Rising impersonation scams threaten digital economy

Muhammad Arshad, a cloth merchant from Rail Bazaar, Faisalabad, was at his shop when he received a call from an unknown number. The caller introduced himself as an employee at his children's school and said that a new WhatsApp group had been created for parents' guidance. He asked Arshad to click on a link sent to his phone to join the group.

"As soon as I clicked the link, I was asked to log in to my WhatsApp account again. Within minutes, my account was hacked, and someone started sending messages to my friends and relatives, asking them for urgent financial help," Arshad recounted.

He said that since he occasionally borrows small amounts from close friends or relatives for business needs, a few of them assumed it was a routine request and transferred nearly Rs150,000 to the fraudsters. "One of my friends called to confirm the payment, and that's when I realised my WhatsApp had been hacked and someone was impersonating me to collect money," he added. A similar scam targeted Alia Arshad, a beautician from Zia Town, who lost Rs25,000. She received a call from an unknown number claiming she had won a JazzCash lucky draw. "The caller told me that the amount in my JazzCash account would be doubled, but before that, I needed to verify my account by sharing the four-digit code (OTP) sent to my phone," she said.

Excited about her "prize," Alia shared the code without hesitation. "The caller told me the money would be transferred within an hour, but minutes later, I received a message that Rs25,000 had been withdrawn from my account," she said. "When I went to the JazzCash office to report the issue, they told me it was a scam and that no such lucky draw had ever been announced," she added.

According to the State Bank of Pakistan's Annual Report 2023-24, digital payments in the country saw a remarkable increase during the last fiscal year, rising by 40% in volume and 62% in value. The report stated that internet and mobile banking transactions reached Rs69.8 trillion across 1.34 billion transactions. ATM transactions accounted for Rs15 trillion through 931.6 million withdrawals, while e-wallets contributed around 3% of total digital payments. Card-based transactions also exhibited strong growth, with Point-of-Sale (POS) transactions increasing by 36% and e-commerce payments by 26%. In terms of value, POS transactions amounted to Rs1.5 trillion (up 41%), and e-commerce reached Rs194.3 billion (up 37%).

However, alongside this rapid digital expansion, incidents of financial fraud – including fake calls, phishing messages, and WhatsApp account hacking – have sharply increased. The Digital Rights Foundation (DRF), a non-governmental organisation working for digital consumer protection since 2013, reported receiving 233 complaints of digital scams during the first eight months of this year. Most complaints involved scammers posing as helpline representatives to access citizens' e-wallets, impersonating family members to demand ransom, or hacking social media accounts to request money from friends and relatives. The Pakistan Telecommunication Authority (PTA), in its 2024 annual report, also highlighted a worrying rise in fraudulent calls and text scams through mobile and online platforms. Over the past year, the PTA has blocked 5,294 mobile numbers, 4,507 IMEIs, and blacklisted 113 national identity card numbers. Additionally, 19,730 mobile users were issued warnings, and 27,351 stolen or snatched phones were blocked to prevent misuse.

To combat impersonation and financial scams, telecom and fintech companies have intensified preventive measures. JazzCash, Pakistan's largest mobile wallet provider, has upgraded its platform security, while Mobilink Microfinance Bank has issued a comprehensive "Customer Awareness Guide" outlining ways to avoid fraud. Despite these efforts, experts say low digital literacy, weak enforcement mechanisms, and limited technological capacity to detect fraud continue to fuel the growing wave of impersonation scams.

Muhammad Asim, a cybersecurity officer at a multinational company, explained that criminals involved in such scams often rely on social engineering techniques to deceive their victims. "Uneducated individuals, the elderly, and people with limited understanding of technology, are often the easiest targets for these fraudsters," he said. Asim noted that cybercriminals are now using masking technology to disguise their phone numbers, making them appear similar to official helpline numbers of trusted organisations - a tactic that easily misleads unsuspecting users. "In May, the National Cyber Emergency Response Team issued an advisory warning that login credentials and passwords of over 180 million internet users in Pakistan were stolen during a global data breach," he added.

He advised users to enable two-factor authentication (2FA) on all social media and communication apps, and to regularly review linked devices on WhatsApp to ensure no unauthorised access. "People must remain cautious of unknown callers or messages asking for urgent money transfers or verification codes. Keeping all mobile apps updated is essential for maintaining cyber security," he stressed.

Asim further emphasised the urgent need for implementing a comprehensive data protection law in Pakistan to safeguard citizens' personal information. "Without such legal protection, people remain vulnerable to financial fraud, harassment, and blackmail resulting from data leaks," he warned.

As Pakistan rapidly transitions towards a digital economy, experts warn that cybersecurity and consumer awareness must evolve at the same pace. While initiatives by the State Bank, PTA, and fintech firms mark significant progress, the country still lacks a robust legal and technical framework to effectively deter online fraud.

The writer is a freelance journalist