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The first question popping into our mind is what exactly does white-collar crime mean? As the name suggests, white-collar crimes are those crimes that are committed by people occupying a respectable position within a company. Although white-collar crimes are different from traditional crimes like theft, robbery, murder etc, they are equally severe and devastating for society. On several occasions, they prove to be more damaging to society. In other words, white-collar crime embraces a variety of nonviolent crimes usually committed in commercial situations for monetary gain. The concept of white-collar crime is definitely not a new phenomenon. There have been numerous references to such crimes since the Vedic period in India’s ancient and medieval literature. Manu who is often accorded the title of being India’s great law-giver, held the view it was an age when dharma prevailed in perfection but later adharma progressed gradually which naturally gave way to tendencies such as robbery, wrongdoing and fraud. According to the changing dynamics of white-collar crime in India, the Central Bureau of Investigation (CBI) has found a total of 6,533 cases of corruption over the last 10 years, of which 517 cases have been recorded over the last two years. Statistics showed a trading value of 4,000 crores using fake or duplicate PAN cards. With 999 cases registered, Maharashtra saw a dramatic increase in the number of online cases. The study also said that approximately 3.2 million people have lost their card details, which were stolen from the Bank ATMs. In the light of such staggering numbers, it is safe to say India is well within the grip of White Collar Crimes.
Some Examples Of White-Collar Crimes
When a person belonging to higher social status resorts to blackmailing it is reckoned in white-collar crime. Blackmailing amounts to Criminal Intimidation which is elucidated under section 503 of the Indian Penal Code,1860. It signifies making a monetary demand or any other consideration by the imposition of a threat to cause any physical injury or harm, or damage to person or property, or to accuse one of a crime, or to expose somebody’s secret.
In consonance with the Oxford Advanced Learner’s Dictionary, corruption implies illegal or dishonest behaviour, particularly of people having authority. Corruption, forbidden by law, is an act or intent of a person to procure wrongful gain which is contrary to duty and the rights of others.
An extremely popular and common type of white-collar crime in India, bribery denotes giving money or any type of goods to persons who are at a higher position in the society for some favour in return.
Bank frauds and Scams
Fraud can be defined as a crime committed with the intent to deceive a person and gain undue advantage from it. Bank fraud is considered as corporate as well as a white-collar crime. It is fraud committed by companies or persons to manipulate negotiable instruments such as cheque bouncing, securities and bank deposits.
Money laundering can be defined as the act of moving illegally earned money to make it seem to have been earned legally. Money laundering is the illegal process of making huge amount of money generated by criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source.
Tax evasion is the illegal activity whereby a person or an entity deliberately conceals their income in order to avoid payment of actual tax liability. This concealment of income is done with an aim to hide the money obtained from illegal means. The result at the end is less income received by the government from taxpayers.
Various other white-collar crimes include Telemarketing scams, Forgery, Counterfeiting, Insurance and healthcare fraud, Hawala Trading, Ponzi Scheme etc.
Legislations against white collar crimes in India
The government has made various legislation for identifying white-collar crime, which enumerates punishment regarding these crimes, a few of which have been mentioned hereunder:
The Prevention of Corruption (Amendment) Act,2018
Prevention of money laundering Act, 2002.
Income Tax Act, 1961
Companies Act, 2013
Negotiable Instrument Act,1881.
Indian Penal Code, 1860.
Commodities Act, 1955.
IT Act, 2005.
Imports and Exports (Control) Act, 1950.
Fugitive Economic Offenders Act, 2018
Reasons for the commission of white-collar crime:
Greed is defined as “a strong desire for more wealth, possessions, power, etc. than a person needs” as per the Oxford Learners Dictionary. The selfish desire for money and power tends to cloud the judgement capabilities of people and make them resort to illegal and unethical and ways to have extra financial gain.
2.Necessity or need:
The necessity for money is another factor that renders people to commit a white-collar crime in order to meet their needs and earn some extra money.
3.Easy, swift and prolong effect
With the augmented growth of technology, business, and political pressure, criminals have been introduced to has newer ways of committing white-collar crimes. Further, technology has also made it easier to inflict harm or cause injury to the other person.
Competition is a leading cause of the commitment of a white-collar crime. The competition to be at the top with money and power constitutes an important fact.
5.Lack of strict rules:
Crimes via digital payment methods and online transactions often make the investigation a bit difficult owing to the fact that, it has been committed without the presence of any eyewitnesses.
6. Access to Information
The availability of sensitive information of individuals such as bank details, passwords, etc. on their smartphones and laptops can prompt the criminal minds to use the data for their own benefit. Hackers can thus steal access this information and further manipulate it for personal gains.
Impacts of the White collar crime
Impact on the company
White-collar crimes bring about a tremendous loss to companies. In order to recover these losses, the companies eventually raise the cost of their product which decreases the number of customers for that product. Since the company incurs a loss, the salaries of the employees are lessened. Occasionally, the company resorts to lay off employees.
