More fake BPO data entry scams

Fly-by-night BPO cos dupe investors
SHABANA HUSSAIN Monday, May 30, 2005 at 0039 hours IST

CHENNAI: After fraud cases involving fly-by-night non-banking financial companies (NBFCs), now it’s the turn of fake BPO firms to dupe investors.

It is not surprising that fraudsters are taking advantage of the BPO industry’s success to make quick money. Consider this. Recently, a company called Salient Online Solutions Pvt Ltd, posing as a Chennai-based BPO firm, duped hundreds of investors. The company managed to convince many that it was running a BPO concern with clients in the UK. The company enrolled employees in a pyramid scheme, under which a person who registered for Rs 3,000 was paid Rs 2,000 for every additional enrollment.

Industry players have expressed shock over this incident and many believe that this is the first of its kind. Says Ranjit Pisharoty, senior vice president, Lason India. “There have been instances of people posing as agents, promising large contracts. But this is the first time that a BPO company has cheated investors of their money. It is a shocking incident, however, this incident only reflects the popularity of the industry. This is a sunshine industry and everyone naturally wants to be a part of it,”.

Lonnie Sapp, chief operating officer, Office Tiger, agrees that the scam reflects the success of the industry. “The incident is a mark of success for the industry. The industry has become so lucrative that everyone wants a share of the pie. It is apparent that the investors were impressed by the success of the industry and wanted to make some quick money by investing in a company which promised them gains,” he says.

Sreeram Iyer, Scope International, head, Global Shared Services centre, says that any promising industry faces the problem of fraudulent operators. “Fraudsters will find a way to make money out of any industry. This time around, they have chosen the BPO industry which has been on an upswing for the last few years,”

Industry watchers say that though the scam reflects the popularity of the industry, the incident has also revealed the ignorance of the public about the industry. “No BPO company offers a pyramid scheme. The scam would not have been successful, had investors been aware of this fact,” says Mr Pisharoty.

The scam comes close on the heels of the Mphasis-Citibank fraud. So, is fraud becoming a menace for the BPO sector?