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Some Basic Information About Scams That Are Prevalent in India

Feb 6th 2013 at 4:04 AM
Fraud Detectives Mumbai

People Stealing From You Isnt Cool

No other crime affects more people than property crime. Odds are that you haven’t been the victim of a serious violent crime, but I bet you’ve been the victim of at least one property crime. After all, three-fourths of all crime is property crime. The term property crime refers to all the types of crime that impact your property, including theft, fraud, burglary, arson, vandalism, Internet scams, car break-ins, and auto theft. I have actually been the victim of property crime on more than one occasion.

In this article, I discuss various types of property crime, and I attempt to explain why people commit them. Most large retailers employ some anti theft security, including loss-prevention officers (store employees who look for thieves), surveillance cameras, and electro-magnetic devices that sound an alarm when a thief crosses the store’s threshold with stolen merchandise. Sometimes retailers also lock high-value items in glass cases that only sales associates can open. If a loss-prevention officer spies someone hiding an item for a possible theft, she follows the person outside (making sure the person doesn’t pay for the item) and confronts him or her. The loss-prevention officer usually asks the thief to go back inside to wait for the police to arrive. The loss-prevention officer has no more authority than a private citizen, but, in most jurisdictions, private citizens are allowed to detain someone — making a citizen’s arrest — and even use some minimum force if the person has committed a crime.

Increasingly, however, stores are discouraging their loss-prevention officers from making citizen’s arrests out of fear of lawsuits by people wrongfully detained or injured in the process.

Scamming people out of their money

The Asphalt Scam The Honey Scam & Others

Enterprising criminals often come up with creative ways to separate people from their money. Have you ever had someone come to your home and try to sell you magazine subscriptions or frozen meat or honey? Once some guy stopped me in my neighbourhood (Andheri West) and said that he had some extra asphalt from another job and wanted to repave the potholed road outside my building for next to nothing. Mumbai does not have too many unpaved roads but yes there are lots of potholed roads! So while you pay him the money he claims to be bring the asphalt from a dump truck nearby and does the Houdini act!

Another prevalent scam in Mumbai is the Honey Scam. This scam usually takes place on a Sunday or on a public holiday when families are at home feeling bored and hungry. The scamsters are usually in connivance with the security guards of a residential or gated community and are promised a cut out of the proceeds. A team of scam artists will enter your apartment complex armed with what they claim is freshly squeezed pure organic honey! Some will camp downstairs while one of them will go from door to door informing the residents that they are selling pure honey by the kilos and come on fast downstairs or it will be gone soon! He will claim that they extracted the honey from some beehive on a tree nearby which is absolute BS! Beehives are rare in Mumbai’s polluted environment and scarce greenery. Besides even if beehives do exist they will probably be really small built under a roof and one cannot even extract a few teaspoons of honey from such hives let alone kiloliters of honey which these scamsters seem to have brought along in large canisters!

The Honey Scam is a beauty and can hoodwink even the smartest of people. Because there is no way of guaranteeing whether the honey is indeed pure on the spot and because honey purchased on the market is expensive, people think they got lucky and line up with large containers and purchase atleast a liter paying about hundred bucks per liter. I know intelligent CEO’s of companies who have purchased atleast half a dozen liters of this cheap jaggery-dissolved-in-water-concoction in one go from these scam artists! The scamsters end up making tons of cash and poor hapless residents of an apartment complex are left with kilos of liquid jaggery which hardens up within a day and which have to be thrown away while the scamsters have long disappeared into their villages!

Now, this offer for practically free asphalt, honey, Rolex watches or offers for magazines or frozen meat may be legitimate offers, but they are 99.9 % scams — attempts to cheat you by selling you an inferior product or no product at all.

Although some people have little sympathy for people who get scammed, saying caveat emptor (“buyer beware”), scammers often pick on the most vulnerable people, including the elderly and the rich, who can least afford a loss. Some of the most common scams are pyramid and ponzi schemes, which I distinguish here:

Pyramid schemes take many forms, but, generally, they involve a promise of large profits to people who recruit others to join a program that sells a product. So, an initial investor may recruit five people, who, in turn, all recruit five more people, who take orders for the sale of a product from still other people. The money goes to the people higher up in the pyramid. Usually there’s no product, or, at least, not enough product to fulfill all the orders, and the customers lose their money.

Ponzi schemes are very similar but generally don’t involve the sale of a product; they’re investment scams. The initial “investor” recruits other investors, who all pay money to buy into the scheme. Each round of new investors pays previous investors until the scheme collapses and the people at the bottom of the pyramid lose their investments. Both pyramid and ponzi scams have become much more common with the rise of the Internet. The Speak Asia scam being the one that received a lot of press in the recent past.

