How to Protect Yourself from UPI Fraud in India
Rohini Anil Patil
November 22, 2023
Digital transactions have surged in India, leading to a concerning rise in UPI frauds. The finance ministry reported over 95,000 cases of UPI fraud in the 2022-23 financial year. Recognizing the various forms of UPI payment fraud can help you safeguard your finances. Fraudsters often resort to tactics like UPI ID fraud, where they create fake IDs to mislead users. To protect yourself, change your UPI PIN regularly and remain informed about prevalent scams. Keep in mind that UPI scams exploit fear, greed, and emotions. Stay vigilant and educate yourself to avoid becoming a victim of UPI fraud.
What is UPI Fraud?
UPI fraud refers to fraudulent activities and scams that occur within the Unified Payments Interface (UPI) system in India. Fraudsters use various tactics to deceive individuals and exploit vulnerabilities in the UPI ecosystem. They often trick victims into revealing their UPI PIN or personal information, enabling them to access their bank accounts and carry out unauthorized transactions.
UPI fraud is a growing concern in India, as the use of digital payments has surged in recent years. In 2022-2023, there were over 95,000 cases of UPI fraud reported to the finance ministry.
Types of UPI frauds / online frauds
UPI frauds, also known as online frauds, are becoming increasingly common in India due to the rise of digital transactions. Fraudsters use various tactics to deceive individuals and exploit vulnerabilities in the UPI ecosystem and other online platforms. Being aware of these frauds and taking precautionary measures can help you stay safe while conducting digital transactions.
Phishing
Phishing is one of the most common types of UPI transaction frauds. Fraudsters send fake emails or text messages that appear to be from legitimate sources, such as banks or government agencies. These messages often contain links that, when clicked, take the victim to a fake website that looks like the real website. The victim is then prompted to enter their UPI PIN or other personal information.
Fraud Sellers
Fraudulent sellers are prevalent in online marketplaces. These fraudsters deceive unsuspecting buyers by selling counterfeit products or getting the order processed but not delivering the product. This leads to financial losses and a breach of trust in the e-commerce website.
Fraud Through Screen Monitoring Apps
People with malicious intent can exploit screen monitoring apps to compromise your privacy and security. These apps allow fraudsters to capture sensitive information like UPI PINs, OTPs, and other personal details by recording your screen activities without your knowledge. This allows them to gain access to your banking information and conduct fraudulent activities.
Malware
Malware is one of the most common forms of UPI fraud. It can be mistakenly downloaded from a fake email attachment or an unsecured website. Malware is designed to extract and copy data from the infected device.
Money Mule
Money mule is a more elaborate fraud. Once your financial data is obtained, fraud rings transfer money to an intermediary account to house the loot. This account acts as one of the money mules to park money collected from different unsuspecting victims. This type of fraud is also common in UPI hacking.
SIM Cloning
SIM cloning is a recent addition that has mushroomed after the OTP-mandatory rule by banks. If a fraudster clones your SIM, they can get the OTP on their device and then even change your UPI PIN. The fraudster gets hold of your bank account details and ID proof to reset the PIN. Within a minute, you will become a victim of UPI fraud.
Deceiving UPI Handles
Fraudsters often create deceptive UPI handles to trick unsuspecting users. These scams can occur on various platforms, such as social media, online marketplaces, or through unsolicited messages. Fraudsters may use enticing offers or urgent requests for payment to deceive you into making transactions to their fraudulent UPI handles.
Vishing
Vishing refers to fraudsters posing as bank representatives, asking questions on behalf of the bank. These individuals weave a web of lies and enquire about your personal information to extract your PIN or password.
Collect Request
A common type of UPI fraud is when fraudsters may request a collect payment from you using your UPI apps. They can even ask for debit reversal or other refund-related activities. They may pose as a legitimate entity or claim to be assisting you with a transaction issue. In reality, they are attempting to deceive you into providing sensitive information or initiating fraudulent transactions to their accounts.
By being aware of these types of frauds and taking precautionary measures, you can help protect yourself from UPI fraud and stay safe while conducting digital transactions.
How Do Hackers Execute UPI Fraud?
Fraudsters follow a pattern when executing their elaborate UPI scams. Here's a step-by-step breakdown of how these scams typically unfold:
Step 1: The Initial Contact
The scam begins with a phone call from the fraudster. They often pose as a bank representative and call unsuspecting victims claiming to address a seemingly harmless issue.
Step 2: Establishing Credibility
To make the call sound legitimate, the fraudster asks verification questions like your date of birth, name, or mobile number. This helps establish credibility and gain the victim's trust.
Step 3: Fabricating a Problem
The fraudster then introduces a fictitious problem with the UPI app or website, using technical jargon to make it sound convincing. They may even concoct a story that involves urgent action to resolve the issue.
Step 4: Encouraging App Installation
The fraudster persuades the victim to download a remote access application like AnyDesk or ScreenShare, claiming it's necessary to troubleshoot the technical issue.
