Zerodha’s Nithin Kamath Warns Against Digital Arrest Frauds; Explains How It Works

Zerodha Founder Nithin Kamath has sounded the alarm over a rising financial scam known as the ‘digital arrest fraud’. In a post on X, he shared a video detailing how scammers impersonate law enforcement officials to intimidate victims into transferring money.

The nearly 11-minute video posted by Kamath begins with a fake call claiming that a parcel in the victim’s name has been seized at Mumbai airport. The caller then instructs the recipient to dial certain numbers, initiating a trap that leads to further threats and extortion.

The video also shows fraudsters impersonating police officers, citing false money laundering cases and even warning of jail terms of up to 20 years. Their goal is to coerce victims into paying a fine to avoid arrest.

Kamath highlighted how these scams exploit fear and urgency, manipulating people into making irrational decisions. He warned that even well-educated people are not immune. "Indians have lost over Rs 2,000 crore to digital arrest frauds this year," he wrote in his post.

Sharing the video, Kamath urged people to stay vigilant and avoid reacting in haste when confronted with such calls. His caption read, “These scams work by creating fear in people. They take advantage of people's tendency to make mistakes when they are afraid.”

Kamath then went on to explain the scam in detail in his post. “You get a call from a person claiming to be a police officer. They tell you that a courier parcel in your name has been seized because it contains illegal items like drugs or other contraband. Then you get a WhatsApp video call with a scamster wearing a police uniform. They threaten to arrest you, take you to court, and then ask you to transfer money to their account to ‘close the case’.”

He added, “Those of us who are educated may think that no one will fall for such obvious scams, but crores of educated Indians have fallen victim to these frauds.”

Sharing the video, Kamath urged people to stay vigilant and avoid reacting in haste when confronted with such calls. He warned that these scams exploit fear and urgency, manipulating people into making irrational decisions.

Kamath said, “At the very least, speak to someone knowledgeable, to your lawyer, or just walk into the nearest police station. The fraud works because we instinctively become afraid and will do whatever it takes to avoid trouble. Don't react in a hurry. Also, block or don't receive calls and messages from unknown numbers.”

The digital arrest scam is among the many evolving cyber frauds targeting unsuspecting victims. Just days ago, a man from Hyderabad lost Rs 3.5 lakh to this scam, leading to the arrest of three people. Earlier, an 86-year-old woman in Mumbai fell prey to the scam, losing over Rs 20 crore from her savings.

With digital scams becoming increasingly sophisticated, Kamath’s initiative to shed light on this menace serves as a reminder to stay cautious and think critically before responding to suspicious calls.