UPI Fraud: Types and Prevention to Secure your Account

Read on to know what UPI transaction fraud is, its types and ways to prevent it. Buy the CPP Wallet Care plan and get financial assistance against UPI fraud.
UPI Fraud: Types and prevention to secure your account
3 Mins

Digitalisation in India has significantly simplified everyday life, but there have also been many cases of its misuse. The popularity of the online medium has increased in addition to the increasing number of online fraud. The risk of UPI fraud has also increased along with the use of UPI.

What is UPI fraud?

UPI (Unified Payments Interface) fraud refers to any type of fraudulent activity that takes place in the context of UPI-based digital transactions. UPI is a popular payment system that allows users to transfer funds instantly between bank accounts using a mobile device. While UPI has made transactions faster and more convenient, it has also made users more vulnerable to fraud and scams.

Types of UPI fraud

Here are some common types of UPI fraud:

● Phishing:

Phishing is when fraudsters send fake UPI links or ask for sensitive information such as UPI PINs, passwords, and OTPs through text messages, emails, or phone calls. Once they receive this information, they use it to transfer funds or make purchases without the user's consent.

● Malware

It is a software that can be used to steal a user's UPI login credentials, payment information, or other sensitive data.

● Money mule

In this type of UPI scam, fraudsters use unsuspecting users as intermediaries to transfer funds obtained through illegal means. They may promise the user a commission or other incentives in exchange for using their UPI account to receive or transfer funds.

● SIM cloning

SIM cloning is a process where fraudsters create a duplicate SIM card of a victim's mobile number. They can then use this SIM card to access the victim's UPI account and transfer funds without the victim's knowledge.

● Vishing

It is a type of UPI scam where fraudsters use voice calls to trick users into revealing sensitive information such as UPI PINs, passwords, and OTPs. They may pose as bank officials or representatives from UPI payment providers to gain the user's trust.

How do hackers execute UPI fraud?

Here’s how hackers execute UPI fraud:

  • It starts with a random call from a fraudster who pretends to be a bank representative to get the target's attention.
  • The fraudster asks verification questions like the target's name, date of birth, or mobile number to make the call sound legitimate.
  • The fraudster claims that there is a problem with the UPI app or website and uses technical difficulties to talk to the victim. They create false stories and convince the victim to share their personal information to resolve the issue.
  • The fraudster then asks the victim to download an application on their phone, such as AnyDesk or ScreenShare, available on the Google Play Store or App Store.
  • While downloading the application, it asks for the user's privacy permission, like any regular app. However, these apps can access everything on the phone.
  • The fraudster will then ask the victim for the OTP generated on their phone. As soon as the victim reveals the code, the hacker will also ask for permission from the phone.
  • When the app acquires all permissions required, the caller starts to take complete control of the victim's phone without their knowledge. After gaining full access to the phone, the hacker steals passwords and begins transacting with the victim's UPI account.

A guide to preventing UPI fraud

Here are some tips to prevent UPI fraud:

● Be cautious when interacting with fraudsters

Always be cautious of random calls or messages asking for personal information or directing you to download specific apps. Do not share your UPI PIN or other sensitive information with anyone, and immediately disconnect any calls or messages that seem suspicious.

● Be more careful when making or accepting requests

Be mindful while requesting or accepting money on UPI. Verify the payer's credentials and ensure the request is legitimate before accepting it. Similarly, while making a request, double-check the payee details before initiating the transaction.

● Pay attention to SPAM alerts on your UPI app:

Many UPI apps have built-in spam filters that warn you about suspicious requests. Pay attention to these warnings and avoid accepting requests from unknown or unverified sources.

● Be cautious of potentially harmful applications.

Do not download any apps from untrusted sources, and always read the app reviews before downloading from the app store. Always check the app permissions and avoid granting access to sensitive information like contacts, SMS, and microphone unless required.

● Follow security measures to avoid UPI fraud:

Set a strong UPI PIN and never share it with anyone. Use different passwords for different apps and change them regularly. Keep your phone locked and use a strong screen lock password. Do not use rooted devices or jailbroken phones for UPI transactions.

● Keep track of all your bank messages:

Keep track of all your UPI transactions and monitor your bank account regularly for any unauthorised transactions. Report any suspicious activity to your bank immediately.

With the increasing number of scams, securing yourself from UPI scams should be your major concern these days. You can protect yourself from UPI fraud and other cyber scams with the pocket insurance CPP assistance plans available at Bajaj Finance Insurance Mall.

Benefits of the CPP Wallet Care plan

  • Get coverage of up to Rs. 2 lakh for card fraud. This includes PIN-based fraud, losses due to phishing, and tele-phishing.
  • Quick debit and credit card blocking facility.
  • Get emergency travel and hotel assistance for domestic and international travel.
  • Covers the cost of PAN card replacement.

The Wallet Care plan takes care of your digital transactions and is available at a nominal fee of Rs. 699.

Frequently asked questions

Can money lost in UPI fraud be refunded?

Yes, money lost in UPI (Unified Payments Interface) fraud can be refunded by the respective bank, subject to certain conditions. The account holder should report the fraud to the bank within a specified time frame and provide necessary details. The bank carries out an investigation and refunds the amount if the fraud is proven.

Can UPI ID be hacked?

Yes, UPI (Unified Payments Interface) ID can be hacked through phishing or malware attacks if the user falls for these scams. Additionally, if the user shares their UPI credentials or device with others, their UPI ID can be compromised. It is important to keep UPI credentials secure and not share them with anyone.

Can a bank reverse a UPI transaction?

Yes, a bank can reverse a UPI (Unified Payments Interface) transaction under certain circumstances, such as if the transaction was done erroneously or was fraudulent. The account holder needs to report the issue to their bank and provide necessary details for the bank to carry out an investigation and process the reversal if required.

Are there any legal remedies available for victims of UPI fraud?

Yes, there are legal remedies available for victims of UPI (Unified Payments Interface) fraud. The victim can file a criminal complaint with the police, and the bank can also lodge a complaint with the cyber cell of the police. The victim can also approach consumer forums or file a civil suit for recovery of losses.

Can someone withdraw money from my UPI ID?

It is highly unlikely that someone can withdraw money from your UPI ID without your permission. However, it's crucial to keep your UPI PIN and other sensitive information secure to prevent any fraudulent activities on your account.

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