Pakistan’s digital fraud epidemic: cybercrime waves hit vulnerable hard

By Zahid Gishkori, Mujahid Hussain and Abobakar Khan

ISLAMABAD: Every day, over 400 cases of online fraud are reported across Pakistan. A new investigation by HUM Investigates has revealed an extensive web of scams totaling approximately Rs600 billion, underscoring the immense scale of cybercrime in the country.

Officials believe the actual figures could be even higher, as social and cultural factors prevent many victims from reporting their cases. Data gathered from the Federal Investigation Agency (FIA), legal experts, bankers, digital media specialists, and government officials show that in the past six years, more than 550,000 complaints have been filed with the FIA. Despite this overwhelming caseload, the FIA’s cybercrime unit faces staffing shortages, with a 27 per cent deficit in personnel.

Interviews with victims and officials highlight the staggering Rs600 billion in reported losses. In the past two and a half years alone, some 350,000 complaints have been lodged, with 2,500 cases reaching court and over 3,000 arrests connected to more than 22,000 fraud cases. These scams cut across demographics, affecting everyone from children to prominent public figures, including the prime minister and chief justice.

Since the Prevention of Electronic Crimes Act (PECA) was enacted in 2018, over 5,000 cases have been filed, though conviction rates remain below 30 per cent. FIA complaint records show a steep rise in cybercrime reports since 2020, with annual complaint volumes peaking at 136,024 in 2022 and continuing at high rates.

Detailed data reveals that 41 per cent of complaints concern financial fraud, while others are related to defamation, privacy breaches, religious offenses, and business fraud. FIA’s cybercrime wing has also received over 5,000 complaints involving the army, judiciary, and government, as well as over 3,000 cases involving pornography.

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Platforms like Facebook, WhatsApp, TikTok, and X (formerly Twitter) host significant amounts of cybercrime, with over 70,000 complaints involving email scams alone. A specific focus of HUM Investigates centered on 75 unlicenced lending apps that have allegedly defrauded 700,000 Pakistanis, with losses estimated at Rs500 billion. Many of these apps are not registered with the Securities and Exchange Commission of Pakistan (SECP) or private banks.

These illegal apps attracted over 12 million downloads in one year. The FIA received over 45,000 complaints linked to banking and loan app fraud in the last two years. The SECP and Pakistan Telecommunication Authority (PTA) have confirmed these apps’ fraudulent activities.

Further investigation uncovered that some 200,000 SIM cards were issued using fake fingerprints, prompting an FIA crackdown. Over 100,000 SIMs were seized in 270 raids, with 53,000 confiscated in 2021 alone. Seizures also included silicone molds and biometric devices; 102 court cases were filed, resulting in 201 arrests.

In the last 18 months, FIA has registered 13,473 online fraud complaints, leading to nearly 1,000 arrests and over 900 prosecutions. In response to fraudulent loan apps, the PTA and FIA have filed 161 inquiries and requested platform removals from Google and other international entities, though officials note limited cooperation from major platforms like Meta due to a lack of bilateral agreements.

The Pakistani government’s records show that international platforms have not responded to about 75 per cent of the FIA’s 16,000 requests from 2019 to 2023, with only 1,130 responses across platforms, including Facebook, WhatsApp, and Instagram.

Online banking fraud has surged by 1,800 per cent in the past year, with the Banking Mohtasib receiving over 92,000 complaints. In provincial breakdowns, Punjab recorded 16,000 cases, Sindh nearly 8,000, and Khyber Pakhtunkhwa around 2,800. Overseas Pakistanis submitted over 15,000 complaints during this period.

In efforts to curb digital fraud, the PTA has blocked 7,500 SIMs and over 6,500 mobile phones in the last 18 months, referring cases to the FIA. Around 5.8 million mobile SIMs have been blocked, 34,000 retail shops closed, and mobile companies fined over Rs180 million for fraudulent calls. PTA also forwarded thousands of complaints about fraudulent apps to the FIA.

Complaints about objectionable content, including online fraud, blasphemy, defamation, and hate speech, are rising. Key issues include 35,000 complaints involving the armed forces, 54,000 linked to ethical misconduct, 13,000 concerning Islam-related matters, and over 300 for contempt of court.

Through interviews with dozens of affected individuals, HUM Investigates highlights the serious challenges faced by fraud victims, alongside cautious but cooperative responses from some officials.

AMIDST RISING DIGITAL FRAUD, VICTIMS LEFT STRUGGLING FOR JUSTICE

Ayesha Masood, a recent victim of digital lending fraud, recounts the devastating story of her husband’s suicide after enduring relentless harassment from digital loan apps. Her husband had initially borrowed to cover expenses while unemployed, but these apps reportedly pressured him to repay well before the agreed timeline, charging soaring interest rates and threatening to expose his debts to family and contacts. Despite the family paying nearly one million rupees, the harassment continued, and when they sought help from local police, they were told the case was a matter for the Federal Investigation Agency (FIA), under digital fraud.

For Umair Abbasi, a lawyer, a close friend’s promise of quick profits led to financial ruin. Abbasi was convinced to invest in what appeared to be a highly profitable scheme, only to discover that it was an elaborate pyramid structure — engineered to recruit new investors under the illusion of wealth. “It’s a system where only those at the top gain, and everyone else is financially stranded,” Abbasi said.

According to Waqar Uddin Syed, head of the FIA Cyber Wing, the transnational nature of many cybercrimes adds to the complexity of enforcement. As technology and online apps proliferate, from games to microfinance platforms, digital fraud and exploitation are on the rise.

Cybercrime expert Ahmed Manzoor warns that recent advancements in AI have made creating apps cheaper and simpler, allowing almost anyone to launch platforms that often go unverified. “Blind trust in these apps is dangerous, as some are hastily designed for fraudulent gains,” Manzoor cautions.

Rizwan Tufail, a cybersecurity analyst, highlights the unique risks tied to online games and investment apps. He explains that small initial gains in these apps lure users into investing larger sums, which ultimately vanish when the schemes fold. “Most of these portals are built to exploit users,” he noted, “and disappear once they’ve amassed enough capital.”

DIG FIA, Ahmed Ishaq, described the agency’s limited resources in handling complex digital crime. “Our cyber wing is small and understaffed, but we have digitally trained officers, many with advanced degrees, who manage intricate technical forensics,” he explained.

Recently, the FIA tackled an emerging form of digital fraud known as “loan sharking,” which has largely been curtailed through cooperative measures with the Securities and Exchange Commission of Pakistan (SECP). However, Ishaq noted that as financial crimes evolve, the agency’s workload continues to increase as new threats emerge in the digital landscape.

Nauman Qadoos and Tariq Waseem contributed to this report.