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article image'World's cheapest smartphone' maker arrested on fraud charges

By James Walker     Feb 24, 2017 in Technology
The owner of Indian smartphone company Ringing Bells has been arrested on allegations of fraud and making death threats against customers. Ringing Bells made the headlines last year with its promise of a $4 smartphone to ignite India's mobile revolution.
When the Ringing Bells Freedom 251 was announced, the company's website was forced offline by the volume of pre-order requests. The 4-inch device features a 960x540 display, a 1.3GHz quad-core processor, 1GB of RAM and 3G, Wi-Fi and Bluetooth connectivity.
Ringing Bells' owner, Mohit Goel, has now been arrested by Indian investigators after being accused of defrauding one of its major customers. Distributor Ayam Enterprises has claimed it paid 3m rupees, around $45,000, for a batch of devices to resell. It received around 1.4m rupees-worth of phones. According to a police statement, "similar" complaints have been filed against Ringing Bells across the region.
"A number of similar complaints have been filed against him from other parts of the state," police spokesman Rahul Srivastava said to the BBC. "We want to investigate these claims thoroughly. It's important for us to expose these scams because innocent people end up losing their hard-earned money."
The Freedom 251 has raised questions from the very start. After its announcement, industry analysts questioned how Ringing Bells could sell the phone so cheaply. While decidedly low-end and supported by the government's Make in India scheme, the cost of the hardware still appears to be higher than the money being made. It's now being suggested that the phone was conceived as a scam and is based on a business model comparable to a Ponzi scheme.
Ringing Bells will launch the $7 Freedom 251 in India on 17/02/2016
Ringing Bells will launch the $7 Freedom 251 in India on 17/02/2016
Ringing Bells
When the Freedom 251 went on sale a year ago, Ringing Bells came under fire for apparently rebadging imported devices from another manufacturer. The phones that were shipped to customers were visually very different to the models shown on the company's website. In an investigation into its review unit, newspaper The Hindustan Times discovered the phone displayed the logo of New Delhi-based IT firm Adcom. It had been covered over by a layer of whitener.
Forced to admit the Freedom 251 was actually an illegally resold Adcom Ikon 4, Ringing Bells began accepting refunds on sold devices and eventually relaunched the phone last June. At the time, Goel said he felt "vindicated" and reassured customers that the company had "learned from our mistakes."
With Ringing Bells now once again surrounded by serious allegations, the Freedom 251's future is uncertain. Originally a device to bring the internet to millions of new users, it's now far from the Indian success story it could have been. Aside from the fraud allegations, Goel is said to have sent death threats to distributors who "kept asking" for their money back. He will make an appearance in court today.
More about ringing bells, freedom 251, Smartphones, Mobile, Fraud
 
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