily available can be combined with their financial passwords to conduct financial frauds which is happening at scale as revealed by LocalCircles survey on financial fraud in urban India and RBI’s data. As part of this latest pan India survey including semi-urban and rural India, 53% citizens surveyed said that they or someone in their immediate family experienced financial fraud in the last 5 years, a major eye opening statistic. When asked about where the fraud took place, people have identified that Credit/Debit Card/UPI fraud, fraud by buying/selling classified site users, bank account fraud are the top types of frauds they or their family members have experienced in the last 5 years. It must also be noted that with no or little sensitization of local police on how to action cases of financial fraud when reported by citizens, people really are left to fend for themselves. The need of the times here is a major public awareness and sensitization campaign by RBI and various central and state agencies on financial data safety, along with putting restrictions on seeking of data by Government and private agencies. The personal data law must be implemented for all businesses including MSMEs such that we create a new thinking on how businesses handle personal data.

LocalCircles will escalate the findings of this survey with various stakeholders including the RBI, MEITY, Ministry of Consumer Affairs so the necessary interventions can be acted upon.

Survey Demographics

The survey received over 48,000 responses from citizens located in 367 districts of India. 63% respondents were men while 37% respondents were women. 40% respondents were from tier 1, 26% from tier 2 and 34% respondents were from tier 3 & 4 districts. The survey was conducted via LocalCircles platform, and all participants were validated citizens who had to be registered with LocalCircles to participate in this survey.