With great power comes great responsibility! As history dictates, every time a new technology is introduced into the market, it’s immediately followed by numerous cases of abuse.
This is exactly what’s taken the Indian tech ecosystem by storm. Just earlier last week the FDA had ordered a FIR against Snapdeal founder Kunal Bahl and its directors. Yesterday another startup was booked by the police.
Paytm directors Vijay Shekar Sharma and Harendra Pal Singh were booked by the Madhya Pradesh police on May 3, for allegedly aiding a fraud of INR 22 lakh in which over 313 people were duped using the Paytm service. An FIR for Forgery under the IT Act has been booked against the directors.
A case has also been registered against the directors of Xenon Value Services India Private Limited, Vtech ventures, designing hub and apkacareer.com.
The fraudsters had called up customers, identifying themselves as bank managers providing loans or as executives of placement agencies with job opportunities requiring customers to pay a small amount of money as registration fees through debit or credit cards. On the call itself, the fraudsters said that there was a problem with the ATM card and thus asked the customers to share their ATM pin. The moment customers shared their ATM pins, they were alerted on their mobile about the amount debited from his account.
The accused, used mobile wallets such as “Paytm” as gateway to transfer money from the customer to their SIM card and use it for recharge, DTH and online shopping, as per the authorities.
The Other Side
On the condition of anonymity, a person close to the development, said that the company already takes special care of these fraudulent transactions and have stringent measures in place. Whenever there is any intimation of a customer’s payment instrument being misused by a potential fraudster, the company usually suspend that account and informs the bank. The bank subsequently blocks the financial instruments used.
The person further added, “Consumer trust is paramount to us and news of this type is distressing to us. We have never compromised on our services and deliverables, and will do all that is required to prevent any inconvenience to our customers. Paytm has always cooperated with all security agencies and will co-operate and provide every required information to the authorities if required. This seems a case of some misunderstanding”.
Also, in case if there are any fraudulent merchants who are guilty of violating consumer trust, they will be removed from Paytm’s payment platform immediately, he added.
It is to be noted that in this case Paytm is not in any way the beneficiary of the purported fraud. Dragging them into the case or filing an FIR is something which we believe isn’t right.
While indirectly Paytm is enabling these transactions by providing a platform, these kinds of scams are just a new avatar of the age old form of phishing scams that have plagued the world since the introduction of online and digital payments.
Ideally the banks and the RBI should bear responsibility for this. There needs to be a lot more awareness among consumers and stricter means of authenticating online transactions. While we’ve advocated for more lenient authentication methods for online transactions earlier, maybe a system where advanced customers can opt out of the stricter authentication methods will work out best for everyone.