Paytm Directors Booked for Alleged Involvement in Fraud of Rs 22 lakh; But Are they Really Responsible?


On Saturday, the Directors of Paytm were booked by Madhya Pradesh police in a case of allegedly aiding a forgery of Rs 22 lakh with over 300 people across the state.

A group of fraudsters called up gullible customers and identified themselves as a bank manager, calling for providing easy loans or an executive of placement agencies with job opportunities by paying up small amount of money as registration fees through debit or credit cards. During conversations, the accused claimed that there was a problem with the ATM card of the customers and asked for the ATM and pin numbers on the pretext of changing the ATM card and pin number. As soon as the ATM card and pin numbers were given, the customers received an alert on their mobiles about the amount debited from their accounts, reports

A case has also been registered against directors of Xenon Value Services India Private Limited, Vtech ventures, designing hub and

In a media statement, the police confirmed that Paytm’s Directors Vijay Shekar Sharma and Harendra Pal Singh have been named in the FIR under sections of forgery and IT Act.

Addressing a press conference, police officials said that the fraudsters used Paytm as the payment gateway for the illegal transactions. Adding to the comment, the police stated, the company authorities are well aware of those the accounts to which transactions were made.

A person close to the development told iamWire that “It has been brought to our notice by a section of the media that an FIR has been filed against Paytm and some of our teammates. Reports say that some bank  / card details were used on Paytm while user did not know of any such usage.  We are yet to receive any information/intimation on the same from the relevant authorities. We would like to clarify that that we are the payment gateway in the transactions mentioned in the media reports, and not in any way the beneficiary of the purported fraud. If there are any fraudulent merchants who are guilty of violating consumer trust, they will be removed from Paytm’s payment platform immediately.

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We work very closely with the banks to minimize fraudulent transactions and have stringent measures in place. Whenever there is any intimation of a customer’s payment instrument being misused by a potential fraudster, we suspend that account and inform the bank. The bank subsequently blocks the financial instruments used. In all these measures, the main objective is that the customer does not suffer any financial loss.

Consumer trust is paramount to us and news of this type is distressing to us. We have never compromised on our services and deliverables, and will do all that is required to prevent any inconvenience to our customers.

Paytm has always cooperated with all security agencies and will co-operate and provide every required information to the authorities if required. This seems a case of some misunderstanding.”

iamWire Take:

With over 60 million transactions per month, Paytm stands as one of the biggest mCommerce companies in India. What’s appalling in this matter is that the police is holding a payment gateway responsible for the lack of payment security awareness among the common folk. The company indeed would be having details of the transactions, but it can’t possibly know if payments are being made with stolen details. The case is somewhat similar to the Snapdeal blame game that has been seen over social and digital media where certain consumers receive incorrect orders due to error at the seller’s side. There is a dire need for educating the country about the Internet economy and the importance of keeping their bank account/debit card details safe to avoid such fraudulent activities in the future.

  • Manish Kumar

    Couldn’t agree more on this, Varnana. There should be a system where people are educated about these fraudsters. The next big money will come from Tier 2-3-4 cities and people should be educated about it.