How to unfreeze a bank account due to cybercrime?
If your bank account has been frozen because of a cybercrime investigation, don’t worry, especially if you believe you haven’t done anything wrong. Raizada Law Associates can help you understand what to do and how to get your account unfrozen.
The first question that comes to your mind when you see a frozen bank account or a bank account blocked by cybercrime department is that you haven’t done anything wrong or illegal, then why has your account been blocked and saying that it is involved in some cyber crime activity. Below, we will try to answer all your questions and the process on how to unblock your bank account.
How to Unfreeze a Bank Account Frozen Due to Cyber Crime
If your bank account has been frozen by the cybercrime police, it can be a difficult situation. But, if you have done nothing illegal, there is no need to worry.
Examples of Bank Account Freeze
P2P Fraud Leading to Account Freezing
You receive a payment of ₹50,000 via a P2P (peer-to-peer) platform like Paytm or Google Pay for a project. Unknown to you, the sender’s account was hacked, and the transaction was unauthorized.
What will happen?
- The original account holder files a complaint with the cybercrime department, reporting the unauthorized transaction.
- Your account, being the recipient of the disputed funds, is flagged for investigation.
- The cybercrime department freezes your bank account to prevent further transactions while they investigate the complaint.
Cryptocurrency Trap
Scenario:
You want to sell $1,000 worth of BTC (Bitcoin) through a peer-to-peer (P2P) platform. A buyer named Vikram contacts you and agrees to make the purchase.
The Deal:
Vikram tells you that he will transfer $1,000 directly to your bank account. Once you confirm the payment, you release the Bitcoin to his wallet. Everything seems fine, right?
The Catch:
Vikram is just a name on a screen. Is he a genuine buyer, or are you walking into a scam?
The Double Trouble
Vikram’s Con
Vikram is no ordinary buyer; he’s a scammer. To execute his scheme, he targets another person, Arjun, by pretending to be a government officer.
- The First Target: Arjun receives a call from Vikram, claiming he owes unpaid taxes. If Arjun doesn’t pay immediately, he could face legal consequences.
- The Pressure: Panicked, Arjun agrees to transfer $1,000 to an account provided by Vikram.
Step 2: Using You as a Middleman
To hide his tracks, Vikram uses your P2P transaction as cover:
- Your Bank Account: Vikram gives Arjun your bank details from the P2P platform.
- The Payment: Arjun transfers $1,000 to your account, thinking he’s paying his taxes.
- You see the $1,000 credited to your account and assume it’s from Vikram.
- Following P2P protocol, you release the Bitcoin to Vikram’s wallet, completing the trade.
- Vikram disappears with the Bitcoin, and Arjun has no idea he’s been scammed.
What did you get? A frozen bank account and a lot of stress
The Freeze:
A week later, your bank account is frozen. Arjun realizes he was scammed and files a complaint with the cyber cell, mentioning your account in the process.
The Investigation:
The authorities suspect you of being part of the scam and you must now prove your innocence.
The Reality Check:
You were only trying to sell Bitcoin, but Vikram’s scam trapped you and Arjun.
Why P2P Scams Happen
P2P platforms are convenient but lack the safety net of centralized exchanges. Scammers exploit this by acting as intermediaries targeting people who are not suspecting a fraud.
Steps to Unfreeze a Bank Account Frozen Due to Cybercrime
If your bank account has been frozen because of a cybercrime complaint, don’t worry. Here’s what you can do to resolve the issue:
1. Stay Calm and Contact Your Bank
Why? The bank can tell you why your account is frozen and which police station or city has registered the complaint.
How? Call customer service or visit your nearest branch for details.
2. Consult a Cybercrime Lawyer
Why? A Cybercrime lawyer can guide you through the legal process and tell you which documents to share with the police.
Cost: Consultation fees are usually between ₹4,000–₹6,000, and this investment is worth it for expert advice.
Tip: A good lawyer can help you get your account unfrozen in 7–10 days.
3. Cooperate with the Investigation
Why? Showing cooperation will help you to appear transparent and will show that you want to resolve the matter.
Caution: Always consult a lawyer before speaking to the police. Sometimes, police officers might pressure you or make threats. Having legal support ensures you are protected and well-advised.
4. Contact the Investigating Officer (IO)
Who? The IO is the police officer handling your case.
What to Do: Politely explain to the IO how the bank account freeze is causing you difficulties and provide any necessary information to clear up misunderstandings.
Reminder: Speak to your lawyer before engaging with the IO to avoid any complications.
