High-profile raids across India's commercial capital Mumbai last week have blown the lid off a multi-million dollar scam involving 630 employees of a fake business outsourcing company that has cheated and robbed US citizens of thousands of dollars over a year. The episode, police say, suggests the existence of an entrenched international racket with its lynchpin in India.
Under the scheme, call center workers would impersonate tax officials and blackmail Americans in the name of “tax irregularities.” The owner of one of the companies, reportedly based in the US, allegedly stole information and passed it on to the call centers for a fee. The firm's executives -- who were trained rigorously to acquire an American accent -- would then call the clients pretending to be tax investigators.
"This scam could just be the tip of the iceberg," cautioned Parambir Singh, Police Commissioner of the city of Thane near Mumbai who led the raids. "There's a real possibility that such rackets could be prevalent in other parts of the country too."
Police are now pursuing leads to find out whether the racket has spread its tentacles to the UK and Australia as well. US. Investigators suspect the scam to be a part of a bigger international racket because of the ease with which it was being orchestrated over the past one year.
According to police, fake IRS agents, many of them Indians, targeted more than 366,000 people across the US with threatening phone calls demanding payments. More than 3,000 US citizens fell prey to the hoax, in which the scammers intimidated their victims with threats of serving jail time if their demands were not met.
The conmen collected a whopping $15.5 million with one victim reportedly losing over $500,000. The fraudsters would acquire the contact numbers from hackers or the black market and forward them to the call canter. Financial details of US citizens would be offered in bulk, the data costing about US$2,000 for 10,000 contacts, a police source told AS.
In another such episode in 2013, a Delhi BPO – Max Infotech – is said to have swindled about 60,000 British citizens out of £10 million while operating from a nondescript call canter in northwest Delhi. The criminals would target British citizens who had been termed as “loan defaulters” and lure them with guarantee-free loans.
"Such citizens become easy targets as they are willing to do anything to secure a loan without a guarantee," said inspector Rakesh Sharma of the Delhi Police, who was part of the investigations. "Most victims were cheated of small sums ranging from £90 to £250 but one victim was fleeced for £200,000."
Sharma pointed to a wide array of frauds which have come to light in India with the growth of the BPO industry. In 2006, two employees of Intelenet Global, a Mumbai-based BPO, were found tampering with credit records of 400 customers in the US. In 2005, MsourcE, a Pune-based company, was caught siphoning off about US$425,000 from the Citibank accounts of four New York-based account holders. The UK-based tabloid The Sun, in a sting operation, purchased the bank account details of 1,000 Britons for about US$5.50 each from a Gurgaon-based BPO firm Infinity E-Search in 2005.
Experts say telemarketing frauds are getting increasingly sophisticated and their frequency is also increasing thanks to exponential growth in the Indian BPO industry. According to a Confederation of Indian Industry Report "The Indian Services Sector: Poised for Global Ascendancy," released this year, the Indian IT-BPM sector continues to be one of the largest employers in the country directly employing nearly 3.5 million professionals.
India's IT prowess, as well as its primacy as a global BPO destination, are well recognized. The country has also been ranked by A T Kearney's 2016 Global Services Location Index as the world's biggest outsourcing destination out of the total 55 countries analyzed in three categories - financial attractiveness, people skills and availability, and business environment. Off shoring to India remains a high attractive proposition for many companies, notes the study.
The Indian BPO industry has also witnessed unprecedented growth powered by enhanced efficiency, enabling transformation and agility and partnering for digital initiatives. In FY2016, IT and BPO industry lobbying body NASSCOM expects the industry to add revenues of US$20 billion to the existing industry revenues of US$146 billion.
"This kind of fraud is a relatively new trend,” said Pawan Malhotra, a cybercrime specialist. "BPO companies that are not getting enough business are increasingly resorting to such tactics to prey on unsuspecting people and make a quick buck."
Stakeholders worry that for Indian investigating agencies cybercrime is unchartered terrain which creates loopholes for dubious operators to exploit. “The BPO industry is on a weak wicket here,” says Malhotra. "The Indian police is not as cyber savvy as it should be which encourages such scams.”
However, NASSCOM has been working in synergy with global consumer protection agencies to bring the erring companies to book. The industry has also created a Consumer Interest Protection Taskforce to craft a framework to help government departments deal with telemarketing frauds.
Perpetrators of such cybercrime in India can also be prosecuted under various sections of the Information Technology Act as well as the Indian Penal Code, as “electronic forgery, nuisance, mischief and criminal intimidation. But analysts add that though these initiatives have whittled down the instances of fraud originating from call centers in India, they have not weeded them out completely. Scam artists have apparently learnt to stay a step ahead of the police.
The best way out, suggest IT experts, is to launch public sensitization drives to inform people about such frauds. “Taxpayers must be more aware of the risks and better protected from attack and criminals must be found and brought to justice,” Malhotra said.
The criminals are getting more and more audacious, he added. "The message from the police should be simple. If someone calls unexpectedly with aggressive threats for payments, and dire consequences, do not pay heed to the caller. Instead, call the police immediately. "