Scammers Defraud Myntra of ₹50 Crore: Biggest Refund Scam with Fake Orders Uncovered

You may have heard of frauds involving e-commerce websites, but learning about a major scam on Myntra, Flipkart’s fashion brand website, might seem surprising. A gang of fraudsters has reportedly carried out the largest refund scam on Myntra.

Company Audit Reveals ₹50 Crore Scam

An audit by the company exposed a ₹50 crore scam carried out by the fraudsters. The gang exploited Myntra’s return policy to commit this fraud. The company discovered this scam during a routine audit.

What is the Refund Scam?

Scammers placed large orders for high-value items such as branded shoes, clothing, and accessories. Upon receiving the orders, the fraudsters would file fake complaints, alleging issues such as missing items, incorrect deliveries, or undelivered parcels. Myntra’s policy provides refunds for such complaints, including cases of mismatched items or incomplete deliveries.

How the Fraud was Conducted

According to a report by TOI, a gang operating in Jaipur, Rajasthan, orchestrated the scam. Almost all fraudulent orders originated from Jaipur, with delivery addresses in Bengaluru and other metro cities. Some orders were delivered to tea stalls, tailor shops, or stationery stores.

₹1.1 Crore Loss in Bengaluru Alone

The scam was well-coordinated, involving fake orders placed across the country, causing Myntra a total loss of ₹50 crore. In Bengaluru alone, 5,529 fraudulent orders were identified, leading to a reported loss of ₹1.1 crore, which was filed with the police.

Police Comments on the Scam

Explaining the scam, police stated that a person might order 10 branded shoes but claim to have received only 5, subsequently claiming a refund for the remaining 5. This loophole in the company’s refund policy was exploited. The scam surfaced between March and June this year, and the total loss might be even higher.

Meesho Also Targeted in Similar Fraud

A similar case recently came to light involving another e-commerce platform, Meesho. Police arrested three suspects in Surat, Gujarat, who scammed Meesho of ₹5.5 crore using the “order and return” method.

Flipkart is Myntra’s Parent Company

In 2014, Flipkart acquired Myntra for ₹2,000 crore. At the time of acquisition, Myntra had 1,000 brands and 1,50,000 products. Despite the acquisition, Myntra continues to operate independently.