BY NIROOPAMA FROM LOVELY PROFESSIONAL UNIVERSITY

Abstract

This research paper investigates the critical issue of financial fraud targeting children within the cyber domain in India. Rising digital engagement among children exposes them to novel cyber financial crimes such as phishing, identity theft, and online scams. The paper explores the existing Indian legal framework, analyzes landmark case laws with detailed facts and judgments, and evaluates the effectiveness of current laws in safeguarding children from cyber financial abuse. Based on comprehensive findings, the paper offers recommendations for enhanced legal and policy mechanisms to protect children in the evolving digital landscape.

Introduction

Digital platforms increasingly serve as arenas where children engage with financial transactions, games, and social media. These interactions, while beneficial, render children susceptible to financial fraud and cyber abuse. Financial fraud targeting children manifests in manipulative schemes exploiting their naivety and trust, often leading to credit card fraud, identity theft, or extortion. Recognizing these risks, India has equipped its legal system with cyber laws and child protection statutes. However, challenges in enforcement, underreporting, and rapid technological changes complicate crime prevention. This paper scrutinizes these issues, focusing on the legal and judicial responses to cyber financial fraud against children. Children are especially vulnerable due to their limited understanding of cybersecurity, trust in online platforms, and lack of parental supervision during internet use. The anonymity provided by online spaces makes it easier for perpetrators to manipulate them without immediate detection.

Addressing financial fraud targeting children requires a combination of education, parental guidance, technological safeguards, and strict enforcement of cybersecurity laws. Raising awareness and promoting safe online practices are essential steps to protect young users from exploitation and build a safer digital environment for future generations.

Research Questions

What are the predominant types of cyber financial fraud targeting children in India?
How effective and comprehensive are the Indian legal statutes combating such fraud?
What judicial precedents have shaped the legal landscape concerning financial fraud against children?
What reforms and strategies can enhance child protection in cyberspace?

Research Objectives

To delineate the forms of financial fraud impacting children online.
To review India’s statutory measures applicable to such fraud.
To analyze significant judicial decisions addressing online financial abuse targeting minors.
To identify gaps in legal enforcement and suggest actionable policy measures.

Methodology

Research was conducted through:

Comprehensive review of statutes like the Information Technology Act, Indian Penal Code

(IPC), POCSO, and Juvenile Justice Act. Examination of case laws, including recent Supreme Court and High Court rulings. Analysis of cybercrime reports and government advisories on financial frauds involving children. Synthesis of expert opinions and secondary literature on cyber abuse and child protection.

Hypotheses

H1: Children are disproportionately vulnerable to online financial fraud due to lack of awareness

H2: India’s legal provisions, though substantial, exhibit enforcement and procedural gaps requiring reform.

H3: Strengthening legal protections combined with financial literacy can reduce cyber financial fraud crimes against children.

Legal frameworks in india

The study focuses on financial fraud involving children (under 18) in India via digital means. It With the rapid growth of internet access among children for learning, gaming, and social interaction, cybercriminals have increasingly targeted them for financial exploitation. Children’s limited awareness, trust in digital platforms, and lack of cybersecurity knowledge make them susceptible to fraudsters’ tactics such as phishing, fake apps, impersonation, and extortion. Recognizing this threat, India has established a set of legal provisions and support systems aimed at preventing, reporting, and penalizing such offenses. Below is a detailed description of how different laws and mechanisms work to safeguard children from financial fraud in the digital environment.

1. Information Technology Act, 2000

The IT Act is India’s primary legislation dealing with cybercrimes and electronic commerce.

Section 66C – Identity TheftThis section criminalizes the fraudulent use of another person’s electronic signature, password, or other unique identification features. In the context of children, fraudsters may:

Steal personal information like Aadhaar numbers, bank account details, or passwords through fake links or malware.
Create false profiles impersonating children or their guardians to gain trust.
Misuse this information for unauthorized transactions or online purchases.

Punishment: Imprisonment up to three years and/or a fine of up to ₹1 lakh.

Section 66D – Cheating by Personation Using Computer Resources

This provision applies when a person cheats another by pretending to be someone else using online platforms. For example:

Fraudsters create fake gaming platforms promising rewards in exchange for registration details.
Scammers impersonate teachers, friends, or celebrities to solicit money from children.

Punishment: Imprisonment up to three years and/or a fine of up to ₹1 lakh.

2. Indian Penal Code (IPC)

The IPC provides broader criminal provisions that are applicable to fraud cases, including financial exploitation.

