How an army of online criminals has turned India into a call centre fraud haven

While India is grappling with its own ‘Jamtara’-style scams perpetrated by domestic cyber criminals, another army of online criminals operating quietly in the hubs of the country’s back-end process management or BPO sector are creating havoc in many English-speaking countries around the world.

Only a minuscule part of this industry has turned rogue, but it is using the very infrastructure and human resources that helped the legitimate BPO businesses become the world’s business process management (BPM) leader.

According to various press releases from the police, it is clear that the victims are English speaking foreigners, primarily from US, Canada, UK and Australia. Over the last decade, they have fallen victim to scam calls from fake call centres operating from Delhi, Gurgaon, Noida and Kolkata, which are also among the leading hubs of BPM enterprises.

Modus operandi

There are few entry barriers to setting up shop; flouting KYC norms for tenants, some landlords rent out ready to use offices at approximately Rs 1 lakh per computer seat per month. All that’s required are a few laptops, steady internet connectivity and a few tables and chairs. Experienced recruits are not very hard to find at Rs 50,000-70,000 per month.

The scamsters, mostly former employees of genuine BPO companies, often introduce themselves to their victims as United States law enforcement agents, point to some fictitious anomalies in the victim’s tax returns and then “levy” a fine to fix it.

In other cases, they pose as technical support staff of large tech giants like Microsoft or Google or Apple, and charge them money for fixing non-existent glitches in their software. Apart from this, they also capture sensitive information such as credit card or bank account details that can be used later.

Since few victims complain and fewer complaints — lodged mostly in foreign jurisdictions — reach the Indian authorities, most recent police raids are suo moto in nature. The Indian authorities seem to have arrested 350 such scamsters and questioned 500 others but given the absence of complainants, these fake “tele callers” usually secure bail within a short time, making deterrence weak.

This scam-tainted money finds its way back to India using illegal hawala channels or even rented accounts.

COVID-19 didn’t pose a problem

Though the coronavirus-induced lockdown last year helped curb these operations for a while, it was too good to last.

The Gurugram Police raided a luxury hotel where the fraudsters had booked 35 rooms from where they were carrying out their operations.

Clearly, there is huge money to be made. It is also clear from various reports, that the police in cities like Gurugram, Delhi and Kolkata have been conducting an average of one raid per week to nab these fraudsters.

Now, many of these scamsters are reportedly following the examples of leading technology companies and adopting the work from home mantra. So, after a brief lull of two-three months last year, this fake call centre industry has sprung back to life.

Stepping up the vigil

As the complaints from victims or impacted companies started to be reported and in view of the reputational damage they inflict on India’s image as the world’s back office, the authorities begun to crack down on this proliferating menace. The Delhi Police has mandated that departmental action will be taken against officers if such operations are unearthed in their areas. This has resulted in increased vigil by the police.

Last year, the Central Bureau of Investigation (CBI) also got involved in cracking down on such transnational fraud. The CBI, City of London Police and US Department of Justice collaborated to bring the perpetrators to book. The CBI raided several companies in New Delhi, Gurugram, Noida and Jaipur and seized assets worth almost Rs 190 crore.

A recent Microsoft survey revealed that millenials are most susceptible to such frauds and more consumers (31 percent) actually lost money over the past 12 months than in 2018 (14 percent). The survey also found that 69 percent of Indian adults were exposed to at least one tech support scam over the last year.

These findings are alarming, not just because of the massive amounts involved at the aggregate level but also because it could damage India’s much-admired BPO sector.

Stringent and immediate steps are needed to curb this menace. Among other measures, the government could mandate much stricter KYC norms while issuing new SIM cards, tighten norms for verifying the antecedents of internet service providers and conduct regular checks on customer data of ISPs to verify whether their business is genuine.

Though these steps may not completely eradicate this problem, they will certainly make it much more difficult for the criminals.

The writer is a retired IPS officer — former Director General of Police — Odisha and Former Director General of the Central Reserve Police Force