Mobile phone retailers call out rampant fraud, urge buyers to shun easy EMIs

New Delhi: Nowadays, you can purchase mobile phones without any down payment and pay in monthly installments (EMI). However, this convenience is being misused in a troubling new trend.

Retailers of mobile phones report that approximately 12% of purchases made on EMI are fraudulent. While operating this fraud, scammers target individuals with low income. These are people who are lethargic about their credit score due to loan defaults.

These individuals order phones but instead of keeping them, they sell them to fraudsters at a discounted rate. The fraudsters then resell these phones in the grey market. Customers who buy phones tell retailers that they didn’t receive the phone delivery. This way, they avoid making EMI repayments.

Financing schemes for expensive smartphones are among the most popular methods of purchase. In 2023, consumers bought one out of every three smartphones using monthly installment plans, according to Counterpoint Research.

People buying phones on EMI often do so unnecessarily, purely to obtain a loan which scammers exploit to fulfill their cash needs. For example, scammers misuse valid schemes like zero down payment on iPhones, targeting individuals seeking loans at lower interest rates.

Concerned retailers are now demanding a halt on these financing schemes, citing significant financial losses. They advocate for stringent measures such as open-box delivery, where delivery partners verify products in front of customers and collect documentary evidence through video recordings or biometric verification.

Phone retailers are calling for an end to financing schemes and incase of non-payment of EMIs, they have asked brands to lock devices through apps . This potentially impacts consumers who unknowingly purchase second-hand phones subjected to such fraudulent practices. Therefore, it’s crucial for consumers buying second-hand phones to thoroughly check their purchase papers to avoid potential issues.