December 26, 2024 · 12 mins read
Santosh Kumar
As much convenience digitisation of banking and transactions has brought into many people's lives, certain aspects must be considered when it comes to UPI transactions. With the advancement of technology, there has also been an increase in cybercrime and fraud that seriously jeopardises the digital banking sector.
Unfortunately, UPI frauds have become quite a menace in India. Fraudsters and scammers try to exploit users' lack of information and awareness. Although UPI is backed by NPCI and the Government of India and has very strict security measures in place to ensure maximum and optimum security and safety, sometimes, due to negligence and lack of awareness, people become victims of cybercrime and fraud. Through this article, we will shed light on the most common types of UPI fraud and learn how to avoid them as well.
It is common for us to hear about the UPI frauds and scams in India. This is because, with the internet, fraudsters have become more flexible and daring. This article aims to throw light on the various types of most commonly attempted frauds when it comes to UPI transactions in India. Read along so that you can avoid being tricked and keep your UPI safe and secure-
Phone call Scams from fake Customer Support- This type of fraud is one of the most common scams happening in India and is known as voice phishing. This involves scammers who call you on your cell phone or cell phone, posing as customer care representatives who will trick you into believing that you have problems with your bank account and ATM cards or offer you lucrative deals, awards, and prizes. Once they have your attention, they will try to gain access to the victim's details like UPI, UPI PIN, bank account details, etc. They may adopt many tactics like offering to resolve made-up issues, account errors, etc, to gain access to the victim's UPI account. They will then try to convince the victim to share their Passwords, IDS, OTPs, etc. so that they can help you resolve the fake issue that they have created.
How to avoid getting scammed during such calls- the first step to do if you receive such a call is to always verify and cross check the customer care number. You can always hang up and check for the authenticity of the customer care executive. You should not panic and divulge your details over the phone, no matter how big of an emergency it sounds and how convincing the caller is. Always be wary and remember that banks, UPI platforms and other businesses don't make personal calls out of the blue for an issue. DO NOT divulge your UPI ID, bank details, or UPI PIN to anyone else.
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Phishing Scams- Another very common type of UPI fraud that happens in India. In this type of fraud, the scammer pretends to be a representative of an entity like a bank, business, etc and tries to scam the user into sharing sensitive details like bank accounts, UPI IDs, UPI PIN, etc. This can be done either in the form of a text message or email. The message will contain a link which, once clicked on, will lead them to a page where they might be prompted to input their UPI PIN or an OTP. Once the user is tricked into clicking the link and submitting the details, the fraudster will gain access to the victim's account, and they will be able to tamper and transfer funds from that.
How to avoid phishing- Always be extra cautious while receiving messages and emails from new or unknown numbers and email IDs. Do not entertain messages and emails that ask you to divulge your banking details even if it is very convincing and is "supposedly" sent from your bank. Also, do not make the mistake of clicking on unverified links because your bank or any business will not ask you for details. Always block and report such numbers and accounts immediately to risk further damage.
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Fraud through fake applications and malware- A very technologically savvy form of fraud is through the use of applications and malware developed just for the purpose of doing fraud. Scammers will try to trick the victim into downloading and installing a fake application on various pretexts. Once installed, this app will either steal and compromise your sensitive data or replicate your phone to a remote cell phone, which will then control your cell phone activities. They can steal all information like PIN codes, UPI accounts, UPI PINs, bank account details, etc. This will then allow them to do transactions freely from your UPI account. These fake applications and malware can be introduced to your phone via various means like text message links, WhatsApp messages, emails etc. You must remember that even the pretext they use will be convincing and attractive, like offering rewards, prizes, discounts, etc.
How to avoid malware fraud: Never download unnecessary applications on your phone; only use verified UPI applications. Be cautious about random offers, too-good-to-be-true offers, and prizes, as they may be a front for fraud and scams. Don't trust new links and messages from new and unknown numbers.
SIM card Fraud- Another common type of UPI fraud prevalent in India is SIM card fraud. This happens when fraudsters illegally switch your cell phone number with a new SIM card so that they can gain access to your cell phone and control it through the switched phone number. This allows for remote control of your calls, messages, OTP, etc., which again are instrumental in authenticating a UPI transaction.
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The main modus operandi of such frauds is that the scammers pose as the victim and ask the cell phone service provider to provide a SIM card replacement. Once the SIM card is switched, the scammer has access to the cell phone and its activities. This will allow them to easily make transactions without having to scam the victim through phone or messages. How to avoid getting into such scams?- to ensure that you never become a victim of SIM-card swap fraud- make sure that your cell phone SIM card has a SIM card lock or PIN, which allows your service provider to only provide a replacement by authenticating through your password. Also, always be cautious about your personal details and information like Aadhar, Voter cards, etc., especially when getting photocopies or submitting them for different official purposes; make sure they are at no risk of being misused for such scams.
