I got a panicked call from a member in our Hyderabad WhatsApp group last year.
His 72-year-old mother, living alone in India, had received a video call from someone claiming to be a “CBI officer.” They told her that her son’s NRE account was linked to a money laundering case. That an arrest warrant had been issued.
They kept her on the call for 11 hours straight. Wouldn’t let her hang up. Wouldn’t let her call anyone.
By the time her neighbor noticed something was wrong, she had transferred Rs 18 lakhs across four different accounts.
This isn’t a one-off story. In our community alone, I’ve heard dozens of similar cases over the past two years. And the scams are getting more sophisticated.
On the other side, there are the “quiet” losses. NRIs who don’t get scammed by criminals, but lose lakhs through avoidable mistakes – poor exchange rates, wrong account types, missing documentation, or simply not knowing the rules.
This guide covers both. The scams that target NRIs specifically. And the honest mistakes that cost real money.
Part 1: Scams Targeting NRIs
Scam 1: The “Digital Arrest” Trap
This has become the single biggest financial threat to NRIs and their families in India.
How it works:
You or a family member in India gets a call. The caller claims to be from the police, CBI, customs, or the Income Tax Department.
They say your Aadhaar, PAN, or bank account is linked to a criminal case – drug trafficking, money laundering, or tax evasion.
They transfer you to a “senior officer” on a video call. The person is wearing a uniform. There’s an official-looking background (sometimes generated by AI).
They tell you that you’re under “digital arrest.” You cannot hang up. You cannot tell anyone. If you do, they’ll issue an arrest warrant.
Then, over hours – sometimes days – they make you transfer money to “verification accounts” or “RBI safe accounts.”
The scale of this scam:
In January 2026, an elderly NRI couple in Delhi lost Rs 14.85 crore – roughly $1.75 million – over a 16-day “digital arrest.” The scammers kept them on video calls continuously for over two weeks.
Government data shows NRIs lost over Rs 1,200 crore in the first 10 months of 2025 through reported cyber fraud. The unreported number is likely far higher.
Why NRIs are specifically targeted:
NRIs have large balances in Indian accounts. They’re often managing finances remotely, which makes them anxious about compliance. Scammers exploit the fear of “something going wrong with my Indian accounts.”
They also target elderly parents of NRIs living alone in India – the people most vulnerable and least likely to verify.
How to protect yourself and your family:
No Indian government agency will ever “arrest” you over a phone or video call. This does not exist in Indian law. Period.
No police officer will ask you to transfer money to any account for “verification.”
If you get such a call, hang up immediately. Call your local police station using a number you look up independently. Report it on the cybercrime helpline: 1930 or at cybercrime.gov.in.
Tell your parents about this scam. Have this conversation explicitly. Show them news articles. This single conversation could save your family’s life savings.
Scam 2: Fake Property Deals
This one hits NRIs particularly hard because you’re buying property from thousands of miles away.
How it works:
You find a property “deal” through a broker or online listing. The seller (or a middleman) creates urgency – “10 other buyers are interested, you need to pay the advance today.”
You transfer the advance (sometimes Rs 5-20 lakhs) without proper verification. Later, you discover the property has legal disputes, is built on encroached land, or the person who sold it doesn’t actually own it.
Real community example:
A member in our Bay Area group wired Rs 15 lakhs as an advance for a flat in Bangalore. The “broker” showed him the property on a video call. Everything looked legitimate. After the transfer, the broker stopped responding. The property existed, but the person who took the advance had no ownership rights.
How to protect yourself:
Never transfer money for property without an independent legal verification by a lawyer you hired (not the seller’s lawyer).
Always verify ownership through the local sub-registrar’s office. Insist on seeing the original sale deed, encumbrance certificate, and property tax receipts.
If possible, appoint a trusted person in India through a general power of attorney to inspect the property physically.
For detailed guidance, see our real estate laws and pitfalls for NRIs.
