Why fraudsters get away with IT job rackets

In recent months, a substantial number of cases have been reported where placement consultants have fooled gullible youngsters.

In recent months, a substantial number of cases have been reported where placement consultants have fooled gullible youngsters.  


PUBLIC EYEThey dupe youngsters with jobs in firms set up by fly-by-night operators

Log on to the jobs/recruitment section of any of the classified websites, and you're zapped with curious promises: “backdoor openings” to large MNCs, core technology training-cum-job, “hi-tech job” for the inexperienced, pay packets to match. And then there’s the usual catch — the “commitment amount”, “training fee”, consultant fees or a non-refundable “security deposit” — all stated upfront on the unofficial rate card in this frenetic recruitment bazaar.

Download the PDF of >'Job frauds in tech sector on the rise' here

Indeed, the term “job market” is very apt, for the jobs are obviously “fixed” by placement consultants, for a hefty price, of course: this price varies from just under a lakh to up to Rs. 3 lakh. It works on a simple principle: the lesser your marks or the less impressive your resume, the more you shell out. Similar “fixing”, multiple sources told The Hindu, happens for college placements in less-known institutes, where the process is more covertly managed.

But even as industry freshers or job aspirants have come to terms with the way this bazaar operates — after all, it is just an extension of the college admission tout racket — an intricate web of greed, deceit and fraud operates in the foreground, eager to cash in on the desperation of young jobseekers in a market, which is stagnant at best and in many cases even on a decline.

In recent months, a substantial number of cases have been reported where placement consultants have fooled gullible youngsters (mostly freshers) by landing them jobs that even pay salaries for a month or two. Often in cahoots with these consultants, fly-by-night operators hire in batches to build credibility, even offer rudimentary training in basic computer skills and some certifications. To appear well-established these companies rent out a modest office, put up a website and deck it up to make the company appear like an old market player. In one case in Bangalore, the company chose the name of an Italian company Electrosys, pretending to be an old and established subsidiary of the firm. The first batch is recruited through walk-ins, but successive batches are all “paid jobs”. And then when their numbers reach critical mass – typically between 100 and 200 employees – these companies vamoose with all the “security deposits”.


A simple web search throws up a farrago of such cases. Many of the victims, when contacted, were reluctant to go public. A substantial number had not registered a police complaint, an indication that such cases are underreported. Some insisted that IT companies tend to “track resumes”, and a complaint may end up tarnishing their record. These fears are baseless, it turns out, as industry sources say, there is no collated registry or tracking. However, they concede that there indeed are “backdoor entries” into the biggest companies, largely orchestrated by unscrupulous human resources (HR) personnel.


Besides job portals and placement consultants, large numbers of IT recruitments are through referrals, paving the way for arbitrariness and, consequently, fraud. Jagdeesh (name changed) lodged a police complaint when in June last year his company in Jeevan Bima Nagar shut shop overnight, leaving him and around 140 others in the lurch. Till date, none have got their money back, and the case remains unresolved. Today, he has a job, but is saddled with two large loans: one which he took for his engineering course, and the other which his mother took (by mortgaging her jewellery) to pay his way through to his first job.

“The warning signs are there,” explains Pradeep, “but in our desperation we tend not to see them.” A placement executive strung him along with an offer he couldn’t refuse, even staging a fake meeting and exchanging emails from what appeared to be the ID of a large MNC. Having paid the money, Pradeep was repeatedly stonewalled by being told that the joining dates were extended owing to financial losses. Worse, Pradeep had been put in touch with the consultant through a placement officer in his college, a tier-III institute in Andhra Pradesh. In a similar racket busted by the Bangalore police last year, the consultant even gave candidates a whirlwind tour of Wipro’s premises.

A 2011 report by Ernst and Young report titled ' Ever increasing fraud risks in the IT and ITeS sector' takes note of this trend. It points out that an entire entire recruitment team at the Indian subsidiary of a large IT company was sacked for allegedly accepting bribes from prospective employees and recruitment consultants. Saket Bhartia, president of the Bangalore chapter of the Association of Certified Fraud examiners says that from an IT/ITeS perspective, recruitment would be the top-most frauds reported today. This has to do with the rapid growth this sector has seen.

These frauds he says are carried out in collusion between HR officials in big companies, placement consultancies and training institutes. In some cases he adds they have found that HR officials in big IT companies have their family members running training and certification institutes that promise placements into the same company. This kind of fixing also happens in campuses, he adds.

A senior professor at a leading engineering college here said that another factor contributing to this malaise is the fact that most engineering colleges are not imparting adequate training to students, leaving them "hugely unprepared" for the industry. Often, these students have no option but to turn to training-cum-placements institutes in order to make inroads into the industry. "It isn't just about soft skills. Most students passing out lack in basic technical skills, so they cannot make it," he says. The unregulated and rapid proliferation of engineering colleges has meant that students are entering a market that is extremely competitive. "And everyone wants an IT job; partly because there are very little jobs in other trades. So they turn to these agents for help," explains the professor. This makes the entire ecosystem ripe for fraud.

Andhra initiative

A substantial number of these fraudsters have been traced to smaller towns in Andhra Pradesh. Following a slew of cases in Andhra Pradesh, the government there appointed a committee, along with industry associations, to study and suggest ways to protect job aspirants. Sources in the Bangalore police concede that IT-related recruitment frauds have seen a “steady, not yet alarming” rise. The numbers they say are underreported as most of them are reluctant to report the crime. Yet, both the Karnataka government and the industry are sitting on their hands.

Unaware of rights

Suresh Kodoor, a member of the IT and ITeS Employees Centre, a support organisation for employees in the technology and tech services sector, says that victims are unaware of their rights and scared to report when defrauded. “This is encouraged by the absence of appropriate laws, loopholes in existing rules, blanket exemption from labour laws, and a lenient attitude by law enforcing authorities,” he says.

The IT industry in Bangalore, and elsewhere, is unorganised and largely unregulated. Further, employees have no safety net as companies have been exempt from crucial labour laws, such as the Industrial Employment Standing Orders Act. This means that there is no proper inventory of these companies, and they are not required to make any disclosures, making it difficult to track these operators. In one of the fraud cases, it appeared that the company was not even registered.

Officials in the State Labour Department say they hope that the move to revoke the exemptions given to the IT sector will bring in more accountability as any workplace employing over 50 will be required to register with the department, and make their rules of service amply clear. This will also increase awareness about employee-employer rights and entitlements, they believe.

Why you should pay for quality journalism - Click to know more

Recommended for you
This article is closed for comments.
Please Email the Editor

Printable version | Dec 11, 2019 7:05:08 PM |

Next Story