Beware of BPO (Business Process Outsourcing) Fraud.
This article is to warn all small & medium scale entrepreneurs and individuals who have ventured into BPO business about certain fraud companies involved in this business and the way they are cheating the public.
Here I explain in general about these fraud companies duping public and eloping with heaps of funds.
In several of the cases that I studied, the entrepreneurs and individuals were cheated with huge sums of money by so called BPO agents.
In one of the cases that I studied, it happened like this.
This was a startup company setup to take up the world of BPO business. The company was largely setup through loans. The marketing manager of the company was aggressively looking for lucrative business offers. In the process, he stumbled upon a local guy who introduced himself as a BPO agent. The agent explained to him about his business contact with BPO companies.
He showed several documents and reports about many other companies working BPO projects through him.
This guy was summoned for a meeting with the company management and he could mesmerize them to such an extent that the company signed business contract the very next day.
The contract was something related to conversion of contents from scanned pages of books to Adobe PDF files.
That is, the contractor would provide scanned image data from books on a CD and the company had to convert them the specified formatted documents with certain quality conditions.
The first agreement of the contract was between the agent and the company where the company was supposed to pay some agreed upfront money to the agent as commission. Once this commission was paid, the agent would provide a sample project to the company, which would take 10-15 days to complete for which there would be no payment.
This was called pilot project to assess the ability and quality of the company. If the pilot project were satisfactory, then the actual project would come to the company through the agent.
There were several terms and conditions guiding the project the main three terms, which pivoted the fraud were be as below.
1. There would be a time bound for each project module and the project would stand cancelled if the company fails to give the output within the stipulated period.
2. There would be several quality parameters, some of which were very vaguely explained. Each module had to comply with these quality parameters. If it failed, the company had to re-do the whole thing. Else the project would stand cancelled.
3. The money would be released to the company on the approval of the project output as per the quality terms, which would be at the sole description of the contractor company.
The company started with the pilot project and it took two months to complete the same. To get the pilot project done, the company employed 30-40 workers.
At the end of the pilot project, the agent handed over a CD containing the actual project.
The company started to work on the actual project, and was able to complete the same in the stipulated time. They handed over the output on a CD to the agent.
After some time the agent came back to the company with several complaints about the bugs in the output and that it needs to be corrected.
The company again looked into the detail of the project and made modifications. They re-submitted the output to the agent.
After some time the agent again returned with several complaints that the output was not complying with the quality parameters.
This went on for 5 to 6 times. By then it was 8-9 months from the start of the actual project.
This time the agent replied to the company that the project stands cancelled, as it was not completed in the specified time frame.
The company went on with negotiations with the agent for several days, which were not fruitful and finally warned him about legal action. The company set the agent a deadline to solve the crises and release their funds.
After some time they came to know that the agent was playing the same game with several companies in the city and elsewhere.
When they were thinking about the way to tackle this agent legally, he vanished from the city and is still absconding. He eloped with more than 10 million rupees.
Most of the companies working on projects from him were shut down with heavy losses. People lost jobs.
All drama is being investigated.
Almost identical fraud is happening in cities all across India.
Now I am studying another case involving an international racket. I will publish the same in couple of weeks.
I warn again to all those companies who get carried away with lucrative BPO business offers.
Never ever pay upfront money to any agent.
They even try to lure you saying that would give you bank guarantee. Investigate the background to the core before signing any agreement.
Article by Laxmanmurthy Ganesh.
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