Section 415 – Cheating

This section broadly defines cheating as deceiving a person with intent to gain unlawful advantage or cause wrongful loss. Cyber fraudsters trick children by:

Offering fake scholarships or contests.
Asking for registration fees to access “exclusive content.”

Section 420 – Cheating with Intent to Cause Loss

This section adds severity where the intention behind cheating is to cause wrongful loss or gain. For instance:

Children are tricked into transferring money into fraudulent accounts.
They are manipulated into making purchases or sharing credit card details.

Punishment: Imprisonment up to seven years and a fine.

^{^[1]}Criminal Conspiracy – Section 120B

If multiple offenders work together to defraud children, they can be charged under conspiracy provisions, which address organized fraud operations.

3. Protection of Children from Sexual Offences (POCSO) Act, 2012

While the POCSO Act is primarily concerned with sexual exploitation and abuse, it becomes applicable in cases where financial fraud is linked with sexual grooming or extortion. For example:

Predators may lure children with explicit content or fake relationships, manipulate them emotionally, and then extort money or personal information.
Fraudsters may threaten to leak personal photos to extort payments.

POCSO ensures:

Fast-track courts for child-friendly proceedings.
Protection of the identity and privacy of the child victim.
Rehabilitation support and counseling.

4. Juvenile Justice (Care and Protection of Children) Act, 2015

This law is designed to protect minors from all forms of abuse, including financial exploitation. It provides:

Legal guardianship and rehabilitation services.
Support for children who are victims of exploitation, trafficking, or abuse.
Intervention by child welfare committees to ensure safety and care.

Financial fraud is treated as a form of exploitation, and authorities can act swiftly to prevent harm, offer counseling, and ensure the child’s rights are upheld. 5. National Cyber Crime Reporting Portal

To streamline reporting and enforcement, the Government of India has launched a centralized platform where victims and guardians can report cybercrimes, including:

Fraudulent websites targeting children.
Online scams and phishing attacks.
Instances of identity theft or impersonation.

Features:

Accessible online interface for complaint submission.
Categorization of complaints (financial fraud, abuse, hacking, etc.).
Collaboration with police and child protection agencies.
Real-time tracking of cases.

This portal plays a crucial role in making legal help accessible to children and their families, especially in cases where they are unsure about how to approach authorities.

Case Law Analysis

• Case: Parvin Kumar Jain vs. Anju Jain, Supreme Court of India, 2024^{^[2]}

This landmark Supreme Court judgment deals with maintenance but provides in-depth insight into judicial reasoning on fraudulent financial behavior impacting minors indirectly.

Facts:

The appellant-husband and respondent-wife separated early post-marriage with a son born from the wedlock. Financial maintenance for wife and son was contentious, involving allegations of income concealment and financial fraud by the husband. The wife sought enhanced interim maintenance after uncovering the husband’s significant undisclosed income and assets.

Judgment Highlights: The Court held that applications for interim maintenance and child welfare under the Hindu Marriage Act (HMA) Sections 24 & 26 have independent legal force even if divorce proceedings are withdrawn. The husband had concealed assets and

misrepresented income, warranting increased maintenance. Maintenance was enhanced to ensure the wife and son’s welfare, with interest imposed on delayed payments. The Court emphasized financial transparency and evasion detection as critical to justice. It recognized the capacity of a parent to support children beyond 18 years until financial independence, addressing extended education costs. The marriage was ultimately dissolved recognizing irretrievable breakdown, but permanent alimony was awarded with detailed criteria considering lifestyle, income, and expenditures.

• Delhi High Court – Bank Fraud Case (2025)^{^[3]}

In a notable 2025 case, the Delhi High Court permitted two individuals accused of a ₹1,626 crore bank fraud to travel abroad, citing the constitutional right to freedom of movement under Article 21 of the Indian Constitution. This decision suggests that while severe economic offenses warrant firm legal responses, courts may still grant travel permission if the right to freedom of movement is significantly affected and adequate safeguards can prevent the accused from absconding. The implications for financial fraud investigations include a need for a balanced approach, with continued scrutiny of flight risk alongside the protection of fundamental rights, potentially leading to more nuanced judicial decisions.

