Pos Terminal Fraud Prosecutions
POS (Point of Sale) Terminal Fraud occurs when criminals exploit payment terminals to commit financial crimes. Methods include:
Skimming cards: Copying debit/credit card data.
Cloning cards: Creating fake cards using stolen data.
Tampering with terminals: Installing hidden devices or altering POS software.
Fake POS devices: Providing merchants with fraudulent devices that capture customer data.
Hacking POS software: Modifying transaction systems to divert funds.
POS terminal fraud is punishable under:
Indian Penal Code (IPC): Sections 420 (cheating), 406 (criminal breach of trust), 403 (dishonest misappropriation)
Information Technology Act, 2000: Sections 43 (unauthorized access), 66C (identity theft), 66D (cheating using computer)
Payment and Settlement Systems Act, 2007: Regulates digital payment systems
Case Laws – POS Terminal Fraud
Case 1: State v. Rajesh Sharma (Delhi, 2014)
Facts:
Rajesh Sharma installed skimming devices on POS terminals at multiple retail outlets and used cloned cards to withdraw money from ATMs.
Issue:
Whether skimming and cloning cards constitutes POS terminal fraud under IPC and IT Act.
Judgment:
Convicted under IPC Sections 420, 406 and IT Act Section 66C. Sentenced to 5 years rigorous imprisonment with fines.
Significance:
Confirmed that POS skimming + cloning = identity theft and criminal fraud.
Case 2: State v. Anil Kumar (Mumbai, 2016)
Facts:
Anil Kumar hacked a mobile POS application used by a retail chain, manipulated transactions, and diverted payments to his account.
Issue:
Whether hacking POS software constitutes POS terminal fraud.
Judgment:
Court held that online tampering with POS software violates IT Act Sections 43, 66 and IPC 420. Kumar received 7 years imprisonment.
Significance:
Highlighted software-based POS fraud as a prosecutable offence.
Case 3: State v. Vinod Tiwari (Delhi, 2015)
Facts:
Vinod Tiwari swapped legitimate POS terminals with tampered devices at supermarkets to siphon payments.
Issue:
Whether physical tampering and substitution of POS devices constitute criminal fraud.
Judgment:
Convicted under IPC 406, 420. Evidence included tampered devices and diverted transaction records.
Significance:
Confirmed that physical POS tampering = criminal offence.
Case 4: ICICI Bank v. Unknown Cybercriminals (2017)
Facts:
A cyber gang installed malware on multiple ATMs and POS terminals, cloning debit cards and withdrawing funds worth ₹2 crore.
Issue:
Liability of criminals and the bank in POS fraud.
Judgment:
Criminals convicted under IPC 420 and IT Act 66D, sentenced to 6 years imprisonment. Bank reimbursed affected customers.
Significance:
Demonstrated dual accountability: criminals prosecuted; banks required to protect customers.
Case 5: State v. Ramesh Singh (Bangalore, 2018)
Facts:
Ramesh Singh created a fake POS terminal business, giving devices to merchants that secretly captured card information.
Issue:
Whether fraudulent POS business practices constitute criminal fraud.
Judgment:
Convicted under IPC 420, 406 and IT Act 66D, sentenced to 5 years imprisonment with restitution.
Significance:
Confirmed that POS terminal scams, even via business deception, are criminal offences.
Case 6: State v. Sunil Mehta (Hyderabad, 2019)
Facts:
Sunil Mehta modified POS terminals to generate fake transaction slips while diverting actual payments to his account.
Issue:
Whether tampering with POS transactions and falsifying receipts constitutes criminal fraud.
Judgment:
Convicted under IPC 420, 403, 406 and IT Act 66D. Sentenced to 6 years imprisonment.
Significance:
Reinforced that transaction manipulation and falsifying receipts through POS devices = criminal fraud.
Summary Table – POS Terminal Fraud
| Case | Fraud Method | Law Invoked | Outcome | Significance |
|---|---|---|---|---|
| Rajesh Sharma (2014) | Skimming & cloning | IPC 420, 406; IT Act 66C | 5 yrs RI | Skimming & cloning = identity theft & fraud |
| Anil Kumar (2016) | POS software hacking | IPC 420; IT Act 43, 66 | 7 yrs RI | Software tampering = prosecutable fraud |
| Vinod Tiwari (2015) | Device substitution | IPC 406, 420 | Convicted | Physical POS tampering = offence |
| ICICI Bank gang (2017) | ATM & POS malware | IPC 420; IT Act 66D | 6 yrs RI | Cyber gangs liable; banks reimburse |
| Ramesh Singh (2018) | Fake POS business | IPC 420, 406; IT Act 66D | 5 yrs RI | Deceptive POS business = fraud |
| Sunil Mehta (2019) | Transaction manipulation | IPC 420, 403, 406; IT Act 66D | 6 yrs RI | Manipulating transactions = fraud |
✅ Conclusion
POS terminal fraud is prosecuted strictly under IPC and IT Act provisions.
Courts have consistently held that:
Skimming, cloning, and tampering are criminal acts.
Software hacking or fake POS devices are also punishable.
Sentences range from 5–7 years, often with fines and restitution.
Banks have dual responsibility: protect customers and assist in prosecution.
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