5. Gather Evidence of Legitimate Transactions
Why? Proof like transaction receipts, emails or screenshots can show that your account activity was lawful and that you are not trying to do any fraud or illegal activity through your account.
How? Share these documents with your lawyer or directly with the authorities if asked.
6. File a Petition or Representation (If Needed)
If the issue isn’t resolved quickly, you may need to take legal action:
Before the Investigating Authority:
Under Section 102(3) of the Criminal Procedure Code (CrPC), the investigating officer can decide whether to release your frozen account.
Before the Magistrate:
If the investigating officer doesn’t unfreeze your account, file an application with a Magistrate under Section 451 or Section 457 of the CrPC.
Key Tips
- Always communicate politely and professionally with the authorities.
- Keep all your documents organized to avoid delays. Seek legal advice at every step to ensure you’re protected from further complications.
How Long would a Cybercrime Investigation Take?
Cybercrime investigation can take anywhere between 7 days to months or even years to conclude. It usually depends on the complexity of the case.
Factors That Affect the Duration of Cybercrime Investigations
- Case Complexity:
There are multiple layers of transactions in cybercrime frauds. People also use fake identities and many different hacking techniques.
The time duration depends upon how complicated teh crime is and how long does it take to trace the true culprit or gather all necessary evidence. - Coordination Between Agencies:
The cybercrime investigation does not happen at one place. Frauds usually happen in different cities and in some cases even international entities and departments of all the cities need to be align before the case is resolved.
The best move here is to provide information as requested and follow up. - Workload of Agencies:
Cybercrime complaints are increasing day by day and the workload of the investigating bodies have also increased. There are 50-100 cases each day at many offices and this high volume of cases, often cause delays.
Having a cybercrime lawyer here to assist you will improve your chances to get the necessary information from teh authorities. - Evidence Gathering:
Digital evidence, such as transaction logs or online communication records, needs to be collected and reviewed. This process takes time, particularly if encryption or complex tools were used by the criminals.
Risks of Delayed Cybercrime Investigations
When cybercrime investigations take too long, the risks to victims can increase. The longer the process takes, the harder it becomes to recover lost money or catch the people responsible. Here are some common risks everyone should be aware of:
- Unresolved investigation:
The more time passes, the more chances criminals have to hide or move stolen money. This makes it harder for authorities to recover your funds. - Emotional Stress:
Waiting for updates can be really stressful and frustrating. Not knowing if your hard-earned money will be returned or how long it will take adds to the pressure. - Misuse of Your Data:
If your personal information was stolen, delays give scammers more time to misuse it, which could lead to more financial or even social trouble. - Legal Complications:
Confusion over which court or authority has the power to handle the case and unclear legal rules can impact the investigation. Even mistakes in following procedures can slow down or stop the process of getting your money back. - Lack of proper follow-up:
If victims don’t keep checking in with their bank or the police, their case might get ignored or forgotten. Having a lawyer make sure your case gets the attention it needs. - Lack of legal knowledge:
Many victims don’t know their legal rights or how to challenge decisions. This lead to them accepting unfair outcomes. A lawyer can help you take the right steps to protect your interests.
Understanding Section 102 of the CrPC
Section 102 of the Code of Criminal Procedure (CrPC), 1973, empowers police officers to seize any movable property, including bank accounts, under specific circumstances. The main aim of this provision is to make sure that property connected to a crime is protected and not destroyed or disposed off before the completion of legal investigations or proceedings.
Key highlights of Section 102 CrPC are:
- Scope of “Property”: The term “any property” under this section covers movable property, including bank accounts, but excludes immovable property. The Supreme Court in State of Maharashtra v. Tapas D. Neogy confirmed that bank accounts are included if they have a direct link to an alleged offence.
- Conditions for Seizure: The property must either be suspected of being stolen or have a link to a crime. There must also be reasonable suspicion supported by evidence that the property is involved in or the proceeds of a criminal act.
- Reporting Obligations: Police must immediately inform the Magistrate about the seizure. Any continued custody of the seized property should follow the Magistrate’s approval and guidelines.
Procedural Safeguards: The section mandates that seizures should be reported “forthwith” to prevent misuse and ensure judicial oversight. Failure to do so may render the seizure invalid.
Powers of Investigating Agencies Under Section 102 CrPC
Investigating authorities, use Section 102 of the CrPC to freeze bank accounts or seize movable property to prevent its misuse during a criminal investigation. Here’s a simpler explanation of their powers:
What Can Be Seized?
Investigating officers can seize items suspected to be stolen or connected to a crime. For example:
- Money obtained through fraud.
