UPI Fraud: Types of Scams and How to Stay Safe
UPI fraud is defined as any fraudulent activity that occurs in the context of UPI-based digital transactions.
In the digital age, instant payment offers a secure, faster, convenient, and efficient way to transfer money. Developed by the National Payments Corporation of India (NPCI), the Unified Payment Interface, or UPI, is an instant payment system that facilitates real-time money transfers between two parties. With the widespread adoption of instant payment options, there has also been an increase in Unified Payments Interface (UPI)-related frauds and scams. Let us look at some of the common UPI-related frauds and how to prevent them.
What is UPI fraud?
UPI fraud is defined as any fraudulent activity that occurs in the context of UPI-based digital transactions. It is a popular payment system that enables customers to transfer payments quickly via a mobile device. Though UPI has made transactions faster and easier, it has also increased users' vulnerability to fraud and scams.
Types of UPI fraud
Phishing: Here, unsanctioned payment links that seem very similar to the merchant's original URL are provided to the victim. When users click the link, they are directed to the UPI app, where auto-debit happens, causing victims to lose their money.
SIM cloning: In this process, fraudsters create a duplicate SIM card of the victim’s mobile number and then use it to access their UPI account and transfer funds.
Money mule: It is a type of scam where scammers use unsuspecting users as intermediaries to transfer funds. In exchange for using their UPI account to receive or transfer funds, they provide the user a commission or other incentives.
Vishing: In this type of UPI scam, fraudsters trick users into revealing sensitive information. To gain the user's trust, they pose as bank officials or representatives.
Screen monitoring apps: Here, scammers posing as bank employees or customer care ask the victim to download third-party apps to address their grievance. This gives them complete access to the victim’s phone, where they can carry out illegal financial transactions.
OTP and PIN fraud: These are common techniques to scam individuals using digital payment networks such as UPI, credit cards and e-wallets. People unintentionally disclose their UPI PINS or OTPS to scammers, who subsequently get unauthorised access to the victim's account.
How to prevent UPI fraud?
The first and most important thing is to secure your UPI PIN and never share it with strangers.
Verify the receiver’s details and payment amount before making any payment.
Do not click links from unknown sources or respond to suspicious messages, especially if they request your personal information or UPI PIN.
Use a reliable mobile banking app with strong security features and always download it from the official app store.
Make sure to check your transaction history on your banking app.
