At the beginning of October, reports began to surface that Indian police had raided a series of call centers, arrested at least 70 individuals and were questioning hundreds. According to The Associated Press, the chargers were extortion, impersonation and information technology crimes. And the target? Americans.
Employees at the call center allegedly sent out thousands of calls and messages every day. So far in the investigation, it’s believed that these scammers collectively netted as much as $150,000 each day. These individuals would pose as U.S. tax collectors, threatening to involve American authorities if the payment was not promptly made. Other victims were directed to purchase specific gift cards for the purpose of transferring funds through card identification, rather than direct payments.
In a statement to the country’s Economic Times, the police commissioner of Thane, India, Param Bir Singh, said that “In one case, one of the victims shelled out $60,000 just to escape a so-called raid on his house by taxmen”. Bir Singh also stated that the amount stolen was “mind-boggling”, and that the current investigation “could be the tip of the iceberg”.
The police commissioner went on the explain how the fraud ring pulled off their massive scam. He says the accused obtained the toll number of the Internal Revenue Service (IRS) so that, when calls were made, the call identification for the IRS would show up on the victim’s phone.
According to the Indian media outlets, a call center employee may be responsible for alerting local authorities. After receiving the tip, the local police raided office buildings near the city of Mumbai. Hundreds of pieces of equipment, including hard disks and servers, were seized during the raid. Since then, U.S. authorities have contacted the Indian police departments and are now working together to investigate the scam.
American citizens are not the only victims of scams like this. Small businesses can easily fall victim to fraud, and to what is known as “friendly fraud”. Friendly fraud, or chargeback fraud, occurs when a consumer makes an online shopping purchase with their credit card and then requests a chargeback from their issuing bank. After, the cancellation, the consumer receives a refund. According to Visa, online merchants lost $11.8 billion to cases of friendly fraud in 2012.
According to Inc., a study conducted last year by Trustev, an e-commerce anti-fraud company, found that “17 percent of American consumers have disputed charges without contacting the online merchant. The scarier fact of the 1,000-person study was that 5.1 percent of those people admitted to deliberate chargebacks, with more than 20 percent saying that it ‘didn’t bother them very much’ or that it was ‘OK.’”
Fraud is crippling for both individuals and businesses; its negative affects unfortunately affecting both the short-term and long-term. Starting a business, for example, can be shut down because banks refuse to provide services to you. You become “too risky”. Thankfully, high risk specialists – like eMerchantBroker – are happy to work with merchants struggling with bad credit. The credit repair merchant account, for example, is specifically tailored to meet the needs of merchants dealing with this issue. While it can be devastating, overcoming the aftermath of falling victim to fraud is possible.