Hyderabad: Why police freeze bank accounts in cyber fraud cases

Hyderabad: With cybercrime cases rising sharply, police authorities are increasingly freezing bank accounts found to be linked, directly or indirectly, to illegal digital transactions.

Many innocent account holders are being affected simply because their accounts were misused, knowingly or unknowingly, by cyber fraudsters. Awareness is the key to prevention, as even receiving suspicious money can invite legal action, the police said.

Here is a detailed explainer on why bank accounts are frozen, the legal risks involved, and the correct procedure to get accounts unfrozen.

Common reasons for bank account freezes

Police freeze bank accounts when they are suspected of being involved in cyber fraud, money laundering, or illegal digital activities. The most common triggers include:

Misuse of accounts for fake business loans

Fraudsters often take control of bank accounts under the guise of arranging business loans and use them to route cybercrime proceeds, leading to immediate freezing.

Cryptocurrency and USDT Transactions

Illegal money obtained through cyber scams is often routed through bank accounts to purchase USDT or other cryptocurrencies. Accounts linked to such transactions are frozen during investigations.

Unverified business payments

Business owners who fail to verify the buyer’s identity and source bank account risk receiving cybercrime-linked funds, which can result in account freezes.

Online gaming and betting receipts

Money received from online gaming and betting platforms is frequently linked to cyber fraud and may lead to police action.

Fake investment applications

Any money earned or received through fake or unauthorised investment apps is treated as illegal proceeds and can result in multiple freezes by different police units.

Illegal instant loan apps

Loan amounts credited through unauthorised digital loan apps are illegal and often lead to freezing by several police authorities.

Money from unknown sources

Receiving funds from unknown or unverifiable persons is a major red flag and can lead to immediate freezing.

Selling or sharing your bank account: A Criminal Offence

Cyber criminals actively target students, unemployed youth, drivers, and daily wage workers by offering easy money for “temporary” use of bank accounts.

How fraudsters operate

Contact through WhatsApp and Telegram.

Promise commission or quick income.

Ask for bank account details, ATM cards, or OTPs.

Serious legal consequences

You become a money mule, a punishable criminal offence

You are legally responsible for every transaction in your account

Accounts are used for scams, betting, and money laundering

Possibility of arrest, jail, and prosecution under the IT Act, BNS, and PMLA

Long-term impact on credit score, loans, employment, and passport/visa applications

Claiming ignorance is not a valid legal defence

Never give or sell your bank account, savings, or current, for commission or easy money.

What to do if your bank account is frozen

If your account has been frozen, follow this step-by-step process:

Step 1: Approach Your Bank

Visit your home branch or nearest branch to identify the police authority that issued the freeze order.

Step 2: Check for Multiple Freezes

Many accounts have freezes from multiple police stations. Collect details of all such authorities.

Step 3: Contact the Concerned Police

Speak to the investigating officers. If required, visit the police station and submit:

KYC documents

Bank statements

Explanation for disputed transactions

Step 4: Follow the Standard Procedure

After verification, police authorities will issue an Unfreeze Notice to the bank.

Step 5: Account Restoration

Once unfreeze notices are received from all concerned police authorities, the bank will restore normal operations.

Preventive Steps to Stay Safe

Close unused or dormant bank accounts

Regularly monitor account transactions

Report suspicious activity immediately

Report cybercrime without delay

If anyone asks for your bank account, ATM card, OTP, or online banking access:

Call: 1930 Cyber Crime Helpline

Visit: cybercrime.gov.in