Scam 3: Fake Investment Schemes
“Guaranteed 15% monthly returns.” “Double your money in 90 days.” “Exclusive NRI investment opportunity.”
If it sounds too good to be true, it is.
How it works:
Scammers create WhatsApp or Telegram groups posing as investment advisors or stock market experts. They add NRIs and show screenshots of huge profits.
They ask you to invest small amounts first. You get real returns initially (paid from new victims’ money – classic Ponzi structure). You increase your investment. Then the group disappears.
The 2025 trend:
Fake stock trading apps exploded in 2025. These look like real brokerage platforms – complete with live charts, portfolio dashboards, and profit/loss statements. But the entire app is fabricated. Your “investments” never reach any market.
Investment scams accounted for 76% of total money lost in cybercrime in India in 2025.
How to protect yourself:
Only invest through SEBI-registered brokers and AMFI-registered mutual fund distributors. Verify registration on sebi.gov.in or amfiindia.com.
Never invest through WhatsApp groups, Telegram channels, or unknown apps.
If someone promises guaranteed high returns, walk away. No legitimate investment guarantees returns.
For legitimate investment options, see our guides on best investment options for NRIs and best demat accounts.
Scam 4: Unauthorized Agent Transfers
How it works:
You use an unlicensed money transfer “agent” or hawala channel because they offer a slightly better exchange rate than official channels. The money either never reaches India, or it does initially – building trust – until a large transfer vanishes.
Even when the money arrives, hawala transfers are illegal under FEMA. If discovered, you face penalties and potential prosecution.
How to protect yourself:
Only use RBI-authorized banks and licensed money transfer services (Wise, Remitly, Xe, Western Union, etc.).
The 0.5% better rate from an unlicensed agent is never worth the risk of losing the entire amount. Or the legal consequences.
Scam 5: Phishing and OTP Fraud
How it works:
You receive an email or SMS that looks like it’s from your bank, the Income Tax Department, or a money transfer service. It asks you to “verify your account” by clicking a link.
The link takes you to a fake website. You enter your login credentials. The scammer now has access to your account.
Or they call pretending to be from your bank. “We need your OTP to complete a pending transaction.” The moment you share your OTP, they drain your account.
Why NRIs are more vulnerable:
You’re in a different timezone. You can’t walk into a branch to verify. You depend heavily on online banking. And when a transfer seems “stuck,” you’re more likely to click that link or share that OTP.
How to protect yourself:
No bank will ever call and ask for your OTP, PIN, or password. Ever.
Never click links in emails or SMS about your bank account. Always open your bank’s website or app directly by typing the URL.
Enable two-factor authentication on all financial accounts.
Part 2: Costly Mistakes NRIs Make With Money Transfers
These aren’t scams. Nobody is trying to cheat you. But these mistakes cost NRIs lakhs of rupees every year.
Mistake 1: Sending Everything Through Your Bank
This is the most common and most expensive mistake.
Most NRIs default to their US, UK, or UAE bank for international transfers. It feels safe. It’s familiar.
But banks typically add a 2-4% markup on the exchange rate. On top of that, you pay wire transfer fees ($25-50), and sometimes intermediary bank charges.
What this costs you:
| Transfer Amount | Bank Markup (3%) | Via Wise (0.5%) | You Lose |
|---|---|---|---|
| $10,000 | ~Rs 25,000 | ~Rs 4,200 | ~Rs 20,800 |
| $50,000 | ~Rs 1,25,000 | ~Rs 21,000 | ~Rs 1,04,000 |
| $200,000 | ~Rs 5,00,000 | ~Rs 84,000 | ~Rs 4,16,000 |
That’s real money. On a $200,000 transfer, the difference between a bank wire and Wise can be over Rs 4 lakhs.
What to do instead:
Compare at least 2-3 services before every large transfer. For amounts under $25,000, online services like Wise usually win. For larger amounts, negotiate with your bank’s forex desk and compare.
See our full money transfer to India guide for detailed strategies.
Mistake 2: Sending to NRO Instead of NRE
This one is surprisingly common. And it has real tax consequences.
