FASTag Fraud: Gang Took Advantage of Loopholes in Axis Bank App to Siphon Rs20 Crore, says Report
Taking advantage of a loophole in the banking system, a gang had made 4,259 fraudulent FASTag recharge-refund claims and siphoned off Rs20 crore, says a report from Times of India.
While the report does not mention name of the bank, we learn it is Axis Bank which had filed the complaint with the cybercrime cell of Mumbai police.
As per the report, the Bank investigated the fraud internally, and found that unidentified persons had claimed huge refunds for FASTags. Some of the accounts that had claimed refunds were non-functioning or had zero balance.
Quoting a police officer, the newspaper says, "Further technical investigations found that the gang had taken advantage of a loophole in the system to claim 4,259 refunds, and had siphoned the money from the bank ledger account. Between January 2019 and January 2020, the gang made 4,259 recharge transactions on FASTags, and then claimed a refund by showing that the know-your-customer (KYC) submission was erroneous. They caused a wrongful loss of Rs19.8 crore."
Top lawyers with expertise in cybercrime, however, point out that the problem was with the Bank’s own systems and procedures.
We sent an email to Axis Bank and will updated this article as and when we receive a reply from them.
In the complaint, the Bank says it has launched e-wallet for customers to buy FASTags via the app. It also bought a software to handle all transactions on this system. Using the app, anyone can buy or recharge his/her FASTag through the unified payment interface (UPI).
FASTag is a device affixed on the windscreen of the vehicle, which uses radio frequency identification (RFID) technology and linked with a prepaid account. FASTag helps in making toll payments by driving through the toll plaza without stopping for cash transactions.
Axis Bank partnered with Indian Highways Management Co Ltd to launch an electronic toll collection (ETC) programme to provide all toll plazas across the country a dedicated lane for electronic toll collection. The ETC programme uses RFID tags for electronic toll collection.
For applying for FASTag, Axis Bank asks customers to submit registration certificate (RC) of the vehicle and KYC documents as per the category of the vehicle-owner.
After forensic investigation, the newspaper report says, the cybercrime police tracked the beneficiaries of the refunds to Chennai, Bengaluru, and other parts of Karnataka. Four were arrested from Karnataka, while police are looking for a few more people involved in the racket. The kingpin of the fraud is also absconding, it added.