The Buildabazaar.com Scam

One more scam that is brewing and that I sense is going to go the Speak Asia way is http://www.buildabazaar.com/. This company’s partner signup program looks like a scam. They are obviously riding on the wave and enthusiasm of e-commerce amongst Indians and taking advantage of the hype and hoopla surrounding it by launching this program which the gullible public may easily fall for. This partner faq http://www.buildabazaar.com/partner/faq here states that members will have to pay 1 lakh of rupees to join and they claim that you will earn 20% for life! Only a fool will fall for lines like ‘Earn 20% for life!’

Read the following clauses that is included in this faq page on their website.

Is there a cost to become a partner?

Yes. There is a one-time non-refundable Partnership fee of Rs. 1,00,000 to be paid to become a BuildaBazaar Partner.

What are the targets for a BuildaBazaar partner?

The BuildaBazaar Partner would be given half-yearly targets of minimum of Rs. 5,00,000/-. In case the targets are not achieved the partnership is liable to be severed.
The targets may be reviewed and revised on an annual basis.

Now which average man or woman who signs up will exceed sales of 1o lakhs revenue in a year? Most of them are trying to get a job that even pays them Rs. 25,000/- per month! This essentially means that your one lakh down payment is gone into the pockets of their founders!

Now lets look at their business model in very simple terms. If you agree to becoming a sales partner for buildabazaar.com they are essentially hiring you to work as their sales agent and instead of paying you a fee you have to pay them Rs. 1 lakh! That is illegal and you can go to jail for that! On top of that you now have the unenviable job of approaching baniyas and convince them to open an ecommerce store! So you are going to go from store to store under the blazing Indian sun talking to mostly uneducated traders to open an ecommerce store by paying Rs. 10,000/-. Do you know how miserly Baniyas are? They are sellers not buyers and a baniya is smart enough to know that an ecommerce store selling chappals or screwdrivers online is not going to make them any money. So they will say, ‘Dhanday ka time hai, get lost!’ Look at the kind of people that a sales partner is expected to approach below according to the buildabazaar.com team -

Apparels (Men, Women, Kids, Bridal wear),Fashion Accessories, Mobile Phones & Accessories, Lifestyle (Footwear, Watches, Personal care and Beauty Products), Jewelry Stores, Book Store, Electronics Items, Car & Bike Accessories, Toys & Games store, Office supplies, Kitchenware, Foods (Restaurants, Bakery, Chocolates & Vegetable stores ), Home Décor & Furniture, Handicrafts, Gifts and Flower Shop, Fitness Machines and devices, Optical store, Sports Goods, Security systems, Computer Hardware and Software, IT Products, Healthcare Services and Products, Music & Entertainment (Posters, Movies, Events), Financial Services, Education Services,  Event Management, Fashion Consulting, Non-Profit, Travel, Miscellaneous hardware equipments.

Let me also make it clear that even big e-commerce storses like flipkart and jabong.com havent broken even yet and are losing crores every month. Do you expect to get 10 clients a month to make that one lakh of rupees as minimum sales from Buildabazaar.com? No way. To get one bania to open an ecommerce store would be a herculean task. Based on buildabazaar.com’s own estimates of 5% of customers converting into cash, it would require you to meet 40 banias to have one of them buy an ecommerce store from you! To convince 10 banias a month to buy an ecommerce store – do the math!

The buildabazaar team has it all figured out! They know that there is no way you will be able to meet their target revenues. They know you will drop out and your 1 lakh downpayment is theirs.

Remember any program, website or business which demands an upfront payment and then promises that you will receive regular income on the basis of some unproved product or service is a scam and anyone who falls for it will will quickly part with his money!

The Nigerian Scam

An e-mail from a “Nigerian official” offers you the opportunity to share in millions of dollars if you help place the millions in bank accounts overseas. But, first, you have to front several thousand dollars because the Nigerian official can’t yet access the millions. The label 419 scam refers to section 419 of the Nigerian legal code, which addresses criminal fraud. Scam artists often use Internet auction sites as hosts for scams and fraud because of their huge popularity. Typically, a person purchases an item and makes payment but never receives the goods. Some common indicators of a possible fraudulent transaction include the seller’s request for you to send payment overseas or a request for you to wire money directly to the seller. Wire transaction payments are almost impossible to recover. Internet sites are also hosts for selling stolen merchandise. For instance, burglars  and organized theft rings often use Internet auction sites to sell stolen goods.

A Nigerian scam

Following is one of a series of e-mails that a victim of a Nigerian scam received. The e-mail appears as it was actually written, with all the original errors and crazy syntax (the typo errors are not mine!). Nigerian scams are sent to millions and they rely on the law of averages. So if one in a million falls for this scam, their goals are accomlished. The goal of the e-mail is to convince the victim to keep making payments to the fraudsters with the promise that the victim will ultimately claim a $12 million inheritance. The victim in this case wired more than $100,000 to Nigeria!