• Shreya Singhal v. Union of India (2015) — Facts and Judgment^{^[4]}

Background:

The case challenged the constitutional validity of Section 66A of the Information Technology Act, 2000. This section criminalized sending “offensive” messages through electronic communication. The law prohibited sending information that was “grossly offensive,”

“menacing,” or caused “annoyance,” “inconvenience,” or “insult,” among other vague terms. The provision was widely criticized and misused, leading to arrests for posting political criticism, satire, or dissent on social media and other online platforms.

Petitioners:

Shreya Singhal (an internet freedom advocate), NGOs, and companies filed petitions in the Supreme Court alleging that Section 66A violated fundamental constitutional rights.

Legal Challenge:

The petitioners contended that Section 66A violated:

Article 19(1)(a): Right to freedom of speech and expression.
Article 14: Right to equality before law.
Article 21: Right to life and personal liberty.

They argued that the terminology used in Section 66A was vague, overly broad, and susceptible to arbitrary and malicious misuse by authorities. Terms like “annoyance,” “inconvenience,” and “insult” lacked clear definitions, which opened the door for censorship and suppression of legitimate free expression.

Supreme Court’s Analysis and Judgment:

The Court struck down Section 66A in its entirety on 24th March 2015.
The Court held that the section was unconstitutional because it violated the right to freedom of speech and expression guaranteed under Article 19(1)(a).
Section 66A did not meet the test of “reasonable restrictions” under Article 19(2), as it was vague and overbroad.
The provision criminalized speech causing mere “annoyance,” which was not a legitimate ground for restricting free speech.

• Shakeel Ahmed Cyber Fraud Case (2025)^{^[5]}

In Jaipur, Shakeel Ahmed was arrested for orchestrating a large-scale cyber fraud amounting to ₹5.62 crore. He used a fictitious company to deceive victims across multiple states, including Rajasthan, Bihar, Maharashtra, Andhra Pradesh, and Karnataka. The case highlights

how cybercriminals exploit digital platforms to defraud individuals, including minors, by impersonating legitimate businesses.

• POCSO Act – Conviction Despite Hostile Witnesses (2025)^{^[6]}

A 20-year-old man was sentenced to 25 years of rigorous imprisonment for raping a 14-yearold girl under the Protection of Children from Sexual Offences (POCSO) Act. Despite both the survivor and her father turning hostile during the trial, the court relied on forensic and medical evidence to convict the accused. This case demonstrates the judiciary’s commitment to upholding justice for minors, even when key witnesses retract their statements.

Scope and Limitations

Scope

The scope defines how wide-ranging, applicable, and impactful this topic is in terms of legal, social, technological, and psychological dimensions.

1. Educational and Awareness Initiatives

Helps in spreading awareness among children, parents, teachers, and guardians about the risks of online financial fraud.
Encourages training programs on cybersecurity practices, password protection, and recognizing phishing attempts.
Supports the development of child-friendly digital platforms that educate children on safe online behavior.

2. Legal and Institutional Frameworks

Explains the application of various laws like the IT Act, IPC, POCSO, and the Juvenile Justice Act, which are essential for protecting children’s rights.

Promotes understanding of the procedures to report fraud through the National Cyber Crime Reporting Portal.
Encourages law enforcement, judicial bodies, and child welfare organizations to collaborate in ensuring prompt action.

3. Technological Safeguards

Informs the development of parental control tools, content filters, and cybersecurity apps specifically designed to protect minors from fraud.
Supports research into AI-based fraud detection, behavior monitoring, and secure communication tools.
Highlights the need for ethical design of online platforms to prevent deceptive schemes targeting children.

4. Social and Psychological Protection

Addresses the mental health impact of fraud, such as fear, anxiety, and loss of trust.
Promotes counseling and rehabilitation services for affected children and families.
Encourages community involvement in reporting suspicious online activity and supporting victims.

5. Policy Development

Aids policymakers in drafting child protection laws that account for emerging digital threats.
Supports the establishment of guidelines for social media platforms, educational portals, and entertainment apps used by children.
Encourages international cooperation on cybercrime legislation, especially in cases of cross-border fraud.

Limitations

While this topic is highly relevant and important, it has certain limitations and challenges that need to be acknowledged.

1. Awareness Gap

Many parents and children are unaware of the risks or do not know how to report fraud.
Educational efforts are still limited in rural or underserved regions with poor internet literacy.

2. Technological Challenges

Fraudsters continuously evolve their tactics, making detection difficult.
Encryption and anonymization technologies can make tracing offenders more complicated.
Lack of uniform cybersecurity protocols across platforms exposes vulnerabilities.

