A software glitch in digital payments company MobiKwik’s systems allowed users to siphon off around Rs 40 crore via multiple Unified Payments interface (UPI) transactions, according to a report by the Times of India.
A MobiKwik employee reported the financial breach on September 13, following an internal audit that detected suspicious transactions on September 11 and 12.
So far, law enforcement authorities have arrested six men, five from Nuh, Haryana and one from Palwal, Haryana, whose accounts held Rs 9 lakh of the siphoned-off amount. The police have sent these men, namely Rehan, Waqar Yunus, Wasim Akram, Mohd Amir, Mohd Ansar, and Mohd Sakil, to judicial custody and may make further arrests.
For context, the glitch appeared after the digital payments firm updated its software earlier this month. This update reportedly allowed MobiKwik users to send much higher amounts relative to their digital wallet balances. Transactions were also successful even if a user entered the wrong Personal Identification Number (PIN).
“We don’t know yet how the scamsters learned about the flaw. Insider involvement is being probed,” a police source told the The Times Of India.
Law enforcement authorities also confirmed that they had frozen Rs 8 crore across various bank accounts, and identified 2,500 beneficiaries related to this scam
Police Urge People to Come Forward
Police spokesperson Ashok Kumar said that strict action would be taken against any MobiKwik employee found complicit in this crime.
Meanwhile, Nuh Police on Tuesday urged people to report any unexplained digital transactions on September 11 and 12.
“If anyone received transactions on Sept 11 and 12 due to technical security lapses or other reasons via the Mobikwik app or received unauthorised payments through the app and wishes to return them, or has any complaints related to such transactions, they can visit the office of the SP. People from Palwal district and other Mewat areas can also come,” Nuh Police stated.
Law enforcement has registered the present MobiKwik case under Sections 318(4) (cheating) and 314 (dishonest misappropriation of property) of the Bharatiya Nyaya Sanhita (BNS). The police are coordinating with banks to identify others who benefited from the alleged fraud and recover the stolen amount.
MobiKwik’s Recovery Efforts
A MobiKwik spokesperson said the company is pursuing aggressive recovery efforts along with legal action. The digital payments firm has recovered Rs 14 crore so far.
“The company is undertaking all possible and necessary efforts to recover the amount. However, since the police investigation and recovery efforts have just started, it’s not yet possible to ascertain the impact,” the spokesperson stated.
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“Based on the preliminary data, as a risk mitigating measure, the FIR was lodged for an amount of Rs 40 crore, out of which, the company has recovered Rs 14 crore. Thus, the…
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