India crackdown on telemarketers to curb SMS-based financial fraud

SMS fraud telemarketers
Image by Nsit | Bigstockphoto

India’s telecom and information technology minister has ordered officials to take strict action against telemarketers and individuals involved in harassment of telecom subscribers. He has also directed the authorities to set up a redressal system for mobile customers facing harassment through pesky calls and messages.

The new mechanism will allow financial fraud victims to lodge complaints in real-time either through an SMS or by using an application, which the Indian government will soon launch.

India will spend up to Rs 25 crore ($3.42 million) to develop the redressal system. It has also decided to set up a nodal agency, namely the Digital Intelligence Unit (DIU), to coordinate with various financial institutions and telecom service providers, to investigate any fraudulent activity involving telecom resources.

A telecom analytics for fraud management and consumer protection (TAFCOP) system will also be created at License Service Area level (LSAe).

The decision was taken after a high-level meeting chaired by Ravi Shankar Prasad, India’s Union Minister for Electronics & Information Technology, Communications and Law & Justice. The meeting was called to address the rising concern and irritation of consumers over unsolicited messages on mobile phones, repeated harassment through SMS, promising fraudulent loan transactions and to make digital transactions safe and secure.

Prasad observed that telecom resources are also being used to carry out financial frauds and dupe the common man of his hard-earned money.

The minister also ordered the Department of Telecommunications (DoT) officials to conduct a meeting with telecom operators and Tele-Marketers to apprise them of the seriousness of the issue and ensure the compliance of laid down rules and procedures in this regard.

In case of any violation, the government will impose a financial penalty against the telemarketers, including disconnection of resources in case of repetitive violations. Additionally, it can also block the SIM card along with the device itself.

During the meeting, officials pointed out that even the subscribers registered in Do-Not-Disturb (DND) service continue to receive commercial communication from Registered Tele-Marketers (RTMs) and further Unregistered Tele-Marketers (UTMs) are also sending commercial communication to the subscribers.

“The system will strengthen the trust of people in the digital ecosystem and will make financial digital transactions primarily through mobile more secure and reliable,” the Indian government said in a statement.

The Indian government’s latest decision came on the back of an intense legal battle between the digital payments industry and Indian telcos and the telecom regulator (TRAI).

Digital payments companies like Paytm and BharatPe had moved to the court seeking stricter enforcement of existing regulations to curb fake SMS headers by scammers to dupe customers.

Earlier this month, the Delhi High Court ordered the TRAI to ensure “complete and strict” implementation of the regulation by the telcos to curb unsolicited commercial communications (UCC) via short messaging service or SMS.

Paytm and its parent One97 Communications (OCL) had last year filed a writ petition in Delhi High Court seeking legal, policy regulatory directive to restrict fraudsters’ access to the bulk SMS packages sending fake messages and calls impersonating Paytm companies.

The petition highlighted that such fraudulent calls and SMSes result in a financial loss to its customers and severely damages the reputation of Paytm as a brand. Paytm had also sought damages of Rs 100 crore ($13.51 million) from telcos.

Internet and Mobile Association of India (IAMAI) had then supported Paytm and filed an intervention representing many Payments System Operators (PSOs) to support stringent implementation of TCCCPR.

Be the first to comment

What do you think?

This site uses Akismet to reduce spam. Learn how your comment data is processed.