Daybreak - Cybercrime syndicates running ad scams are thriving on Google and Facebook

Episode Date: July 12, 2023

Ad scams in India using tech platforms like Google, Meta, or even e-marketplaces such as Olx are becoming increasingly common and dangerously creative. People have been losing anything from a few thousands to even a few crore rupees to cyber crime syndicates who have  proficient, tech-savvy members.The amount of money consumers have reported losing to fraud that originated on social-media platforms has skyrocketed since 2017. Last year alone, people reported losing more than $1.2 billion to fraud that started on social media.What are the likes of Google and Meta doing to prevent these crimes? Is it enough?Tune in.RecommendationOn Google and Facebook’s watch, cybercrime syndicates flourish by Pratap Vikram SinghDaybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me. My interruptions, my analogies and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Ramon Ganesh, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording.

Intermission launches on March 23rd. To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Imagine you're going on a road trip with your friends and you want to buy some snacks for the week. Everybody wants to eat samosas, so you Google the name of a restaurant that you know that also delivers.

You call them up to place an order. The person who answers your call asks you to pay via GPA and you do. But he says that he has not received the money and he asks you to try again by typing a five-digit number on the GP app. He says it is some kind of a pin for his GP account. So you do it again. But again, this person claims that he has not received the money. You go over the same process a few times and the next thing you realize, you have lost almost a lack and a half from your bank account.

This is exactly what happened to a Mumbai-based doctor last weekend. The story was reported by the Indian Express yesterday. Something like this happened to Me Too a few months ago when I was ordering some wine from a store that I found through a Google ad. I'm not going to get into the details, but thankfully I sent something with Shady before my bank account suffered. afford any damage. Interestingly enough, the Ken reporter Pratap Vikram Singh wrote about this in detail in his recent story. Turns out, these sort of ad scams in India using tech platforms

like Google, meta, or even e-marketplaces like OLX are becoming dangerously common and quite creative too. Cybercrime syndicates have been swindling people of anything from a few thousand rupees to even a few crores. And placing these fraudulent ads on Google, Facebook, Instagram and marketplaces is one way for these crime syndicates to happily defraud unsuspecting users. Scammers also manipulate Google Maps, promote links on Google search, and they also host malicious apps on Google Play. The amount of money consumers have reported losing to fraud that originated on social

on social media platforms has skyrocketed since 2017. Last year alone, people reported losing more than $1.2 billion to fraud that started on social media. So what are the likes of Google and Meta doing to prevent these crimes? And more importantly, is it enough? Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nick Das Sharma, and I Don't Chase the New Cycle. Instead, thrice a week on Mondays, Wednesdays and Fridays, I will come to you with one business story that is worth understanding and worth your time. Today is Wednesday, the 12th of July.

Remember that show called Jamtar on Netflix about this little town in Jharkand where a bunch of young boys run a fishing scam? The actual town is infamous for being a hotbed for such crimes. And you know what? The crimes still have not stopped. Just this March, a man called Anil Nautial lost 10 lakh rupees in a scam that was traced back to Jamtara. In another incident, a man in New Delhi called Gopal Singh lost money while trying to buy an electric Ola scooter. When his efforts to apply for finance through Ola's app and website were failing, he noticed these ads pop up on his Instagram and Facebook.

They promised easy online booking and financing options. It was a trap set up by scamsters and Singh ended up losing $30,000. He went to the police. And both the FIR and the charge sheet that Pratap accessed clearly state that the scam originated with Singh clicking on a link on Instagram. The Ken reviewed copies of six FIRs and three charge sheets filed in similar cases in Mumbai, Delhi and New in Haryana. and they showed us a pattern. In all of them, these tech platforms and marketplaces were turned to account with scammers paying for fraudulent ads to deceive users. Warren Singler, news superintendent of police, carried out raids with over 5,000 cops at 320 areas across the district in Haryana in April this year.

He told again that during interrogation, it was found, that a majority of the accused were using Facebook for scamming. Another senior cop with Mumbai police told us that scammers also manipulate Google Maps, promote links on Google Search, and they also host malicious apps on Google Play. In the Gopal Singh case, among the ones that Delhi police caught were three key members. These people were the group's tech support. There was Saini in Delhi, TV Venkata Chala, and Nipal. Nagesh in Bengaluru.

Seni holds a mass communications degree from Delhi's IP university. And Venka Tachala is an engineering graduate. He told the Delhi police that there are many tech-savvy organized long-time members in the group who frequently asked him to modify website content and contact numbers. All this work is meticulously planned. Another group, mostly from West Bengal and Assam, helped them get SIM cards that were used in the crime. And of course, the syndicate's linchpin was the one managing all the money transfers. The police arrested 20 people from Bihar, Telangana, Haryana, West Bengal and Delhi.

So what are Google and Meta doing about all this crime that is being carried out through their platform? Stay tuned to find out. Despite the low poor capita ad revenue, big tech actually spends a lot of money and effort in India to ensure a clean ad ecosystem and also to deliver adequate returns for its advertisers, especially because it is their largest user market. Still, it seems like these platforms are not doing enough to keep these bad actors away. They often turn a blind eye to all of it, because in the end, they do get paid for these ads. You won't believe there was even a case when scammers used funds stolen from a victim's account

to pay their Google Ads bill. Someone close to Google told us that it has 20,000 employees, both regular and contractual, who handle its trust and safety teams globally. Another person who is close to Meta told us that Meta's team is twice the size. Teams within the trust and safety divisions look at ad integrity. They monitor and approve ad postings.

They reject the ones that appear genuine, but have an altogether different landing. page. They also match the ad content against ad policies for each sector. These teams are in-house and contractual. The contractual teams are the first line of defense to wet these ads. These contractual staff are supplied by vendors like Accenture and Cognizant. But according to the Ken's sources, Meta laid off 20% of its trust and safety team in the span of a year. Something like trust and safety in online ads is a combination of automation and human effort. Lesser number of people in the teams monitoring these ads is not a good thing.

In its email response to our questions regarding the matter, Google told us that it is constantly evolving and improving its technology and processes to ensure that bad actors, who are also constantly evolving with new techniques, can be identified and actioned in a timely manner. But having policies and places one thing and implementing them is another. Plus, our government's regulations are a bit too ambiguous and quite honestly a little too lenient towards these tech platforms. Coming up next, in the IT rules of 2021, platforms like Google and Meta are considered as intermediaries.

Intermediaries are defined as platforms that primarily or solely enable online interaction. action between two or more users and allow them to create, upload, share, disseminate, modify or access information using their services. The Ministry of Electronics and Information Technology regulates tech companies under these rules that protect these intermediaries by only expecting them to take down content after it is flagged. But we spoke to Rakesh Maheshwari who worked at the Ministry's Cyber Laws Division. and was also a part of the team that put down the IT rules of 2021. He told again that Google and Meta, which profit from the scam ads, cannot escape responsibility

by claiming to be intermediaries. They are effectively acting as publishers and should be directly accountable. Whether as publishers or as intermediaries, tech giants need to confront these problems that they have fostered. Because think about it. Once you are on any of these platforms, it is like you are swimming in a sea of predators. Who should be responsible for keeping you safe? Daybreak is produced from the Newsroom of the Ken, India's first subscriber-focused business news platform.

What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters, subscriber-only apps and podcast extras. Head to the Ken.com and click on. the red subscribe button on the top of the website. I am Snigda Sharma your host and today's episode was edited by my colleague Rajiv Sien.