Bengaluru cops bust gang that exploited e-commerce loopholes

Police in northern Bengaluru have busted a 21-member gang that sent fake products to customers and profited from the refund policy. Based in Surat, Mumbai and Bhopal, the fraudsters targeted customers in Bengaluru, who ordered jewellery and other products on Meesho through the cash-on-delivery (COD) option, senior officers said.

The scam is estimated at Rs 70 lakh, according to police.

Some of the fraudsters worked for an outsourcing company that provides logistics services to e-commerce companies. Using order details, they sent customers fake products from their warehouse in Surat before the company could send the actual items and pocketed the payment upon delivery.

The operation was so sophisticated that the fake order carried an invoice containing all details given by the customer.

The fraudsters procured the details about the order, arranged for a similar fake product and packed it by mentioning all the details noted in the order in a fake bill.

In all cases, customers returned the fake products and claimed a refund, which DSPACE Technologies Pvt Ltd, a Bengaluru-based seller on Meesho, had to make. In some cases, Meesho penalised DSPACE for sending customers fake products, police officials said. 

Police arrested the suspects under the IT Act and for cheating following a complaint from Deepika H, Director at DSPACE Technologies. 

A spokesperson for Meesho confirmed that a few employees of an outsourcing company misused the data and gave it to the fraudsters. "DSPACE is a seller, not a logistics service provider. It is true that DSPACE had filed a case against certain third party delivery personnel over fraud related certain of its orders. As part of the investigation by the police, the issue was notified to us and as a law-abiding entity, we ensured full co-operation and support required to law enforcement agencies in their investigation. We remain deeply committed to maintaining stringent controls in our systems, as we continue to innovate and build for he next billion Indians," a spokesperson for Meesho said. 

Deepika told DH that DSPACE was a mere seller registered with e-commerce companies. The fraud happened through the outsourcing firm attached to e-commerce companies and that employees of DSPACE have nothing to do with the fraud, she added.

In her complaint, Deepika accused two logistics companies of stealing its data and delivering fake products to customers. 

Shivaprakash Devaraju, Deputy Commissioner of Police (North), told reporters on Monday that some outsourcing company employees identified the COD orders, and stole data about the buyers and sellers. 

According to the DCP, the gang delivered the fake products through third-party logistics companies. “They sent the fake products way before the actual orders reached the customer, and collected money,” he added. 

Police sweated it out for six months to crack the case. They used the QR code pasted on the package of the fake product delivered to the customer to trace the gang. Police contacted the logistics firm that delivered the fake product, checked the payment details and traced the bank account where the money was transferred, an officer said. 

Police first went to Surat and then to Bhopal, and made arrests there. Police have so far frozen Rs 19.45 lakh in bank balance and seized Rs 7.5 lakh in cash. Eleven mobile phones, three laptops and one hard disk were also confiscated. 

Three suspects have obtained anticipatory bail.