iNDICA NEWS BUREAU
Indian financial technology company Paytm has filed a petition seeking Rs 1 billion ($13.24 million) in damages from India’s cellphone networks, and the Delhi High Court has issued a notice on it.
The case will be keenly watched because it involves the biggest names in Indian business, including Airtel, Reliance Jio, and Vodafone.
Paytm, a brand that shot into the limelight post demonetisation in November 2016, has alleged that telecom service are not blocking cyber criminals who are defrauding Paytm customers by “phishing” — defrauding by disguise.
Paytm’s petition alleges service providers have violated rules framed to protect consumers from unsolicited phone calls and text messages, and have not checked while registering fraudulent telemarketers who pose as Paytm and steal sensitive information including account details and passwords from customers.
The petition said that some of these fraud telemarketers, a.k.a RTMs, also dupe customers into revealing their private information under the pretext of completing know-your-customer (KYC) formalities for Paytm wallets.
The court notice was issued to the ministry of communication, regulator TRAI and major mobile service providers, seeking their stand on the plea before the next date of hearing on June 24.
Paytm, founded in Noida, Uttar Pradesh by Vijay Shekhar Sharma, 42, had a meteoric rise post-demonetisation, emerging as a quick and easy payment mode as India sucked in and replaced 85 percent of its currency.
In March 2017, its e-commerce became a unicorn — an unlisted company valued at over $1 billion – when it raised $200 million thanks to Chinese e-commerce giant Alibaba.
In more recent times, however, the company has attracted less flattering coverage, including shouts and whispers that its e-commerce unit was floundering.
The Morning Context, an Indian tech-focused-media start-up, claimed that Paytm recorded 820 frauds in which its users lost Rs 18 million ($238,000) in April this year.