NRE account: Interest is tax-free. Fully repatriable. For foreign earnings.
NRO account: Interest is taxable at ~30% TDS. Repatriation capped at $1 million/year. For Indian income.
If you accidentally send your foreign salary to NRO instead of NRE, the interest on that money becomes taxable. And getting it back abroad becomes harder.
What to do instead:
Double-check the account number every time. Label your accounts clearly in your phone and banking apps. Foreign earnings always go to NRE.
For account details, see our NRE vs NRO guide.
Mistake 3: Falling for “Zero Fee” Advertising
“Send money FREE!” “No transfer fees!”
Sounds great. But the cost is almost always hidden in the exchange rate.
A service might charge zero fees but give you an exchange rate that’s 1.5-2% worse than the mid-market rate. On a $10,000 transfer, that “free” transfer just cost you Rs 12,000-15,000.
What to do instead:
Always compare the total amount your recipient will receive – not just the fee. The service with the lowest fee is not always the cheapest.
Check the mid-market rate on Google and compare it with what the service is offering. The difference is the hidden cost.
Mistake 4: Converting Everything to INR at Once
Many returning NRIs transfer their entire savings to India in one shot. Whatever the exchange rate happens to be on that day.
If the rate is unfavorable, you’ve locked in a bad deal on your entire corpus.
What to do instead:
Spread your transfers over 3-6 months. Use an RFC account to hold foreign currency in India and convert in batches.
Read our money transfer guide for returning NRIs for detailed timing strategies.
Mistake 5: Not Keeping Transfer Records
“I transferred some money 3 years ago. I don’t remember the exact amount or which account it went to.”
This becomes a problem when:
- The Income Tax Department asks about the source of a large deposit
- You’re buying property and need to prove the funds came from abroad
- You need a FIRC (Foreign Inward Remittance Certificate) for investment documentation
What to do instead:
Keep digital copies of every transfer confirmation. Request FIRCs from your Indian bank for all inward remittances. Maintain a simple spreadsheet: date, amount, exchange rate, service used, sending account, receiving account.
Mistake 6: Ignoring FBAR and FATCA Filing
This isn’t directly a transfer mistake, but it’s directly connected to your transfers.
If your Indian bank accounts (NRE, NRO, FDs, all combined) hold more than $10,000 at any point during the year, you must file FBAR (FinCEN 114) with the US Treasury.
If your foreign financial assets exceed $50,000 on the last day of the year (or $75,000 at any point), you must file FATCA Form 8938 with your tax return.
Many NRIs don’t know about these requirements. The penalties are severe – $10,000 per violation for non-willful failure, and up to $100,000 or 50% of account balance for willful failure.
What to do instead:
File FBAR every year by April 15 (automatic extension to October 15). It’s free to file through FinCEN’s BSA e-filing system. Don’t ignore it.
For details, see our FBAR guide and FATCA guide.
Mistake 7: Sharing Account Details on Unsecured Channels
“Can you share your bank account number and IFSC on WhatsApp?”
Many NRIs casually share bank details over messaging apps when coordinating transfers with family. While sharing account numbers isn’t as dangerous as sharing passwords, it still exposes you to social engineering attacks.
What to do instead:
Share bank details only over secure channels. Save beneficiary details in your transfer service’s app so you don’t need to share them repeatedly. Never share OTPs, PINs, or passwords over any messaging platform.
Mistake 8: Not Notifying Your US Bank About Large Transfers
If you suddenly start making multiple large wire transfers to India without notifying your US bank, your account might get flagged or frozen for suspicious activity.
This happens more often than you’d think. One community member had his Bank of America account frozen for 10 days because he initiated three $50,000 wires in a week without prior notice.
What to do instead:
Call your US bank before you start transferring large amounts. Tell them you’re relocating to India and will be making several large international transfers over the coming months.
They’ll note it on your account and you’ll avoid unnecessary freezes.