3. Enforcement Challenges

Reporting delays and lack of trained personnel hinder timely intervention.
Jurisdictional issues arise in cross-border fraud cases.
Not all cybercrime units are equipped with child-sensitive procedures or tools.

4. Psychological and Social Impact

Children may feel ashamed or scared to report incidents.
Financial fraud cases linked with grooming or abuse may be underreported due to fear of stigma.
Recovery from emotional trauma may take a long time and require specialized support.

5. Legal Constraints

Existing laws may not cover all forms of fraud or sophisticated scams.
Penalties may not always deter offenders operating from outside the country.
Legal processes can be slow and intimidating for families unfamiliar with digital crime protocols.

6. Digital Divide

Children in lower-income households or rural areas may lack access to secure devices or education on internet safety.
Fraudsters exploit the disparity by targeting areas with limited cybersecurity awareness.

Findings and Analysis

Children face various cyber financial frauds such as phishing scams, fake giveaways, identity theft, and sextortion, exploiting their limited understanding and online activity.
Many children unknowingly divulge sensitive financial information or are enticed through games and social media to participate in fraudulent transactions.
Indian laws provide a strong foundation to combat these crimes, but enforcement suffers due to low awareness, complex cyber investigations, and tactical concealment by fraudsters.
The legal system increasingly recognizes the need to treat child financial fraud cases with heightened sensitivity and procedural priority.
Case law demonstrates courts’ willingness to impose strict liabilities on offenders and guarantee financial protections to child victims and their guardians.

Suggestions and Recommendations

Nationwide financial literacy initiatives tailored for children and parents to build resilience against digital scams.
Specialized cyber units trained for forensic investigation of crimes involving children’s financial abuse.
Legislative amendments to explicitly criminalize online financial fraud specifically targeting minors, with severe penalties.
Engagement of schools, financial institutions, and platforms in proactive child fraud detection and prevention.
Expanding the scope and publicity of cybercrime reporting portals to encourage timely complaint lodging.
Strengthening regulations and monitoring of digital financial services and gaming platforms frequented by children.

Conclusion

Financial fraud targeting children via cyber means represents a significant challenge in India’s digital era. While India’s legal framework integrates diverse statutes addressing cybercrime, financial fraud, and child protection, enforcement complexities and rapid technological changes necessitate continual adaptation. Judicial precedents highlight evolving interpretations focused on protecting children’s financial interests. Integrated multi-sectoral strategies combining legal reform, education, and technology governance are vital to safeguard children’s financial wellbeing in cyberspace. The Indian legal framework, comprising the Information Technology Act, IPC, POCSO, and the Juvenile Justice Act, provides comprehensive protections against identity theft, cheating, and exploitation. Additionally, platforms like the National Cyber Crime Reporting Portal facilitate reporting and intervention. However, the effectiveness of these measures depends on awareness, enforcement, parental guidance, and technological safeguards.

Despite these provisions, challenges such as limited awareness, technological sophistication of fraudsters, underreporting, and enforcement gaps remain significant obstacles. Addressing these requires a multi-pronged approach—strengthening laws, enhancing cybersecurity education, creating child-friendly reporting mechanisms, and promoting collaboration between government bodies, schools, families, and technology providers.

Protecting children from financial fraud is not merely a legal obligation—it is a social responsibility. By empowering children with knowledge, supporting families, and enforcing laws effectively, society can create a safer digital environment where children can explore the internet without fear of exploitation.

[1] https://www.downtoearth.org.in/governance/to –empower –young –minds –we –must –equip –children –for –a –safer financial –future

[2] https://indiankanoon.org/doc/102090299/

[3] https://www.scconline.com/blog/post/2025/06/19/del –hc –permits –travel –abroad –in –bank –fraud –case/

[4] AIR 2015 SUPREME COURT 1523, 2015 AIR SCW 1989 AIR 2015 SC (CRIMINAL) 834, AIR 2015 SC (CRIMINAL) 834, 2015 AIR SCW 1989, (2015) 149 ALLINDCAS 224 (SC),

[5] https://timesofindia.indiatimes.com/city/jaipur/54 –yr –old –cyber –criminal –linked –to –5 –6 –crore –scam –held –in jaipur/articleshow/123929709.cms?utm

[6] https://timesofindia.indiatimes.com/city/agra/sweet –shop –owner –siphons –off –rs –50cr –from –hdfc –bank held/articleshow/123927537.cms?utm

Cybercrime and Online Abuse: Financial Fraud Targeting Children in India