Step 5: Seeking Permissions
While downloading the app, the fraudster emphasizes granting it all necessary permissions, assuring the victim it's crucial for the troubleshooting process.
Step 6: Intercepting OTP
Once the app is installed, the fraudster asks the victim to share the 9-digit OTP received on their phone. This OTP is essential for authorizing transactions in the UPI app.
Step 7: Taking Control
With the OTP and permissions granted, the fraudster gains complete control of the victim's phone, allowing them to steal passwords and initiate fraudulent transactions through the UPI app.
A Guide to UPI Fraud Prevention
Scams are not inevitable; they can be avoided by taking some essential precautions. These tips are not just to keep you away from fraud; they are also fundamental things to keep in mind to keep your information safe in the Internet era.
Beware of engaging with fraudsters
Avoiding engaging with UPI fraud is the best way to protect yourself from fraudsters. Your bank will never call to discuss your sensitive information. If you receive any call asking you to do the same, that's a red flag right there.
You can check for the authenticity of unknown numbers via apps like Truecaller, which has a global database of numbers flagged by users.
Take extra precaution while requesting/accepting requests
Fraudsters take advantage of the "request money" feature on apps like Google Pay, PhonePe, BHIM, etc. Imposters express interest in buying a product advertised on various online platforms and engage with the seller on a phone call. They make the seller of the product transfer the money using the UPI app's "request money" option. So, a careless click can sometimes cost you thousands via UPI fraud. Remember, receiving money requires no PIN.
Pay attention to SPAM warnings on your UPI app
UPI apps like Google Pay and PhonePe generally present a spam warning if you receive a request from an unknown account. So, keep an eye out for such warnings. If you spot any suspicious accounts, report them as spam.
Be wary of malicious apps
UPI frauds also occur using fake mobile apps to cheat people. Scammers create an app similar to the original bank app and submit it to the Google Play Store.
When a customer accidentally downloads and installs the fake app on their mobile phone and gives necessary permissions, the app sends out sensitive data to enable fraudsters to withdraw money from the victim's account.
Several fake apps like Modi BHIM, BHIM Modi App, BHIM Payment-UPI Guide, BHIM Banking Guide, Modi ka Bhim, etc., have been reported to have stolen customers' data in the name of providing valuable banking services.
Follow security practices to avoid UPI fraud
Make sure that you don't reveal your PIN to strangers under any circumstances. Also, make sure to protect your UPI apps with biometric recognition software. This way, hackers cannot misuse your account. You should also install anti-virus software to regularly check for malicious software.
Never open emails without checking their authenticity to avoid UPI hacking
Emails are one of the easiest ways to trick you into downloading malware and obtaining your information. Always scan your emails for viruses/malware to avoid UPI fraud.
Keep a check of your account every once in a while
Once in a few months, sift through your account activity to check for any suspicious behavior on your account. We often forget to keep track of this and may miss a few red flags along the way. It's always best to check your accounts thoroughly once in a few months. If you notice any unusual pattern or are prone to UPI fraud, make sure to alert the bank right away.
Avoid using open Wi-Fi
Using open/public Wi-Fi for banking or UPI apps is never a good idea as it may give hackers a chance to access everything on your device. Instead, always check if the Wi-Fi is trustworthy before connecting to it.
Keep track of all your bank messages to avoid UPI fraud
Take a close look when you receive messages from your bank. Know the difference between a password, PIN, and an OTP, and carefully examine the message for inconsistencies or disputes to stay safe. Keep track of all your bank messages to ensure you're aware of all the transactions made via your UPI ID.
While no application is entirely foolproof, the only way to stay safe is to be wary of fraudsters who can go to any level to fool you. Contact your bank if you think something's wrong.
By following these simple precautions, you can significantly reduce your risk of falling victim to UPI fraud and protect your hard-earned money.
Basic Do's and Don'ts To Avoid Subspace Fraud Cases
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Don'ts
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By following these simple do's and don'ts, you can significantly reduce your risk of falling victim to subspace fraud and protect your hard-earned money.
Conclusion
As the country embraces the digital era and moves towards a cashless economy, the rise of subspace transactions brings with it an increased risk of fraud and scams. Subspace fraudsters employ various tactics such as phishing, malware, money mule schemes, SIM cloning, and vishing to exploit unsuspecting individuals. However, by staying vigilant and implementing preventive measures, you can protect yourself from falling victim to subspace fraud.
Remember to be cautious of unknown numbers and avoid engaging with fraudsters. Take extra care when requesting or accepting money through subspace apps and pay attention to spam warnings. Be wary of downloading malicious apps and always prioritize security practices such as safeguarding your PIN, utilizing biometric recognition, and installing anti-virus software.
Regularly monitor your account activity and remain alert for any suspicious behavior. Avoid connecting to open Wi-Fi networks and carefully scrutinize bank messages for any inconsistencies.