How to Protect Your Parents in India
This deserves its own section because it’s that important.
Your parents – especially if they’re elderly and living alone in India – are the number one target for scammers.
Here’s what you should do:
Have the “scam talk” with them.
Sit down (or video call) and explain the common scams. Show them news articles. Make it real. Tell them: “If anyone ever calls claiming to be from the police or CBI, hang up and call me first.”
Set up call filtering.
Help them install Truecaller or a similar app that flags spam calls.
Limit transaction authority.
Talk to their bank about setting daily transaction limits on their accounts. If their daily limit is Rs 1 lakh, a scammer can’t drain Rs 18 lakhs in one day.
Create a family code word.
If someone ever calls claiming your family member is in trouble and needs money, the code word is how you verify it’s real.
Register for SMS alerts.
Ensure every transaction on their account triggers an SMS and email alert. This gives real-time visibility.
Share the cybercrime helpline number.
Save 1930 (India’s cybercrime helpline) in their phone. Also bookmark cybercrime.gov.in. Early reporting dramatically improves the chance of recovering funds.
What to Do If You’ve Been Scammed
If you or a family member has already fallen victim:
Step 1: Report immediately.
Call 1930 (India’s cybercrime helpline) within the first hour if possible. The faster you report, the higher the chance of freezing the scammer’s account before the money is withdrawn.
File an online complaint at cybercrime.gov.in.
Step 2: Contact your bank.
Call your bank’s fraud department immediately. Request a freeze on the transaction if it hasn’t been processed yet.
Step 3: Preserve evidence.
Screenshot everything: call logs, messages, transaction receipts, email communications. Don’t delete anything.
Step 4: File a police FIR.
Visit your local police station and file an FIR. If they’re reluctant (it happens), insist. You can also file an e-FIR in states that support it (Delhi, Goa, and others).
Step 5: Don’t blame yourself.
These scammers are professionals. They use psychological manipulation, AI-generated voices, deepfake videos, and sophisticated social engineering. Falling for a scam doesn’t make you foolish. It makes you human.
Quick Reference: Red Flags Cheat Sheet
Definitely a scam if:
- Someone claims you’re under “digital arrest”
- A “government officer” asks you to transfer money
- You’re told not to tell anyone about the call
- Someone asks for your OTP, PIN, or password
- You’re promised guaranteed high investment returns
- An unknown person creates urgency (“transfer now or face arrest”)
- You’re asked to download a screen-sharing app (AnyDesk, TeamViewer) during a call
Probably a mistake if:
- You’re transferring without comparing exchange rates
- You’re sending to NRO when it should go to NRE
- You don’t have records of past transfers
- You haven’t filed FBAR despite having Indian accounts
- You’re using an unlicensed transfer agent for “better rates”
A Final Thought
I think about that member’s mother who lost Rs 18 lakhs.
She wasn’t careless. She wasn’t uninformed. She was a retired schoolteacher who had never encountered anything like this in her life. The scammers were sophisticated, relentless, and psychologically manipulative.
The best defense isn’t technology. It’s awareness.
Talk to your parents. Talk to your spouse. Talk to your friends in the NRI community. Share this article. The more people know about these scams, the harder it becomes for scammers to succeed.
And on the “mistakes” side – take 10 extra minutes before every large transfer to compare rates, check the account type, and save the confirmation. Those 10 minutes could save you lakhs.
Disclaimer: This guide is for informational purposes only and should not be considered legal advice. If you are a victim of fraud, contact law enforcement immediately. Cybercrime helpline: 1930. Online complaints: cybercrime.gov.in. Always verify information independently before making financial decisions.
Sources: Ministry of Home Affairs, Indian Cyber Crime Coordination Centre (I4C), RBI, FEMA guidelines, IRS, FinCEN, news reports, and real experiences shared by BacktoIndia community members.
If you’re planning your move back, join our WhatsApp community at https://backtoindia.com/groups – 20,000+ NRIs helping each other with real, lived experience. It’s free and volunteer-run.
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