‘Free money’ scheme fraud hits Indians in US

A new ‘free money’ scam is targeting NRIs in the US, who send money to India before falsely reporting transfers as unauthorised to claim bank refunds. Indian recipients risk fraud charges, frozen accounts and legal action, while US offenders face severe penalties

Hyderabad: Send money from the US to India and later claim it as an unauthorised transaction to get a refund from the US banks. This is a new ‘free money’ fraud that has now emerged in the US.

Some organisers in community WhatsApp groups are recruiting NRIs in the US for a ‘free money’ scheme, asking them to send money back home in India. Initially, the sender approves the transfer and money gets credited in the receiver accounts.

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However, weeks later, the sender raises the issue with their respective bank, claiming that the transaction has not been authorised. Going by the claim, the bank refunds the dollars to the sender, but the money sent via such transaction stays in the receiver’s account in India. For this, the organisers are allegedly taking a cut of 30 percent from senders.

According to NRIs, given the uncertain visa and savings running low, some Indians under the age of 30 years in Virginia and Texas, and recently lost their jobs are falling prey to the ‘free money’ scam. These individuals are allegedly trying to maximise every dollar before heading home, believing the trail will not follow them across the border.

However, US bank-fraud charges can be brought years later, and the money trail could end in India. This fraud attracts a punishment of up to 30 years in prison and a $1 million fine in the US.

As money is credited into parents, relatives or friends accounts in India, they can be booked for cheating under Section 318(4) of the BNS, a non-bailable offence. Such accounts can be traced and frozen.

Parents, relatives and friends have been advised not to accept money that they cannot explain. They have also been advised to report such offers to their bank and the national cybercrime helpline 1930 or www.cybercrime.gov.in.

“Many parents don’t realise their child’s ‘easy money’ is passing through their own bank account. Every digital transfer leaves a trail. One false signature can cost a young professional their visa, job and future in the US. And a few people chasing quick money could bring stricter banking rules for thousands of honest families who send money home,” said Nagarjuna Malempati, Founder and CEO of Xpat Money, a Seattle-headquartered fintech serving over one lakh NRIs.