- Items or accounts used in illegal activities.
Are Bank Accounts Included?
The Supreme Court clarified that “property” under this law includes bank accounts. If an account is linked to criminal activities, like money laundering, it can be frozen.
Why Freeze or Seize?
- To stop suspects from hiding, transferring, or destroying evidence.
- To make sure the property is available for court proceedings.
Is Mandatory Reporting to Court of the seizure of property necessary?
Once an account or property is frozen, the officer must immediately inform the Magistrate. This ensures transparency and prevents misuse of power.
Are there anyreasonable grounds required to seize the property?
The investigating officer needs solid reasons to believe the property is connected to the crime. This prevents random or unfair actions.
Can Court Supervise or take action to unfreeze the bank account?
The court can check if the police followed the rules. If not, it can unfreeze accounts or reverse the seizure.
Powers of Police Officers Under Section 102 CrPC
Section 102 of the CrPC gives police officers specific powers to seize or freeze property, including bank accounts, during an investigation. Here’s how these powers work:
Who Can Use These Powers?
- Any police officer, regardless of rank, can use this authority if they suspect the property is connected to a crime.
- If the officer is not in charge of the police station, they must immediately report the seizure to the officer in charge.
What Can Be Done?
- Police can freeze a bank account if they believe the money in it is linked to illegal activities, such as theft or fraud.
- They can also seize items like stolen goods or things used in committing a crime.
When Can They Act?
- The officer must have reasonable grounds to suspect that the property is involved in a crime.
- For example, if stolen money is deposited in a bank account, they can freeze it to prevent the suspect from withdrawing or hiding it.
- After seizing property or freezing a bank account, the officer must report it to the Magistrate without delay.
- If the officer fails to inform the Magistrate, their action may be challenged in court..The officer cannot act randomly or freeze accounts without evidence. They must prove that the property is linked to the crime.
Remedies for Dealing with Frozen Bank Accounts
How to unfreeze a bank account?
Remedies Through the Investigating Authority
Under Section 102(3) of the Criminal Procedure Code (CrPC), the investigating authority can decide whether to return the custody of the seized property, including frozen bank accounts. It can take necessary action if it determines that keeping them is no longer necessary for the investigation.
This return is subject to the individual executing a bond, agreeing to produce the property in court when needed.
In the Teesta Atul Setalvad Case [(2018) 2 SCC 372], the Supreme Court clarified that investigating officers should release the seized accounts if they feel further retention isn’t required after reviewing the explanation provided by the account holder.
But visiting the police station to explain your version may not always be helpful. Many people report being treated unfairly or asked for bribes without seeing any results. To avoid such complications, it’s better to follow the official legal process via the courts.
Remedies Before a Magistrate
If dealing with the police doesn’t help, approaching the court is often the best option. You can file an application under Sections 451 or 457 of the CrPC to request the unfreezing of your account.
Courts can allow this if you provide a bond for the frozen amount and agree to produce the funds if required.
- Section 457 gives power to the Magistrates to release seized property to its rightful owner, making it an effective remedy for frozen accounts.
Typically, this legal process takes 15 to 20 days, although the timeline depends on the complexity of your case.
Approaching the High Court
If other remedies fail or you feel that your rights are violated, you can approach the High Court through a writ petition.
Many petitioners argue that freezing bank accounts violates the right to livelihood under Article 21 of the Constitution or is arbitrary under Article 14.
However, since High Courts are meant for extraordinary cases, they may direct you to first try remedies under Sections 451 or 457 of the CrPC.
Why Are Bank Accounts Frozen During Investigations?
Freezing a bank account is a tool for investigation which helps to preserve evidence and prevent misuse of suspected funds. While this action is necessary for justice to be served, it must be backed by legitimate suspicion and evidence.
Investigators cannot freeze accounts without valid grounds.
Steps to Take if Your Account is Frozen
- Visit Your Bank: Ask your branch manager why your account is frozen?
If it’s due to a police or cyber cell investigation, request the following details:- Name and designation of the investigation officer
- Mobile number of the officer
- Official reference or case details
- Contact a Lawyer: It is very important to consult with a legal professional to guide you through the court or investigation process.
Tip: Always maintain proper documentation for payments received, including invoices, emails, or chats, especially for large transactions. This can protect you in case of disputes.
- Legal Powers of the Police Under Section 102 of CrPC
- Legal Remedies to Unfreeze the Account
- Approach the Investigating Officer
- Approach the Magistrate
- Approach the High Court
- Tips to Avoid Future Problems