Supreme Court Cracks Down on Digital Arrest Scams, Tells WhatsApp and Banks to Submit Action Plans

The Supreme Court of India building in New Delhi. (Photo: Subhashish Panigrahi, Wikimedia Commons, CC BY-SA 4.0)

In a strong message to tech platforms and banks, the Supreme Court of India has directed WhatsApp and other digital intermediaries to spell out exactly how they plan to stop digital arrest scams, one of the fastest-growing cyber frauds in the country. The court has also made it clear that banks may have to compensate victims when a fraud happens because the bank failed to do its due diligence.

The directions came in an order uploaded on the court's website after a hearing on October 29 in a suo motu case titled "In Re: Victims of Digital Arrest Related to Forged Documents". A bench headed by Chief Justice of India Surya Kant, along with Justices Joymalya Bagchi and V Mohana, will take up the matter again on November 23.

What Is a Digital Arrest Scam?

In a digital arrest scam, fraudsters call victims on video, often on WhatsApp, and pose as police officers, CBI officials, customs officers or judges. They claim the victim's name has come up in a serious case, sometimes involving drugs or money laundering, and warn that the person is under "digital arrest". The victim is then pressured, over hours of video calls, to transfer money to "clear" their name.

The fear is real, and so are the losses. The Supreme Court observed that despite a 50 per cent decline in cybercrimes, victims have still lost around Rs 800 crore so far this year. The case before the court began after reports of people being targeted with forged documents and fake arrest warrants.

WhatsApp Told to Show Its Plan

The court has asked WhatsApp LLC, a Meta company, and other intermediaries to inform it of the measures they propose to prevent digital arrest scams and related cybercrimes. They must also send their proposals simultaneously to the Indian Cybercrime Coordination Centre (I4C), the national body that coordinates the fight against online fraud.

Senior advocate Kapil Sibal, appearing for WhatsApp, told the bench that the platform had already taken preventive steps, including action against 9,400 accounts linked to digital arrest scams and impersonation of law enforcement agencies. He said WhatsApp is also developing software to identify suspicious accounts and warn users, and would file an affidavit detailing the steps taken.

Banks May Have to Pay Victims Back

The court's strongest words were for banks and financial institutions. On October 29, the bench had said financial institutions must be held accountable for digital arrest scams and other cyber frauds, and that banks should compensate victims where an investigation establishes that the fraud occurred because the institution failed to exercise due diligence.

The order now says the Reserve Bank of India's proposed Know Your Customer (KYC) Amendment Directions, 2026 must include provisions requiring financial institutions to indemnify victims and pay compensation of not less than the amount lost, where the fraud happened due to the bank's failure to exercise due diligence in preventing or reporting it. The directions are proposed to be notified by November 30 and operationalised by December 31.

The court also suggested practical safeguards, such as temporarily suspending unusual transactions that do not match an account's past history, automatically informing the nearest police station, and physically verifying such transactions to check whether they are genuine. The RBI has also been asked to submit a list of all authorised financial institutions before the court on the next date of hearing.

Police Across India Asked to Report

The directions do not stop with platforms and banks. The court has asked law enforcement agencies in every state and Union Territory to submit the status of FIRs registered so far in digital arrest cases, along with details of the investigations undertaken. They must also suggest measures for the prevention, detection and prosecution of such cases, and the Directors General of Police of all states and Union Territories have been told to ensure compliance.

The directions follow a note placed on record by Attorney General R Venkataramani on October 28, suggesting certain steps on behalf of the Union of India.

Why This Matters for Every Phone User

Digital arrest scams work because they exploit fear and authority. A video call from someone in a police uniform, a fake warrant on screen and the threat of immediate arrest can panic even careful people into transferring their savings within minutes. The Supreme Court's intervention puts the responsibility where it belongs: on the platforms where the fraud happens, on the banks through which the money moves, and on the police who must act on complaints.

Until the new safeguards arrive, the simplest protection remains the same: no real police officer, judge or government agency will ever arrest you over a video call or demand money to avoid arrest. If such a call comes, hang up, and report it on the National Cybercrime Reporting Portal or by calling 1930.

Have you or someone you know ever received a suspicious call claiming to be from the police or a government agency? Share your experience in the comments, it could help someone else stay safe.