India’s government on Friday slapped a $2 million fine on two online payment providers and warned that online fraudsters will face legal consequences if they continue to offer services to their users.
“The state government has taken strong action against a group of criminals who allegedly made fraudulent use of various payment and payment card services,” the National Payments Corporation of India said in a statement.
“If these criminals continue to engage in fraudulent practices and continue to make fraudulent use, the government will be compelled to take legal action against them.”
The NPCI said the two providers are ZeeBo and Proteus, two payment platforms that are owned by Reliance Industries Limited, the largest Indian company by market value.
ZeeBoom is one of the largest and most widely used online payment services in the world.
Proteuses service has been accused of fraudulently charging users for fraudulent transactions, while ZeePlus is one the largest payment services offered by Reliant Industries.
Reliance Industries and ZeeBO declined to comment on the fine.
Zeebo and Proterous have been accused by India’s financial regulator of using fraudulent means to make payments to customers through ZeePay and ProPro.
The companies, whose owners have not been named, are believed to have overcharged customers by about $1 billion, the regulator said.
The NPCi said the fraud is believed to be related to an ongoing criminal case.
“This matter was referred to the State Bank of India (SBIC) on November 19 and a fine of Rs. 2.4 crore has been imposed on the accused for the misconduct committed by them,” the statement said.
“Any person found guilty of committing any such conduct will be subject to legal proceedings under the provisions of the Payment Protection Act, 2013,” it added.
The NpcI said that the charges for fraudulent payments were made against Zee and ProTeus through fraudulents “stored on the company’s systems.”
According to the NpcIs, Zeebos payments were sent to customer accounts through a number of channels, including bank transfers, credit cards, and cheques, but ZeeBs payment was processed using ZeePro’s system, while ProTeuses payments were handled through ZEEPay.
The regulator said that it is not yet clear how many people were affected by the alleged fraudulent use.
However, it said that a majority of the affected customers were likely to be those using ZEEBoom, ProTeas, and ZEE Plus.