In India, there have been several Multi-Level-Marketing (MLM) frauds. Investing in stock shares and commodities, paid per click, investing in the IT sector, or investing in infrastructure have all resulted in scams. Aaryarup/ATCR, Unipay, Stock guru, TVI Express, and others swindle over Rs 10,000 crores.
Multi-level Marketing is a sales strategy by some companies to sell directly to the customers. The existing salesman encourages the new salesman to sell the company’s products to others and try to bring in others as recruits. This process goes on forever. Several layers of salesforce for direct sales (D2C) are the wireframe of MLM.
Most of these services do not register in India and siphon off money via unauthorized payment services. eCommerce fraud usually starts with a fake identity with a stolen credit card or the purchase of stolen data on the dark web. Initially, the fraudsters test the stolen card by making small purchases, which graduate to large purchases.
Sometimes even friendly frauds happen when a customer makes a purchase through an online transaction and then claims a chargeback from the payment processor claiming that the transaction was invalid. It enables them to receive the charged items for free.
Saradha Group Scam: an eye opener
The Saradha Group Scam was a chit fund company that took advance payments from people in the name of lands and houses. They attracted investors with money-back promises. The total amount scammed by investors amounted to Rs…
