Aadhaar-enabled Digital India, Minus Safety of Cash and Grievance Redress
On 7th June, finance minister (FM) Nirmala  Sitharaman announced the launch of a new portal www.incometax.gov.in with a flourish, calling it an “important milestone to make the compliance experience more taxpayer-friendly.” A few hours later, her timeline was inundated with complaints. The website was slow; log-in time too long; did not show previous returns; had wrong information about gender, date of birth, bank accounts, etc. This forced her to direct Infosys, which created the portal, to fix the issue. “I see in my TL grievances and glitches. Hope @Infosys & @NandanNilekani will not let down our taxpayers in the quality of service being provided,” she tweeted, asking the company to prioritise ease of compliance. 
 
Well, this is nothing new. The GSTN (goods and services tax network) filing portal as well as MCA21 (for company law compliances) unleashed untold pain on businesses. Both are the work of Infosys and weren’t fixed for years. Then there is FASTag. Even before it was made mandatory, a press release by Paytm Payments Bank Ltd spoke about rectifying 260,000 cases of wrong deduction in 2020. Multiply that with all banks offering FASTag and imagine the number of complaints after it was made mandatory! 
 
A couple of weeks ago, I was double-docked on my very first drive using FASTag. It took over 90 hours for redress, including time taken to lodge the complaint after finding out how to, with help from social media. It surely takes the shine out of propaganda advertisements showing people breeze through toll plazas. In fact, independent transporters and taxis simply refuse to use FASTag because of such glitches and cash payments are still permitted.
 
Finally, there is the UIDAI (Unique Identification Authority of India) portal. Anyone who has to make a change to their Aadhaar data knows exactly how difficult it is to get things done in a reasonable time. 
 
Grievance redress in India is abysmal everywhere. But it is especially nightmarish for digital transactions. The government and a powerful lobby of fintech companies are working overtime to push us to digital transactions ignoring connectivity issues, data theft and the rising incidence of fraud. People who are not tech-savvy are either blissfully unaware of the risks involved or are paranoid about the safety of their money. The fears are legitimate, mainly because redress is mostly non-existent or time-consuming and expensive. But the fintech industry dismisses complaints as inconsequential statistics or emanating from luddites and tech-haters. 
 
When complaints rise, the government gives us yet another regulator; but, as Cashless Consumer discovered, CCPA is another such toothless entity which has yet to get a website or independent office. RBI, meanwhile, is more protective of banks and fintech companies than consumers.
 
The Central Consumer Protection Authority (CCPA) was set up in July 2020 with wide-ranging regulatory, investigative and adjudicatory powers, under the new Consumer Protection Act. In January 2021, CCPA wrote to the Reserve Bank of India (RBI) and the insurance regulator after the national consumer helpline recorded 6,018 grievances against insurance companies and 2,850 complaints relating to long delays in crediting money deducted in case of failed or cancelled transactions during these nine months in the April-December 2020 period. 
 
Cashless Consumer, which works at fairness in digital transactions, filed an application under the Right to Information (RTI) Act to find out what happened to the letter. The answer: RBI has not even bothered to respond to CCPA, a regulatory body. Instead, the banking regulator is busy accommodating the banking industry. 
 
In September 2019, RBI issued elaborate timelines for crediting the money back to the consumer in failed transactions (due to failed communication links, non-availability of cash in the ATM, time-out of sessions due to incomplete information or technology issues) and prescribed compensation for delays. 
 
These were to be effective October 2019 but have been repeatedly postponed, citing the pandemic as an excuse. Ironically, when the lock-down is pushing people into digital transactions and, probably, more complaints, RBI’s latest directive on 21st May has extended the compliance deadline to 30 September 2021. So, laudable directions, such as asking banks to credit ‘financial compensation’ to ‘customer’s account suo moto, without waiting for a complaint or claim from the customer,” have remained on paper.
 
When the regulator actively supports delays in refunding money debited for failed transactions, one can only imagine how much worse it is for victims of rising financial fraud where fraudsters with access to tech tools and data easily dip into your bank account, misuse your credit card, steal government benefits or appropriate property. 
 
When complaints rise, the government gives us yet another regulator; but, as Cashless Consumer discovered, CCPA is another such toothless entity which has yet to get a website or independent office. RBI, meanwhile, is more protective of banks and fintech companies than consumers.
 
Unfortunately, there is no organised method of collating data related to tech-based financial fraud by misusing identification documents. But anecdotal data gathered from media reports collated under the twitter hashtags #DestroyTheAdhaar and #AEPS in just six recent months is frightening enough. 
 
Consider these examples from just the past few months where I have provided links to the detailed reports. 
 
10 December 2020: The Times of India reported that Easy Pay, an Ahmedabad based e-wallet company, filed a complaint about some of its agents duping 91 customers of Rs18.94 lakh. The fraudster obtained Aadhaar card data and fingerprints by offering free LED bulbs in exchange, taking advantage of the needy and the gullible. He sold the data to cyber criminals in Uttar Pradesh, Delhi and Haryana at Rs150-Rs300 per lead. 
 
