Mr. Alok Verma, a young freelancer from the city of Vidyanagar, recently completed a small web design project for an overseas client, “Global Web Solutions.” For his work, he received a payment of approximately ₹5,000 through an international peer-to-peer (P2P) platform called “PeerLink Transfers.” The amount was successfully credited to his savings account.

A few days later, while browsing an online forum, he came across a story where a person’s bank account was frozen after receiving a P2P payment. The story explained that these transactions are sometimes misused by cybercriminals to layer illicit funds, and innocent recipients get caught in the investigation. Mr. Verma became extremely worried, as his bank account also holds some fixed deposit funds belonging to his parents. He is now anxious about the legitimacy of P2P transactions and fears that his account, containing his family’s savings, might be at risk. He is unsure if this issue only pertains to large amounts or if even his small transaction could land him in trouble.

Advice in such cases

Receiving payments through P2P platforms is common, but it carries certain risks, primarily being unknowingly involved in a money trail of a cyber-fraud.

• Keep Meticulous Records: Always maintain a clear paper trail for all your freelance work. This includes contracts, invoices, email communications with the client, and proof of work delivered. This documentation is your primary defence.
• Understand the Source: While it’s difficult to verify the ultimate source of funds in a P2P transaction, dealing with reputable clients and platforms can mitigate some risks.
• Separate Accounts: If you are a regular freelancer, consider maintaining a separate bank account for your professional transactions. This can help protect your personal and family savings from being impacted by a potential investigation.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think

Applicable Sections of Law

Several laws can come into play in such situations, even if you are an innocent recipient.

• Bharatiya Nyaya Sanhita, 2023 (BNS): While you have not committed a crime, investigations into cyber fraud often involve sections related to cheating (Section 318) or dishonestly receiving stolen property (Section 326). Your innocence is established by proving you had no knowledge or “reason to believe” the money was from a criminal source, which is why your work documentation is crucial.
• Information Technology Act, 2000: This is the primary legislation governing cybercrimes in India. Police investigations into online financial fraud are conducted under the provisions of this Act.
• Prevention of Money Laundering Act, 2002 (PMLA): Banks are obligated to report suspicious transactions to the Financial Intelligence Unit (FIU). A series of P2P transactions flagged by their system could lead to an account freeze as a precautionary measure.
• Foreign Exchange Management Act, 1999 (FEMA): Since the payment originated from an overseas client, FEMA regulations regarding the receipt of foreign remittance for services rendered (export of services) are applicable. Ensure your transaction complies with RBI guidelines.

If you are the complainant

If you are the one whose money was fraudulently taken and used in such transactions:

• Act Immediately: File a complaint on the National Cyber Crime Reporting Portal (cybercrime.gov.in) or file an FIR at your local police station’s cyber cell without delay.
• Inform Your Bank: Immediately report the fraudulent transaction to your bank to have the payment trail investigated.
• Provide All Details: Give the police all relevant details, including transaction IDs, account numbers involved, and any communication you may have had with the fraudster.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think

If you are the victim

If you are in Mr. Verma’s situation and your account gets frozen:

• Do Not Panic: An account freeze is often a preliminary step in an investigation and does not automatically mean you are considered a culprit.
• Contact the Bank: Visit your bank branch and formally inquire in writing about the reason for the account freeze. They are obligated to provide you with details of the authority that ordered the freeze (usually a police cyber cell).
• Gather Your Evidence: Compile all the documents related to the freelance work for which you received the payment.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think
• Cooperate with Authorities: If you receive a notice from the police (e.g., under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023), respond to it with the help of your lawyer. Submit a detailed representation explaining your side of the story, supported by all your evidence.

How the police behave in such cases

When a cybercrime is reported, the police trace the money trail. To prevent the funds from being withdrawn, they issue instructions to the banks to freeze all accounts through which the money has passed. This is a standard procedure. Their primary goal is to recover the stolen funds for the original complainant. Innocent individuals like freelancers often get caught in this process. The police will require you to prove the legitimacy of the transaction that credited money to your account. With proper documentation, the matter can usually be resolved and the account de-frozen.

FAQs people normally have

What evidence is required?

To prove your innocence and the legitimacy of the transaction, you will need:

• A copy of the freelance contract or agreement.
• Invoices sent to the client.
• Email or chat records showing communication about the project, deliverables, and payment.
• Proof of the work you delivered (e.g., website links, design files, documents).
• Transaction confirmation details from the P2P platform.
• Your bank statement showing the credit of the funds.

How long will the investigation take?

The timeline for an investigation and for getting an account de-frozen can vary significantly. It depends on factors like the complexity of the fraud, the number of accounts involved, the workload of the investigating police station, and how proactively you (and your lawyer) pursue the matter. It can range from a few weeks to several months. Providing a clear and well-documented representation at the earliest stage can help expedite the process.

Advocate Sudhir Rao, Supreme Court of India