E-commerce platform Paytm Mall has engaged consulting and audit major EY to investigate a cashback fraud involving some of its employees and merchants, according to people familiar with the matter. Some employees of the Alibaba Group Holding Ltd.-backed company allegedly worked with third-party vendors and created fake orders to siphon off cashback offers.
According to people close to the development, the investigation has been going on for almost a fortnight and some Paytm Mall employees have also been fired.
EY will "undertake frequent audits to identify, analyse and monitor various in-built and outsourced processes,” said Paytm Mall in response to an email requesting comment on the development. The audit firm will also recommend Paytm Mall global practices that will be applied to build a tech-driven fraud prevention system.
Admitting that its current structure could leave "a scope for collusion", the statement said the EY partnership will undertake audit and fraud prevention using both human and artificial intelligence.
"This will strengthen the company's mission to build a secure and trusted shopping experience for the buyers and partnered sellers across India and soon to be launched global operations," the statement read.
Paytm Mall said it continues to "de-list fraud merchants and take strict action wherever needed".
Paytm Mall's senior vice president Srinivas Mothey said the company's teams continue to work closely with EY to share learnings and insights. "We are committed to build a trusted commerce platform and will take strict action against wherever needed," he added.
Paytm Mall has been offering aggressive cashbacks to woo customers to its platform from larger rivals Walmart Inc.-owned Flipkart and Amazon India.
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