In May, Paytm dragged TRAI and Telecom companies to the court for not blocking the flow of unsolicited traffic over their networks and sought damages of Rs 100 crores. Recently, various other e-payment majors in India like PhonePe, Mobikwik, Infibeam Avenues, among others, have joined Paytm in criticising the telecom regulator and operators, including Reliance Jio, Vodafone Idea (Vi) and Bharti Airtel, for failing to provide adequate safeguards in curbing financial frauds where customers are being targeted through calls and SMS. The number of financial frauds have risen over the years where the instances of such frauds on e-payment platforms have become a common.

In this case against the digital platforms, the telecom operators and regulators are being represented by IAMAI. Internet & Mobile Association of India (IAMAI) is a not-for-profit industry body registered under the Societies Act, 1896. Its mandate is to expand and enhance the online and mobile value added services sectors.IAMAI shared numerous instances where payment companies and its customers suffered due to alleged negligence by telcos. It has blamed the Telecom Regulatory Authority of India (TRAI) for not heeding to companies' complaints of fraudsters duping users via fake SMS headers and phishing calls.

In an application submitted on September 18, 2020 in the ongoing lawsuit between Trai and Paytm's parent One97 Communications in the Delhi High Court, IAMAI said that these companies have suffered “considerable damage” to their brand reputations and public trust, due to lax implementation of regulations by telecom industry participants. The intervention comes days after Paytm CEO Vijay Shekhar Sharma accused industry bodies including IAMAI and NASSCOM of being “silent” against alleged arm twisting of Indian startups by American technology companies.

In separate responses, Jio, Airtel and Vi have said that service providers cannot, legally, access or control the content of communications sent over their networks and judge whether it is fraud. They also said that Paytm is trying to shift the blame of its own lapses to evade legal liability of financial frauds occurring through its app.
Meanwhile payments industry executives told ET that the matter is a serious one for the entire ecosystem, and not just for Paytm, as increased instances of frauds is causing reputational risks.The present support of other digital payment platforms shows the difficulties being faced by digital payment platforms as being the competitors they have backed Paytm in this legal dispute. Cyber laws in India are at a preliminary stage and it is the need of the hour that constructive measures are taken to prevent cyber frauds and to ensure that there is a particular body which should be help accountable.

The hearing of this case is next scheduled for 25 November, 2020.

This news has been reported by Ms. Roshni Kapur & reviewed by Ms. Samreen Ahmed, Research Assistant, Research & Innovation Department, MyLawman.