Digital Fraud and Consumer Protection in Online Transactions: Emerging Challenges, Regulatory Frameworks, and Technological Interventions in the Indian Digital Economy

The rapid proliferation of digital commerce platforms, mobile payment ecosystems, and omnichannel retail architectures in India has simultaneously created unprecedented economic opportunities and grave vulnerabilities to digital fraud. This study investigates the multifaceted dimensions of digital fraud affecting online consumers in India and critically examines the adequacy and effectiveness of existing consumer protection frameworks in addressing these challenges. Adopting a descriptive and analytical research design, the study synthesizes primary data collected through a structured questionnaire administered to 250 online consumers across metropolitan and tier-II cities in India, supplemented by secondary data drawn from regulatory reports, judicial pronouncements, and industry publications from 2020 to 2025. Findings reveal that phishing attacks, Unified Payments Interface (UPI)-based fraud, identity theft, and counterfeit product listings constitute the most prevalent categories of digital fraud encountered by Indian consumers, with a significant correlation between consumer awareness and fraud susceptibility. The study further establishes that technological interventions—including Artificial Intelligence (AI)-driven anomaly detection, blockchain-based transaction verification, and real-time data analytics—significantly moderate fraud incidence when integrated into platform architectures. Consumer trust is identified as a critical mediating variable between perceived risk, platform security, and sustained engagement in digital commerce. The study recommends a convergent framework combining enhanced legislative teeth for the Consumer Protection (E-Commerce) Rules 2020, mandatory AI-driven fraud detection systems for payment platforms, and structured consumer financial literacy programmes. The findings bear implications for policymakers, e-commerce operators, financial intermediaries, and academic researchers working at the intersection of digital commerce and consumer rights.