Impact on the employees and customers
White-collar crimes endanger employees. They become conscious of the safety of working conditions. The most important concern of the customers is regarding the safety of the products used.
Impact on offenders
Owing to the absence of accurate statistics available to analyse the causes and effects of such crimes the government fails to take exact measures to prevent them coupled with the fact even though these crimes are on the rise, they are generally not reported. The lack of eyewitnesses makes it difficult to track the offenders and become an incentive for the offenders to fearlessly commit such crimes.
Impact on the affected person
The easiest target of the offenders are generally elderly people since they have little access to liquid assets and their cognitive ability is less compared to younger people. The victims of such crimes often undergo depression and often resort to suicide because of unbearable losses.
Most experts agree that the economic impact of white-collar crime is far more costly compared to the ordinary crime. White-collar crime can endanger employees via unsafe working conditions, injure consumers because of dangerous products, and cause pollution problems for a community. time and again it has been emphasised by Sociologists that white-collar crimes are particularly harmful to society for the reason that they are committed by people in power who are expected to set a moral example and behave responsibly.
Violent crime has always been subject to the limelight; almost a national obsession. It dominates the news, it’s the subject of popular novels, and it’s all over television as compared to our attitude toward white-collar crime. On the one hand, the question regarding the cognition of well-paid professionals committing it on their own, with colleagues, or as part of an organization fascinate us. On the other hand, complicated financial schemes bore us.
A conventional viewpoint expressed in Government reports and professional articles has maintained that the public does not view white-collar crime as serious, but few empirical studies have actually supported this opinion. In contrast, most research on perceived crime seriousness suggests that the public generally ranks white-collar violations as serious, especially embezzlement and activities which result in death or injury to individuals. Though they are less violent that does not affect its severity in any case. In certain cases, they cause an irremediable damage. People who have been victims of white-collar crimes end up losing all their savings which ultimately leads to ruining their families and committing suicide.
Implications of white-collar crime in India
The alarming rate at which white-collar crimes are growing has become a matter of global concern. The detriment caused to the society by white-collar crimes is much more compared to various other forms of crime. Owing to the reason that, India is a developing nation and such an unprecedented growth in white-collar crime thwart its image along with being a menace in the development of its economy.
White-collar crimes cause emotional traumas to the victims of the crime as well as society at large. Along with that, people start to question the authorities. If the authorities at higher positions, misuse their powers, who are they supposed to trust?
Also, as these crimes are burgeoning all over the country, people don’t find themselves secure anywhere, be it the physical world or the virtual world. The intent behind introduction of digital world to avoid tiring jobs like standing in the queue to deposit or withdraw money from the bank and reduce other sorts of physical labour, has been defeated. On the contrary, it has become the biggest platform for the commission of white-collar crimes. The most significant factor behind the flourishment of white-collar crime is the complicated nature of the method of committing such crimes. It acts as an impediment for the authority to get hands on evidence. Another attribute to its flourishment for such crimes is lack of media coverage. On numerous occasions, people who commit such crimes are bestowed with high power, buy the people responsible for its coverage or threaten them, in order to stop the media coverage of their illegal acts.
When India is moving steadily up the growth scale, enforcement agencies such as the Central Investigative Agency (CBI), Serious Fraud Investigation Office (SFIO), Enforcement Directorate (ED), Income Tax (IT), Department of Vigilance DFS of Ministry of Finance, SEBI, RBI and IRDA are duly motivated to improve their capabilities to meet the challenges of the changing scenario though reactive in nature. These departments which are the eyes and ears of the Govt for combating white-collar criminals are trying to revamp their capabilities in terms of manpower, technical capabilities and the spear of their activities. They either thinking or some have already of the way forward to cope with the rise in white-collar crimes to defend the greater economic interest of various investors.
A recent growth in the investigation process of white-collar crimes in India is visible. Owing to the increase in the anti-corruption marches, the companies are encountering a surge in internal investigation that act as a watchdog against any reprehensible activity and prevents the company from raids. India lacks a strict procedure to be followed while conducting these internal investigations relating to the white-collar crimes. “White-collar crimes are more dangerous to the society than ordinary crimes as they involve much higher financial losses and inflict public morale.”
There has been tremendous growth in white-collar crimes particularly. India, as a developing nation, has faced difficulties in leading its economy towards growth because of these crimes. The investigating officials are in dire need of training where they could acquire the skill to trace these criminals, tracking of whom is otherwise difficult and complicated job. Further, the government needs implement stricter laws that act as a deterrent and reduce the commission of such crimes. Further, an improved system for speedy disposal of present cases is the need of the hour, the want of which will result in people completely losing their faith in the system, in view of the fact that these crimes are committed by people who are perceived as a role model for the society. The media has a vital role to play in diminishing the rate of white-collar crimes. If the media becomes more active towards publishing frauds and scams at higher levels and revealing how do the people at higher position in a company use their powers arbitrarily, and also make efforts in making people aware about the white-collar crimes, and avoid corrupt practices, then this would definitely help in reducing the rate at which the white-collar crimes are being committed.