—Lieutenant Colonel Samirul Alam Khan Dilir—

In recent years, Bangladesh has experienced significant growth in digital financial services, driven by the increasing adoption of mobile banking, e-commerce platforms and digital payment systems. Services like bKash, Nagad, Rocket and Upay have transformed the mode of financial transactions, making them more accessible to millions. Similarly, the rise of online marketplaces has encouraged cashless transactions, improving convenience for businesses and consumers. However, alongside these advancements, the country has also witnessed a sharp increase in online financial fraud, which poses a serious challenge to digital security. The rapid growth of mobile banking, e-commerce and digital financial services in Bangladesh has led to a surge in online financial fraud, including mobile banking fraud, e-commerce fraud and credit card fraud. Weak regulatory enforcement and low digital literacy have made individuals and businesses increasingly vulnerable. From mobile banking fraud to credit card scam, fraudsters have developed sophisticated methods to exploit loopholes in mobile banking and e-commerce transactions. Credit card fraud and identity theft have become increasingly common, causing financial losses to consumers. And the rapid digital transformation of Bangladesh’s financial ecosystem has outpaced the development of regulatory frameworks, making individuals and businesses vulnerable to fraud. This write-up explores the current state of online financial fraud in Bangladesh (with a focus on mobile banking, e-commerce and credit card fraud) and presents some recommendations for combating online fraud effectively.

ONLINE FINANCIAL FRAUD IN BANGLADESH: CURRENT SCENARIO

As digital financial services expand in Bangladesh, so do the risks associated with online fraud. Fraudsters continuously adapt their tactics, targeting mobile banking users, e-commerce shoppers and credit card holders through deceptive schemes. From fake customer service calls to unauthorised transactions, these crimes exploit security gaps and user vulnerabilities, leading to widespread financial losses. The following parts of this write-up explore the most common forms of online financial fraud in Bangladesh, highlighting the urgent need for stricter security measures and awareness initiatives.

MOBILE BANKING FRAUD: Mobile banking services like bKash, Nagad, Rocket, and Upay have transformed Bangladesh’s financial landscape, making digital transactions accessible to millions. However, the rapid expansion of mobile financial services (MFS) has also given rise to various fraudulent activities. Scammers exploit users through phishing attacks, OTP fraud and fake customer service calls, causing significant financial losses. Nearly one in ten MFS users has experienced fraud with their MFS service, according to a study by the Policy Research Institute of Bangladesh (PRI).

One of the most common fraud tactics is fake customer care scams, where fraudsters call unsuspecting users, posing as MFS representatives. They trick victims into sharing sensitive information, such as PINs or OTPs, under the pretence of account verification. Once obtained, the fraudsters gain control over the victim’s account and transfer funds to their own.

Case studies of bKash and Nagad fraud incidents reveal that fraudsters often operate in organised groups, targeting vulnerable individuals who are unfamiliar with digital security measures. Moreover, fraudsters in Bangladesh have been phishing people by impersonating bKash and offering fake lucrative prizes to trick users into sharing sensitive information, leading to financial losses. Despite efforts by financial service providers to implement security features, such as biometric authentication and transaction limits, mobile banking fraud remains a growing threat.

E-COMMERCE FRAUD: With the rapid rise of online shopping in Bangladesh, e-commerce fraud has become a widespread issue. Fraudulent online stores, misleading advertisements and deceptive promotions have led to consumers losing money on fake or undelivered products. Many scams occur on social media platforms, where sellers advertise products at unusually low prices to attract buyers. Once payment is made, the seller either disappears or delivers substandard or counterfeit goods.

Another common e-commerce fraud involves advance payment scams, where customers are required to make full payments before receiving their orders. In many cases, fraudulent sellers exploit weak refund policies and refuse to return money if customers complain. Additionally, some e-commerce platforms fail to enforce strict seller verification processes, allowing scammers to operate with ease.

High-profile fraud cases, such as Evaly, E-orange and Dhamaka Shopping, have exposed the vulnerability of Bangladesh’s e-commerce ecosystem. These platforms promised unrealistic cashback offers and discounts but failed to deliver products, ultimately scamming thousands of customers and suppliers. The lack of regulatory oversight has allowed fraudulent businesses to thrive, undermining consumer trust in online shopping.

Financial Transactions

CREDIT CARD FRAUD AND BIN ATTACKS: Although credit card usage in Bangladesh is still relatively low compared to mobile banking, fraud involving credit card hijacking, unauthorised transactions and BIN (Bank Identification Number) attacks is on the rise. In a BIN attack, cybercriminals systematically generate and test valid credit card numbers by exploiting weaknesses in online payment systems. Once they find a working combination, they use the stolen card details for fraudulent purchases. Since many local businesses lack strong encryption and fraud detection systems, hackers find it easier to exploit payment gateways that do not enforce multi-factor authentication.

