Myntra, the popular Flipkart-owned fashion e-commerce platform, has recently been hit by a sophisticated scam that has led to significant financial losses, reportedly exceeding Rs 50 crore. This large-scale fraud, which unfolded between March and June of this year, involved the exploitation of Myntra’s refund system by a group of fraudsters who made bulk purchases of high-value items, including branded shoes, apparel, jewellery, and cosmetics.
The scammers placed large orders on Myntra’s app and then filed fake complaints about missing items, incorrect deliveries, or size mismatches. Once the products were delivered, the fraudsters would claim that fewer items were received, or that the products were either counterfeit or incorrect. For example, an order of ten pairs of shoes would be followed by a complaint claiming only five pairs were delivered, leading to a request for a refund on the missing items. Similar complaints related to incorrect colours and sizes were also raised, taking advantage of Myntra’s customer-friendly refund policies.
The company’s customer service platform, designed to handle legitimate issues, became a tool for this scam. The platform facilitated refunds with minimal verification, making it easy for fraudsters to exploit the system repeatedly. An internal audit eventually uncovered the scale of the fraud, revealing that over 5,500 fraudulent orders had been placed in Bengaluru alone.
Further investigation traced the fraudulent activities to a gang operating out of Jaipur, Rajasthan. These criminals used Bengaluru and other metro area addresses for delivery, often choosing unconventional locations like tea stalls, tailor shops, and small stores to receive their parcels. This made it difficult for authorities to immediately identify the fraud, as the delivery locations were not typical residential addresses.
Myntra reported the issue to the Bengaluru police, lodging an official complaint for Rs 1.1 crore in losses incurred within the city. The company had initially planned to file a nationwide complaint, but local authorities advised limiting the scope to Bengaluru-specific incidents. However, reports from Times of India suggest that the total nationwide loss could be significantly higher. The investigation is ongoing, with authorities working to trace the scammers and possibly recover some of the lost funds.
This fraud case has raised concerns about the vulnerability of e-commerce platforms with generous refund policies, as the same tactics have been used against other companies. For instance, Meesho, another e-commerce platform, was recently targeted by a similar scam, resulting in losses of Rs 5.5 crore. In this case, cybercrime police in Surat, Gujarat, arrested three individuals involved in posing as both suppliers and customers.
Myntra’s fraud investigation continues as the company works to tighten its processes and prevent such fraudulent activities in the future. The case serves as a reminder of the potential risks associated with online refund systems and highlights the importance of robust verification procedures to safeguard against such scams.
