The “Classifieds” Fraud

I have been an avid user of platforms like olx and quikr to sell of my old goods for a long time now. I have always found legitimate and good buyers who got what they wanted. These platforms gave the statement of “One Man's Trash Is Another Man's Treasure “ meaning. Recently I have seen a very disturbing trend on these platforms where a whole lot of fraudsters have created fake profiles and using online payment solutions like UPI, paytm, PhonePay and gpay, try to defraud unsuspecting customers. This is a very disturbing trend and if continues will erode the trust of customers on these platforms to such an extent eventually leading to a cul-de-sac.

Their modus operandi – These fraudsters are on the prowl for newly posted advertisements. With a combination of their fake profiles on classifieds sites and upi payment technologies they execute their ruse.

Step 1: The fraudster sends you an offer matching your expectation on olx at times only a few hundreds or thousands lower.

Step 2: The fraudster either drops you an “Image” with his/her phone number and establishes contact.

Step 3: Small talk, the fraudster will appreciate your product and will give you context of where he/she works to sound legitimate. I was reached out by a number 87539-84567 stating he is a liquor shop owner recently moved to my area and was willing to buy my goods. Ironically his profile photo showed him in a liquor store.

Step 4: He/she will insist on a part cash part phone pay/gpay payment for your merchandise.

Step 5: The fraudster will send you a link/QR codes for apps like gpay and phone pay to make a payment for as low as INR 5 to gain trust. This is the interesting part; On a call with you they will indulge in equivocation as they twist the words like “Pay” in a way that it will sound to you that when you click “Pay” they will pay you. Below is an instance of a fraudster asking me to make a payment of INR 10 using a phone pay link which i thankfully declined.

Step 6: Once the transaction is done they disappear.

My Solution:

Both online market place providers like olx,quikr etc and online payment providers such as Phone Pay, GPAY, Paytm etc should ask for KYCs documents of their respective customers or a INR 1 credit card transaction in order to establish identity of their customers allowing them to put up advertisements. In case a fraud is detected the companies should freeze the accounts of such fraudsters pending investigation from a competent legal authority.

Conclusion:

Platforms do their bit to block such users but by the time a block is initiated the damage is already done. I feel these platforms like olx/quikr should leverage technologies like AI and invest more in fraud detection as well as customer KYCs tools/technologies to build an enhanced due diligence framework which will allow only legitimate customers to be active on the platform. This will re-enforce the trust of their customers towards a transparent and legitimate platform thereby ensuring their longevity. #olx #phonePay