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FIR against Paytm directors: MP police seem to think Paytm can read minds


It’s common knowledge that one shouldn’t share their ATM card details and PIN number or for that matter any other bank account related information with someone they don’t know, either over phone or online. And if one does share such information and a fraud is committed using it, should the physical shop or the online store where the fraudsters used the stolen money be held accountable for it. The logical answer is obviously no, but Madhya Pradesh police seems to think otherwise.

They have filed an FIR under forgery and the IT Act against One97 Communications director Vijay Shekar Sharma and Harinder Pal Singh Thakhar, which owns mobile wallet service provider & online marketplace Paytm*, and few other online portals for allegedly fraud transactions carried out on these platforms, reports The Times of India.

Modus Operandi: The fraudsters called customers posing as bank managers offering loans or placement agency executives with job opportunities for which they had to pay a small fee. During the conversation, they claimed that there was an issue with the customer’s ATM card, and asked for the ATM card number and PIN number to resolve the issue. On being given the details they used online payment gateways such as Paytm’s wallet to transfer money from the customer’s account to their mobile phones, and used it to recharge their phones or for online shopping.



The TOI report mentions that according to Madhya Pradesh police the company authorities were aware of the accounts to which these fraud transactions were made. Isn’t that obvious? Paytm would naturally be aware of any transactions made on its platform, but unless they have the precogs from Steven Spielberg’s 2002 sci-fi movie Minority Report working for them – how are they to know that the transactions were carried out using stolen card details?

Even in case one or more merchants on Paytm’s platform were involved in this fraud, the platform itself isn’t liable as per Indian law, if it didn’t knowingly abet the fraud. In India, Section 79 of the IT Act proffers safe harbor to intermediaries (marketplaces, aggregators and platforms), as long as they act on complaints and do not knowingly allow the usage of their platform to break the law.

The report also mentions that so far 313 people across Madhya Pradesh have been duped and over Rs 20 lakh has been stolen. Directors of Xenon Value Services India Private Limited, Vtech Ventures, designing hub and apkacareer.com have also been named in the FIR.

It also needs to be pointed out that customers need to be more careful of such phishing scams. Fraudsters have previously used RBI’s name and even that of its governor Raghuram Rajan for such scams. See here and here.

A Paytm spokesperson told MediaNama that:

It has been brought to our notice by a section of the media that an FIR has been filed against Paytm and some of our teammates. Reports say that some bank/card details were used on Paytm while user did not know of any such usage. We are yet to receive any information/intimation on the same from the relevant authorities.
We would like to clarify that we are the payment gateway in the transactions mentioned in the media reports, and not in any way the beneficiary of the purported fraud. If there are any fraudulent merchants who are guilty of violating consumer trust, they will be removed from Paytm’s payment platform immediately.
We work very closely with the banks to minimize 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, we suspend that account and inform the bank. The bank subsequently blocks the financial instruments used. In all these measures, the main objective is that the customer does not suffer any financial loss.
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 Read: On the responsibility, accountability and liability of platforms, marketplaces and aggregators

*Disclaimer: Paytm is an advertiser with MediaNama

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    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