Fintech geeks may sneer at the lack of savvy or ‘greed’ of people who fell for the scam, but most of them have no idea of the extent of poverty, illiteracy and ignorance among people whose savings are at risk in their zeal to ‘dematerialise’ cash. Indeed, ‘dematerialise cash’ is the term used in a lobbying document of iSpirit.com titled “Jandhan 2.0”. It also spoke of using credit as a hook. Well, in this case, a fraudster used free LED bulbs as the hook to plunder savings.
 
16 December 2020: The Times of India reported how a man in Jind was cheated of Rs22,500 by using fingerprint verification through a cloned copy of his fingerprints. 
 
22 December 2020: Mathrubhumi reported how PK Sreenivasan, the son-in-law of writer Sara Joseph, lost over Rs20 lakh from his bank account using the duplicate  SIM card trick. This is now a routine fraud, where fraudsters, having already obtained bank details and credentials of a victim (usually through phishing), apply for a duplicate SIM card preventing the victim from receiving bank alerts while their money is siphoned off. While the fraud is widespread, there is little redress and no solutions from the authorities other than lamenting about phone companies issuing duplicate SIM cards without adequate checks. 
 
26 December 2020: The Tribune wrote about a criminal gang that raised two-wheeler loans using Aadhaar cards of migrant workers with fake addresses. The workers were made to hand over their Aadhaar cards which were then used to create fake documentation. The workers would have been hounded by recovery agents and lose State benefits and subsidies credited to their accounts.
 
22 January 2021: Telangana Today arrested a gang that used Aadhaar and other identification documents to create fake property cards to transfer vacant land at Hayathnagar. 
 
22 January, 2021: The Times of India reported that the Cyberabad police had busted a gang that used the SIM-swapping trick to transfer out several lakh rupees using IMPS transactions from a victim’s account. A Nigerian national was reportedly the mastermind of this fraud.
 
1 February 2021: The Hindu reported a GST refund scam where a group of fraudsters got GST numbers issued in the name of bogus companies to issue fake documents to 340 firms. They used 25 bank accounts for claiming GST refunds. 
 
10 February 2021: IANS reported a Rs523-crore property fraud in Gurugram by three persons using fake identification documents, Aadhaar cards and impersonators who were paid a fee to pose as the real owners. 
 
12 February 2021: IndiaTV reported how a 19-year old  in Hathras forged documents to open 10 fake accounts in various banks, including Axis Bank, ICICI Bank, IDBI Bank and IndusInd Bank, to apply for loans and dupe them.  
 
20 February 2021: OdishaTV reported how a 35-year old man at Balasore, operating an Aadhaar card correction and kiosk banking centre, stored biometric data of customers to defraud them. The police seized over 100 SIM cards and Aadhaar cards from him. 
 
Tech giants pushing for ‘dematerialised cash’ refuse to address this issue which makes even bank accounts unsafe for the poorest Indians. The standard callous response one sees on social media is that people used to be defrauded by fake IDs other methods even in the past. There is no acknowledgement that their dematerialised world forces people into a system they can neither understand nor afford.
 
23 February 2021: The Times of India reported how a man from Bareilly learnt to clone fingerprints on the Net and used it to hack 500 bank accounts of the beneficiaries of government schemes such as PM Kisan Samman Yojana, old age pension. This was in nexus with ‘bank mitra’, that our fintech giants believe, are adequate to service the needs of the poor who have been forced to open Jandhan accounts without access to actual bank branches.
 
16 March 2021: The Hindustan Times reported how the Comptroller and Auditor General of India (CAG) caught a scam where Aadhaar numbers of students were manipulated to make fraudulent payments to the tune of crores of rupees between 2014-19. It said, the technical education department didn’t pay Rs18 crore scholarship to 7,757 students, though the amount was sanctioned and drawn from the treasury. The case is a great example of how technology, far from reaching benefits in a targeted manner, can deprive needy and legitimate beneficiaries at the bottom of the pyramid their dues.  
 
6 May 2021: The New Indian Express reported how three persons at Bhawanipatna had siphoned off wages of 70 road construction workers worth Rs3 lakh under the MGNREGA scheme in collusion banking correspondents and anganwadi workers by getting hold of Aadhaar cards and photographs of the workers on the pretext of submitting documents for the integrated child development services (ICDS) work. The fraudsters opened accounts in the names of the workers to claim benefits and withdraw funds.
 
20 May 2021: The Times of India reports a Lucknow case where scamsters withdrew Rs30,000 from the bank account of a man using Aadhaar Enabled Payment System (AEPS) by downloading the victim’s Aadhaar card and accessing his digital fingerprints. They allegedly used thermal scanner, butter paper, mirror, thinner gel, glue and image booster chemicals to create thumb impressions on rubber. 
 