I CHIEF OUSEGUN OBASANJO ,DCFR PRESIDENT AND COMMANDER IN CHIEF OF ARMED FORCES OF THE FEDERAL REPUBLIC OF NIGERIA. I WISH TO INFORM ALL OUR CONTRACTORS THAT AFTER MY MEETING WITH THE UNITED NATIONS AND WORLD BANK, IMF, INTERPOLE DIGNITARIES RECENTLY, THE FEDERAL HOUSE OF SENATE HAVE DECIDED TO RID OUR ECONOMY OF ENORMOUS DEBT BURDEN TO ENHANCE MORE INTERNATIONAL BUSINESS RELATIONSHIP BETWEEN MY GOVERNMENT AND THE INTERNATIONAL COMMUNITY.
SEQUEL TO MY LAST MEETING HELD IN THE WHITEHOUSE WITH PRESIDENT GEORGE BUSH, MY NEW SENATE PRESIDENT, MY VICE PRESIDENT, THE HONOURABLE MINISTER OF FINANCE AND ALSO THE ATTORNEY GENERAL OF THE FEDERATIONS (F.R.N.).

I HAVE DECIDED TO SETTLE ALL THE OREIGN BENEFICIARY(S) FUNDS THROUGH MY OWN BLISSFUL WAY, FOR WE HAVE SENT OUT MEMEBRS LIKE MR PAUL MOSELY WHO HAS BEEN CONTACTING YOU LATELY. I AM PERSONALLY ASSURING YOU THAT YOUR FUNDS WHICH WAS INHERITED, IS NOW SET TO BE WIRED INTO YOUR ACCOUNT WITHIN SIX HOURS.
(VICTIM’S NAME) RIGHT NOW YOU HAVE TO CONTACT MY PERSONAL SECRETARY AND INCQUIRE FOR HIM TO GET YOU A BENEFICIARY FILE AND FORM SO YOU CAN FILL AND SEND BACK TO ME FOR MY APPROVAL SIGNATURE TO ORDER FOR THE RELEASE OF YOUR RIGHTFUL FUNDS TO YOUR DESIGNATED ACCOUNT VIA WASHINGTON MUTUAL WIRE.

YOU WILL FIND BELOW THE CONTACT OF MY PERMANENT SECRETARY AND MAKE SURE YOU CALL HIM IMMEDIATELY FOR YOUR REQUEST.

Taking personal and credit card information:

Identity theft

The Internet has revolutionized many activities, including fraud. One of the most common types of Internet crime involves trying to obtain other people’s personal information, such as credit card numbers, Social Security numbers, and bank account information. This type of crime is called identity theft. Read my earlier article about identity theft pertaining to a recent case in Mumbai here. If you have an e-mail account, I’m sure you have seen examples of phishing: phony e-mails that attempt to get you to divulge confidential information. In effect, the sender is “fishing” for your information. Often, the sender accomplishes this task by spoofing: sending you forged e-mails that purport to come from entities you do business with, such as banks or credit card companies. In reality, the “entity” sending the e-mails is some guy in Slovakia or Kerblakistan who, after he gets your credit card number, uses it to make purchases at will until he reaches your credit limit. Because so much Internet fraud originates overseas, you can’t do much after you’ve been fooled. The Internet isn’t the only place where you find credit card theft. Some thieves who work in retail stores or restaurants use credit card readers to accumulate numbers and then charge items using those numbers, or they sell the numbers to other thieves via the Internet. I once prosecuted a man who was a barista in a high-end coffee shop. He retained a customer’s credit card number so that he could purchase an airplane ticket to Delhi after he murdered his family.

Thieves can also get your credit card information through muggings or mail theft. Although this method is less common than it was five years ago, law enforcement still deals with organized groups that steal mail from mailboxes, looking for credit cards or credit card applications to exploit. Often, ring leaders pay the street-level thieves with drugs and use the credit card information to buy goods for  themselves. Countries like the US have laws that specifically punish identity theft. These laws often carry greater punishment than other theft laws — including prison time. In India though we have yet to draft an anti theft law.

Overcoming identity theft

If you’re the victim of identity theft, you should  follow these steps:

1. Place a fraud alert on your credit report. This alert warns other creditors to check your identity before opening any new credit accounts in your name.

2. Review your credit report. You have the right to a free review of your credit report from the following agency that track credit CIBIL and their website can be found here - http://www.cibil.com/

Identity theft is one of the most widespread crimes in the world. The most common complaints about Identity Theft are the following:

✓ Foreign money offers (such as the Nigerian scam)

✓ Prizes, sweepstakes, and lotteries

✓ Internet auctions

✓ Shop-at-home/catalog sales (sites like Buildabazaar.com / Speak Asia

✓ Telephone services

✓ Work-at-home offers

Remember if you have been the victim of identity theft or any other offline and online fraud please do not hesitate to contact Amit Sen our chief investigator on +91 98195 80458 to investigate the matter privately and find evidence that can help you in legal proceedings against the criminal.

Atin Dasgupta is a Marketing Expert & co-founder of Alliance One – the best fraud investigation agency in Mumbai. Learn more about Atin’s background here.

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