Technology is the root cause of all scams: SIFO Director

Technology—the enabler of all good things in life, also has its flip side; it is also the root-cause of all frauds and scams, said a senior official from the Serious Fraud Investigation Office (SIFO).

Sanjay Rai, Director, SIFO, who spoke to CIOL at a recent info-security event, said, “Post 1999, the intensity of the frauds has increased, and the chief proponent of these frauds is technology.”

He said, “Although technology is easily accessible today, new developments and updates to government officers are delayed because of the various process and permissions that hurdle faster deployment at each stage. This is the reason that the government agencies are a step behind the general public, and the fraudsters use this space to commit the scams.”

Rai also pointed out a glaring lapse in the mechanism, and asked, “We have control mechanisms in place, why then don’t we follow those processes?”

Rai’s comments make good fodder for thought. Take for instance these two largest financial scams in the recent history. The first one includes Speak Asia promoter Ram Sumiran Pal, one of the three masterminds behind an Rs 2,200 crore online marketing fraud, who was arrested by the Delhi crime branch on November 2013.

The second one is Saradha Group financial scandal caused by the collapse of a Ponzi scheme run by a consortium of over 200 private companies believed to be running collective investment schemes popularly referred to as chit funds in Eastern India.

The group collected around Rs 200 billion to Rs 300 billion ($4–$6 billion) from over 1.7 million depositors before it collapsed in April 2013.

The GoI is now trying to cope up. As Rai pointed out, the officers not only exchange information and modus operandi of the Internet criminals, but are imparted regular trainings around information security, and refresher courses on new technology and development.

We have a robust legal mechanism in place and are armed by a strong framework of laws. What more can be done to nip the scams in the bud, before they increase in magnitude?