E-commerce Fraud In India Now Mirrors Jamtara Scams, Reveals New Report

India’s fast-growing e-commerce sector is facing a new wave of organised fraud that resembles the scale and sophistication once associated with the infamous Jamtara banking scams. A new report suggests these are no longer isolated incidents but part of coordinated, industrial-scale operations exploiting platform systems.

What does the report reveal about the scale of fraud?

An analysis of 70 million marketplace users by AI-powered risk decision platform Bureau shows that fraud in e-commerce has evolved into a highly organised ecosystem. The study mapped 256 fraud clusters involving around 45,000 accounts linked to just 9,000 devices, highlighting how a relatively small infrastructure can generate massive fraudulent activity.

These networks are able to automate actions at high frequency, with some accounts logging more than 50 activities within a single hour, indicating machine-driven operations rather than human behaviour.

What are “device farms” and why are they central to these scams?

At the heart of these operations is the concept of device farming. A device farm is a setup where multiple smartphones are operated together to control hundreds or even thousands of accounts simultaneously.

The report notes that “an average of 1 in 6 risky devices having more than 10+ accounts associated with the same device, which is typically a sign of a 'farm'...At the core of these patterns is device farming.”

This infrastructure allows fraudsters to switch between accounts at speeds impossible for individual users, enabling large-scale exploitation of platform features.

How are fraudsters exploiting e-commerce platforms?

Fraud networks are misusing growth-focused features such as referral bonuses, return policies, and cash-on-delivery options. What may seem like customer-friendly tools are being turned into entry points for abuse.

Ranjan Reddy, Founder & CEO, Bureau, said, “Promo abuse isn't petty theft. It's industrialized. Fraud has evolved beyond stolen cards into coordinated, cross-platform operations. We have found device farms running thousands of fake accounts simultaneously across multiple platforms. Bureau's network intelligence sees these operations cross-platform because a fraud ring doesn't attack one app at a time.”

The report suggests that promo abuse is often just the starting point, used to identify more valuable targets within the system.

Are these frauds limited to discounts and promotions?

No. While referral and promo abuse may be the visible layer, the deeper objective is far more serious. Fraudsters scan accounts to identify those with saved credit cards or linked digital wallets.

Once identified, these accounts become targets for direct financial theft, making the operation far more dangerous than simple discount exploitation.

What patterns indicate organised fraud activity?

The report highlights unusual behaviour patterns that strongly suggest automation. For instance, a single account logging in from Gujarat and Bengaluru within 30 minutes, or appearing active across 70 different locations.

Such anomalies point to account cycling through device farms rather than genuine user activity. These operations are particularly concentrated in major urban hubs like Delhi, Bengaluru, and Noida.

Some platforms even recorded up to 15 times the usual number of users operating multiple accounts, indicating how platform incentives can inadvertently fuel fraud.

How is return fraud becoming a major concern?

Return abuse is emerging as another systematic tactic. Fraudsters order high-value products and return empty boxes or counterfeit items, exploiting lenient return policies.

Although only 0.95 per cent of users were flagged for such behaviour, this small segment accounts for a disproportionately large share of losses, showing how a tiny fraction of users can inflict outsized damage.

What challenges do platforms face in stopping this?

The biggest challenge is balancing fraud prevention with user experience. Since 99 per cent of users are genuine, overly strict controls can hurt growth and customer trust.

Ranjan Reddy noted, “With 99% of users being genuine, blunt controls hurt growth. Platforms need continuous, device- and network-level intelligence to act on the risky 1% without disrupting the rest.”

What does this mean for the future of e-commerce security?

The findings suggest that fraud in e-commerce is no longer opportunistic but organised and scalable. Companies like Bureau are now using device and network intelligence across nearly 300 million devices to detect these patterns early.

As India’s digital economy expands, the battle between platform growth and fraud prevention is likely to intensify, requiring smarter, more adaptive security systems rather than blunt restrictions.

(With inputs from ANI)