How do fraudsters scam people using UPI?

4 min read
September 27, 2019

Mobile wallet apps like PayTM, Google Pay, PhonePe, BHIM, etc offer instant money transfer services via UPI. Fraudsters try to dupe innocent users by exploiting the features of a UPI transfer. A user simply has to enter a 6-digit UPI pin to transfer money. If this PIN falls in the hands of the wrong person, one may end up losing thousands within a matter of minutes.

Scamming users is also known as ‘vishing’. Fraudsters seek personal information of the user by employing the methods given below. Every UPI scam revolves around the sharing of private information. PIN, OTP, Card expiry date, CVV etc. are some details which you should never share with anyone.

You can save your money by being aware. Check out the methods used by swindlers to defraud people.

If you lost your money in a UPI fraud, click here to know where to complain.

Read on to find out the 8 tactics fraudsters use to commit UPI scams in India.

Request money UPI fraud

The ‘request money’ option in UPI is the most exploited feature. Through this, you can submit a request to receive money. The receiver will accept your request after entering the UPI PIN.

Fraudsters use this tactic by sending a request to the victim to send money. The fraudsters pre-enters the required amount. The transaction is authorised as soon as the victim enters the PIN.

If the receiver ‘declines’ the request, the transaction will be cancelled.

Cashback Offers

Fraudsters pose as representatives of companies like Snapdeal, Flipkart, Myntra etc. They congratulate the victim and offer cashback to UPI users. The victim is asked to enter a ‘code’ to accept the cashback. The ‘code’ is indeed the UPI PIN and the victim ends up losing the money which they thought they were going to receive.

Fraudsters also say that you have won money in a contest- or that you can buy anything for free within the next few minutes. People usually fall for such scams. This is also known as smishing.

Fake customer care number

With social media becoming the latest platform to file complaints, fraudsters make fake social media handles and circulate fake customer care numbers. They even set up fake websites advertising false customer care details. When an aggrieved customer calls such a number to file a complaint, fraudster pretends to be a customer care executive and extracts the sensitive information from them.

Again, they will offer a ‘refund’ by asking the victim to accept the ‘request money’ notification on the UPI app. Instead of giving a refund, the fraudster withdraws the same amount from the UPI account of the victim.

As a safety measure, you should only trust those helpline numbers which are posted on the official website of a company.

Fake customer care email ID

Just how fraudsters circulate fake customer care numbers, fake email IDs are shown as official contact point to a company. Once a victim falls prey to this, they are asked to share bank account details, including sensitive information.

Must Read: Know your rights as a UPI user

Seller fraud

Fraudsters set up fake websites and pose as sellers. Visitors are offered products on the website but everything is fake. Payment gateways shown on the website are supposed to perform background checks on seller before tying up. Fraudsters submit fake details and if the payment gateway doesn’t perform a thorough check, a legit gateway is set up. They usually reach out to the website’s customer support team and realise that a fraud merchant has taken away their money.

Buyer fraud

Usually, fraudsters pose as interested buyers and respond to sale listings on websites like OLX. They build trust and will sound genuine- once the seller is convinced, the fraudster will ask you to accept the request money notification. They’ll pose as though they’re paying you but in reality, they’ll ask you to enter your PIN to steal your money. This is also known as ‘collect-call request’.

Emergency phone call

A fake phone call or message, where a fraudster poses as a relative or friend in distress, and request money on UPI app. They will make the situation sound like an emergency and rob you of off your money. You should never transfer funds without verifying the person’s identity- regardless of the urgency of the situation.

Identity Theft

Identity theft is the oldest form of financial frauds. Fraudsters procure your sensitive or personal information and obtain a loan in your name. Once they have acquired the money, they will vanish into thin air leaving you accountable for repayment of the loan.

Money Mule

This is a more serious form of financial fraud. Money Mule takes place when a victim is scammed into money laundering. Black money, stolen or illegal, is deposited in the victim’s account. Fraudsters offer commission in exchange for depositing money in your account. They use the victim as an intermediary before finally depositing the money in the fraudster’s account. The victim ends up getting entrapped in an illegal racquet.

The best way to stay safe from UPI fraud is to be aware and never share sensitive information with anyone, no matter what!

If you have a UPI complaint, start your case below-

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