India's top court presses WhatsApp and banks on phone scams

India's Supreme Court has told WhatsApp and other messaging and online platforms to lay out how they plan to stop "digital arrest" scams and related cybercrimes. The court also wants banks to pay victims back in full when the bank did not take due care. The order came from a hearing on October 29 and was published recently.

What the court asked

A bench led by Chief Justice Surya Kant asked WhatsApp and similar services to send their proposals to the court. They must also send them to I4C, the Indian Cybercrime Coordination Centre. WhatsApp's lawyer said the company has already acted against 9,400 accounts. He said it is building software to spot suspicious accounts and warn users, and that it will file a sworn statement describing its steps.

What banks may have to do

The court said banks should compensate victims, at no less than the amount lost, when an investigation shows the fraud happened because the bank did not take due care. The Chief Justice asked why banks cannot step in when a customer suddenly tries to send an unusually large sum that does not fit their usual pattern.

The order mentions possible safeguards:

• Temporarily pausing unusual or suspicious transactions
• Automatically telling the nearest police station about them
• Checking in person that the transactions are genuine

The court noted that cyber crimes fell by 50 percent, yet victims still lost Rs 800 crore this year. That is about 8 billion rupees.

Police and regulators

Police in every state and Union territory must report on the cases they have registered and the investigations that followed. They must also suggest ways to prevent, detect and prosecute these crimes. The Reserve Bank of India, the country's central bank, must give the court a list of all authorized financial institutions. It is also drafting new customer identity rules, which the court wants to review first.

What it means for you

If a bank flags an odd, large transfer, expect a delay or a call. That is likely to become more common. Also remember that real officials never demand money over a video call.

What happens next

The court will take up the case again on November 23. The Reserve Bank's proposed rules are meant to be announced by November 30 and put into effect by December 31. What WhatsApp and the other platforms will actually propose is not yet known.