Police conducted a dramatic midnight raid at a call center in the country’s commercial capital of Mumbai and detained 770 employees for questioning. Seventy were later charged with fraud, wrongful impersonation and violating the country’s Internet safety law. The call centers were making more than $150,000 a day through scams that took place for a little over a year, police said. The callers told their American victims they were conducting a “tax revision” or that they had defaulted on payments to the IRS and would then obtain their personal financial information and withdraw money from their bank accounts, per Param Bir Singh, a senior police officer in Mumbai who led the raid. It was one of the largest such raids in recent memory, he added. “These are the people who bring a bad name to India’s IT industry, and it is very important to weed them out,” Singh said. In Washington, the Internal Revenue Service declined to comment on the arrests.
More than 200 police officers descended on a tall, glass-fronted office building where the nine call centers were operating during the midnight raid after being tipped off by neighbors. “It looked like a regular office building and employed a lot of young people who spoke English and had a good knowledge of computers,” Singh said. “It was a very sophisticated operation they were running.” Meanwhile, in another call center in a suburb of New Delhi, workers allegedly duped thousands of American citizens by offering to remove a virus from their computers, police said. On Sunday, police in Noida arrested six people for running a call center that sold insurance to Indians by day, but allegedly tricked American consumers by night with fake offers of tech support to correct malware and viruses. It was not the first time that fraudulent call centers targeting U.S. citizens have been raided in India. As more and more American businesses outsourced their back-end operations to India in the past two decades, a thriving IT industry arose here, employing millions of English-speaking software professionals. But some have also taken advantage of the trend and found ways to access data of U.S. customers and defraud them.
Call center crimes targeting Indian customers have also become a big “nuisance” for Indians, said Raj Kumar Mishra, deputy superintendent of police in Noida’s special task force. In the neighboring state of Uttar Pradesh, for example, such crimes have increased 4,300 percent in the last five years. Most of the complaints are about online bank frauds and callers who try to access customers’ ATM identification numbers, he said. Nearly 300 people involved in such crimes were arrested in the state last year. “There are leakages from unscrupulous bank staff who are selling the customer data illegally. That is a hole we have to plug,” Mishra said. The state is now setting up two police stations that will handle cases of call center and online fraud exclusively. Earlier this year, another operation was busted here that ran illegal Internet-calling exchanges in New York and Noida and offered cheap rates for callers, Mishra said. The U.S. Federal Trade Commission reported to the Senate Judiciary Committee in June that Indian call centers, much like similar fraud operations in Jamaica, are emerging as a source of concern. The FTC said it took part this summer in a law-enforcement training program in India, “aimed at developing Indian law enforcement’s capacity to arrest and prosecute India-based individuals who perpetrate these frauds.”
It took the big raid in India to slow down this IRS impostor scam that resulted in thousands of people, many of them retirees, being bilked out of millions of dollars. The Better Business Bureau said last week that the hustle accounted for about one in four reports to its scam tracker. But the organization says it has seen a “dramatic drop” in new reports after police in Mumbai, India raided the call center. Since then, complaints to the BBB Scam Tracker site have dropped 95 percent.
The IRS scam has been well reported in the U.S. The scam involves con artists posing as IRS agents who tell their targets, mostly older Americans and retirees, that they owe back taxes and threaten them with arrest and penalties if they don’t pay immediately. And they demand payment through money orders or gift cards available at supermarkets or drug stores.
Police in India earlier this month said they had shut down nine call centers in Mumbai that had been bilking Americans, and arrested 70 people. The callers were trained to speak in American accents and were allegedly pulling in about $150,000 a day. If the scams went on for a year, that would amount to $55 million. The IRS said it had received nearly 1 million complaints about the calls and said more than 5,000 people were victimized, paying more than $26 million in the scammers.
“To immediately see the success of this raid reflected in our BBB Scam Tracker data is remarkable, and validates our belief in the importance of using reports from the public to better understand the scam landscape,” says Emma Fletcher, manager of the scam tracker program. “But we know from experience that scammers are opportunists. Hopefully this crew won’t be stealing from anyone again for a long while. but we will be keeping an eye on incoming scam reports so we can alert consumers what the next big thing in scams turns out to be.”