7 June 2021: The Hindustan Times reports how 45 residents of Palwal were defrauded of Rs1crore by using their Aadhaar numbers and cloning their fingerprints from official records to withdraw money from their bank accounts. They bribed revenue department officials to get access to the stored fingerprints. 
 
You will notice these reports are only about cases leading to police action and arrests. They are cold comfort for victims, if they don't get their money back quickly. In most cases, red tape and procedures keeps the money locked for years. Getting the police to act is itself a Herculean task for most people. 
 
These cases expose the yawning gap between fintech geeks, who lobby policy-makers, and the travails of actual victims of fraud. When it comes to poor grievance redress or compensation, the urban educated are in the same boat as the rural poor. A government that is relentlessly pushing for digital transactions must realise that safety of money and prompt grievance redress if something goes wrong, is key to building confidence among people about Digital India. 

Comments
ar.ravijoshi
2 months ago
As a watchful NGO working in the financial field, such articles are essential to educate the readers. Well, but instead of a negativity, the same article could have been written in a positive manner without loosing its content. We also should see the benifits that are achieved.
DeepakSB
2 months ago
Very important and eye opening details on finance for common citizen.
vaisloorkar
2 months ago
The benefits outweigh the risks. In my neighborhood flowers @20, veggies @100, bread @38, grocery @300 [email protected] rixa ride @48 nitrogen for tires @40 are all possible on UPI. Fastag is a convenience. Couple of times, faced problem of sensing, which is taken care of by hand held device.

I've stopped whining and complaining. I enjoy the benefits and feel blessed compared to the past.

Next week passport renewal. Looking forward to a breezy experience.

ABHIJIT TRIPATHI
Replied to vaisloorkar comment 2 months ago
absolutely. they dont remember the aweful and slow experience we used to have before. Until passport sewa was handed over to TCS. i couldnt get my passport issued for 4 years event though i kept running piller to post from Regional Passport office to my local passport agent because i refused to bribe the passport officer who sat in the GPO. He even lied on background check that i didnt live at my own house. Similar was the issue with always having to withdraw cash before proceeding anywhere. we used to carry large sums on trips. Now it can stay safely in bank and we can just scan a simple qr code.
DeepakSB
2 months ago
1.Incometax refund assessment order issued in jan 2021,Refund received in May 2021-after repeated follow ups.NO INTEREST PAID FROM JAN-2021 TO-MAR 2021.Refund credited into non registered bank account. (refund credited into account not verified on efiling portal)

2.Covid-19-vaccine certificates issued as 1st DOSE in BOTH certificates.Complain with covin authority-no reply for over one month.

3.Unable to correct above error on covin portal.

4.ORIENTAL BANK OF COMMERCE merged with Punjab National bank-new cheque books with new ISFC CODE AND MICR CODE ISSUED ALMOST AFTER 6 MONTHS.This created major mess for receiving funds , including income tax refunds,Life Insurance money back installments etc. by NEFT. Monthly bank statements are not sent since over 18 months(since Jan 2020-NO COVID-19 pendemic) ,even after 10 t0 12 reminders to bank and higher authorities.RBI rejected complain without any reason .

Does govt.needs to handle high  tech technologies ??? no accountibility at all.Govt.employees anyway get their salaries,increaments,bonuses and other perks.
gkartikeya2007
2 months ago
Good article by Sucheta. No ease of living here. For people caught on the wrong side of the digital divide, it would be even more difficult.
svgopal
2 months ago
Yes there are problems with GSTN, AADHAR, & now Income Tax filing portal. But the article is incomplete as to cover for how many decades GST has been discussed. GST has transformed the movement of goods across the country without glitches. Today real financial benefits accrued in the DBT through AADHAR. This also need to be discussed. You cannot have one sided story unless its motivated. Whenever new system is introduced, there are teething problems and they have to be solved. I agree that Regulatory authorities including RBI needs to respond and CASH of the public needs protection.
MDT
Replied to svgopal comment 2 months ago
Please read the article to the end - especially the examples. It answers your questions on DBT.
Kamal Garg
2 months ago
The problem with all successive governments is that they all are "high on promises and less or absolutely less on delivery".
And as rightly pointed out, the fixed solution for all the problems is to again appoint a new regulator who is basically tooth less and disheartened to take a stand against the government glitches and complaints and therefore the whole process does not serve any purpose.
While the intent may be great but the delivery process is abysmally absent/low/extreme time consuming.
nadeemajshaikh
Replied to Kamal Garg comment 2 months ago
True.
rameshjrdhr5
2 months ago
Digital India can be rightly renamed as defrauding India. Take credit on launching the tech not on fixing the error. India remains the same since 1947.
S.SuchindranathAiyer
2 months ago
Sitaraman's tax portal is Indian Government at its typical since 1947 and counting. Less accountability, less responsibility, more loot and plunder to make governing a pleasure.
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