UPI QR Code scam- UPI fraud involving a UPI code or QR code happens when victims are tricked into transferring money using fake or tampered with codes. This typically happens when users pay using a scanner, thinking they are paying to a trusted account, but instead end up transferring money to a fraudulent account. This may happen when fraudsters replace the QR in shops and businesses with their own QR codes; this can also happen while paying through delivery executives, etc, while paying for Cash-on-delivery online orders as well.
If you are paying at a shop or business, always make sure to check the UPI ID and the linked name with the shopkeeper. If you are paying for your delivery, make sure that the instructions sent by the company and the Cash on delivery payment mode align. Always cross-check with the merchant or vendor before making payments.
Fraud through offers of prizes, loans, investments, and easy money- many fraudsters lure victims through the attraction of easy money. These types of fraud include trapping the victim through promises of easy money through attractive prizes, schemes, loan offers, etc. This typically involves tricking the victim and then asking them to pay an advance amount to claim the offer. After the victim has paid, the fraudster will either try to ask for more money until the victim runs out of money or realises their mistake by which time the money is already gone to the scammer.
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Never fall into the trap of easy and attractive offers that sound too good to be true. Always be wary of loan and investment offers from unsolicited companies and banks that approach you through unknown numbers. Always do thorough research before applying or consenting to loan and investment offers. Any type of financial offer and opportunity should always be researched thoroughly to be on the safer side.
Financial awareness is very important when it comes to safeguarding and protecting your personal finances. It is important to know the value of money and how to keep it safe and secure. Especially in this day and age when technology has made such huge advancements where it can bring you convenience but also many risks. Frauds and scams are a true threat to the legitimacy and efficiency of UPI transactions. These frauds and scams happen not because of improper security measures but generally due to a lack of awareness among users. Here are some things that every user will benefit from-
1: Always keep your UPI account details safe, and never divulge sensitive information to anyone else.
2: Protect your account with a very strong password and PIN that make it harder to crack.
3: Always opt for multiple-level authentication steps to ensure maximum security. Enabling multiple authentication factors will seal your account with additional security.
4: Maintain a habit of changing your passwords and PINs on a regular basis to avoid risks of exposure.
5: Always monitor your transactions and keep an eye on your bank statements periodically to identify unwanted and unauthorised transactions.
6: Keep your system and applications updated for the security measures introduced by the phone system software and your UPI applications. Always be abreast of the latest trends in scams and phishing to avoid such situations.
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Every user should advocate awareness about UPI fraud and information about how to avoid it because it is the need of the hour. With digitisation and the shift of banking and money transfers to the online world, frauds and scams have also become rampant, where people use users and their lack of knowledge to take money illegally. The most vulnerable group in this regard would be old people and technologically challenged people who do not have sound knowledge about the digital world and may be intimidated to ask or challenge the perpetrators in case they are being scammed. However, it is important for them to know their rights as a consumer and realise that asking for information and verifying the details is very important for the safety of their bank accounts.
Digital payments have genuinely changed the way people do day-to-day transactions. They are safe and secure on their own, but fraudulent tactics pose a significant threat to their usage. While making use of UPI-based transactions, always make sure to check the details and verify everything for your own safety. It is also important to follow all the protocols and practice safe and responsible digital banking practices. By being a responsible user, staying protected, and following the necessary precautions – you can certainly enjoy the benefits of UPI transactions without the fear of fraud and scams.
Is UPI a safe method of money transfer?
Yes, UPI is a safe method of transferring money since it uses encryption and ensures that all information and data are well protected.
What to do in case of fraud activity on UPI?
In case you identify any fraudulent activity on your UPI application or platform, the best course of action would be to inform three entities—your bank, the cyber-crime unit, and the UPI payment application where the fraudulent activity has happened—to ensure that you have the best damage control process to safeguard your account and get your money back.
What is the best way to avoid scam calls?
The best way to avoid scam calls is to not entertain unknown or suspicious calls and to block and report scam calls that you may have received.
Can someone else get hold of my UPI ID?
Yes, there are chances that your UPI ID is exposed to someone else. This can happen when you make new payments via UPI, send your UPI ID to someone, or share your QR or UPI code with other people.
Can a fraudster transfer money from my account just through my UPI ID?
A fraudster cannot transfer money from your account just through your UPI ID. They would need full access to your UPI application password and UPI PIN. They would also require you to authenticate the transaction if you have enabled two-factor authentication in your application.
Can I change my UPI ID if I have been scammed?
You can certainly opt for a new UPI ID if you have been a scam victim. You can create and set a new UPI ID along with new Passwords and PIN codes for your UPI application.
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