Flipkart's Seller Protection Fund protects sellers against fraud and the group exploited this.

Gang dupes Flipkart of Rs 17 lakh by exploiting companys seller protection planFlipkart/Facebook
news Crime Saturday, November 18, 2017 - 13:20

A fraud gang posing as online sellers has duped Flipkart of Rs 17 lakh. The Times of India reports that the Bengaluru-based ecommerce company, in its complaint to the Koramangala police, has mentioned nine suspects who are yet to traced.

Petlee Peter in his report writes that the gang exploited Flipkart's Seller Protection Fund (SPF) which protects sellers against fraud.

The fraud, according to police sources, started around early 2017. The suspected members of the gang registered themselves as sellers dealing in different products such as electronic items.

Under the SPF, sellers can automatically claim refund in case a sold product is damaged or lost in transit after it is returned from a customer, and the gang decided to make use of this policy.

Since the majority of the orders were from West Bengal, it is suspected that the gang too has been functioning from the state in East India.

Modus operandi

The gang used Flipkart to sell products to customers who were also part of the same group, an internal probe launched by the company in 2017 found. In its complaint, Flipkart said that each time, after a customer returned a product, the sellers told the company that they had not received the returned product. Following this they used to claim refund under SPF. Money was also credited to the accounts of the fake customers who also claimed refunds.

Rise in online frauds

With an increase in the popularity of online shopping, there has also been a rise in the number of related frauds.

In May, a woman from Bengaluru duped Amazon of Rs.70 lakh by 'returning' fake products over a year.

Last year, two youths from Rajasthan, suspected to be part of an inter-state gang, were arrested for allegedly duping Flipkart of Rs 1.05 crore and 152 mobile phones by falsely claiming that they were delivered empty boxes.

In 2015, TNM had reported how a family from Hyderabad made more than Rs 50 lakh by duping Flipkart and Amazon. According to the police, the gang had been operating for nearly two years then and were probably looking to make some quick money.

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