In a recent case of BIN attacks in Bangladesh, cyber intelligence agencies detected illegal transactions using dual-currency credit cards, where hackers exploited vulnerabilities in international payment gateways. Fraudsters used stolen card details to conduct unauthorised foreign transactions, bypassing security measures and causing significant financial losses. This incident highlights the urgent need for enhanced fraud detection systems and stricter authentication protocols in Bangladesh’s banking sector.

The lack of consumer awareness regarding secure online transactions and credit card safety measures further exacerbates the problem. Many users fail to activate security features like transaction alerts, two-factor authentication (2FA), disabling foreign currency part and spending limits, making them easy targets for cybercriminals.

RECOMMENDATIONS AND POLICY MEASURES

Given the increasing prevalence of online financial fraud in Bangladesh, a multi-pronged approach is necessary to address vulnerabilities in mobile banking, e-commerce transactions and credit card security. Effective fraud prevention requires consumer awareness, financial literacy campaigns, technological advancements and regulatory reforms. Well, here are some key recommendations which can prove very useful for combating online financial fraud and protecting consumers.

CONSUMER AWARENESS AND PROTECTION: Many financial fraud cases in Bangladesh occur due to low digital literacy and a lack of consumer awareness regarding cybersecurity best practices. Financial institutions should launch nationwide public awareness campaigns to educate citizens on fraud prevention strategies. These campaigns should focus on:

1. Recognising phishing attempts and fraudulent calls
2. Verifying online sellers before making purchases
3. Using strong passwords and secure authentication methods
4. Reporting suspicious transactions and fraud attempts immediately
5. And disabling foreign currency part of multi-currency cards.

Additionally, banks and mobile financial service providers should implement fraud insurance policies, allowing customers to recover stolen funds in cases of verified fraud. Many countries have introduced zero-liability protection policies for victims of digital fraud, ensuring that financial institutions share responsibility for security lapses.

REGULATORY AND LEGAL REFORMS: The government must update existing regulations to address emerging threats, particularly those related to e-commerce fraud, digital payment security and identity theft. A dedicated Cyber Fraud Monitoring Unit may be established by authorities concerned and Bangladesh Bank, focusing on real-time fraud detection, investigation and rapid response to cybercrime incidents. Legal penalties for financial fraud should be strictly enforced, ensuring that scammers face criminal prosecution and financial restitution requirements for defrauded victims.

ROLE OF FINANCIAL INSTITUTIONS AND LAW ENFORCEMENT: Banks, mobile banking services and fintech companies must take proactive steps to combat financial fraud by investing in fraud prevention technology, enhancing security infrastructure and improving customer support systems. A strict Know Your Customer (KYC) policy should be enforced to prevent fraudulent accounts from being created for illicit financial activities.

Financial institutions should prevent BIN attacks by implementing AI-driven fraud detection systems to monitor transaction patterns and block suspicious activities in real-time. Additionally, enforcing stronger authentication measures (such as 3D Secure verification, transaction limits and real-time alerts) can help detect and prevent unauthorised transactions. Financial institutions should also introduce real-time fraud reporting mechanisms, allowing users to instantly report suspicious activities through mobile apps or dedicated hotlines. Rapid response teams should be established within banks and mobile financial service providers to block fraudulent transactions, freeze compromised accounts and assist fraud victims in recovering their losses.

At the law enforcement level, specialised training programs for cybercrime investigators should be developed to enhance digital forensic capabilities. Bangladesh should expand its cybercrime investigation workforce, equipping it with modern tools to track, investigate and prosecute online financial criminals effectively.

CONCLUSION

The rapid expansion of mobile banking, e-commerce, and digital transactions in Bangladesh has led to a surge in online financial fraud, posing serious risks to individuals and businesses. Fraudulent activities such as phishing, credit card fraud and mobile financial service scams have exploited weak cybersecurity infrastructure, low digital literacy and regulatory gaps. Bangladesh must launch nationwide awareness campaigns and adopt stronger authentication measures along with stricter regulatory enforcement. Collaboration between financial institutions, law enforcement and regulatory bodies is essential for strengthening fraud prevention. Ultimately, the future of Bangladesh’s digital economy depends on its ability to combat financial fraud effectively. A secure and trustworthy digital financial environment will encourage greater adoption of online banking and e-commerce, paving the way for a more resilient and inclusive financial system. The responsibility lies with policymakers, financial institutions and consumers alike to work together to prevent online financial fraud and ensure a safe digital future for all.

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The writer is an army officer