6 Types of UPI Frauds and How to Stay Safe from Them

UPI (Unified Payment Interface) is an instant payment system created by the National Payments Corporation of India (NPCI). It facilitates instant money transfers between the bank accounts of the two parties.

As UPI makes transactions convenient, it has become one of the most preferred payment options. It allows users to avoid the hassle of carrying cash or cards.

While UPI has made transactions easy, it can also be susceptible to fraud. Thus, it's essential to know how to protect yourself from such UPI fraud.

1. Impersonating Sellers Fraud

Often, fraudsters use a seller's number to receive orders from customers. In such a situation, they will take the order and ask the customer to make the payment using UPI. Thus, the fraudster will get the money and not deliver the product.

2. Phishing Fraud

Phishing links look similar to the original URL of a merchant. When you click on the unverified link, you will be redirected to a UPI App and then you will be asked to enter your UPI PIN. This enables auto-deduction and leads to unauthorised transactions from the UPI app.

3. UPI Fraud via Authorized Access to Screen Mirroring Apps

In this case, fraudsters posing as bank employees will try to connect with you or list customer care numbers online that are actually fake. If you try to connect on this number for any complaints, the fraudster will ask you to download 3^rd party apps, which are screen mirroring apps. These apps provide complete access to your device through which they carry out unapproved financial transactions.

4. OTP or PIN Fraud

This is one of the most common types of UPI transaction fraud. Many individuals share their OTPs or PIN with fraudsters unknowingly. After that, these fraudsters gain access to the individual's account and make unauthorised transactions using UPI.

5. UPI Fraud via Collection Request

A collection request scam is quite common with UPI Payment Apps. Scammers committing this fraud usually provide a reason of a refund or debit reversal and then compel you to click on 'Collect Request'. Once you click on it, you will be asked to provide your UPI PIN. As soon as you enter the PIN, scammers immediately debit the money from your bank account.

6. UPI Fraud via Misleading UPI Handles

On social media sites, you will come across several pages having counterfeit UPI handles set up to address consumer grievances. Customers who genuinely face UPI-related challenges reach out to these pages hoping to get their queries resolved. For scammers, this is an ideal way to get confidential financial data which in turn results in UPI fraud.

1. Don't Share UPI PIN

This is the most important security measure that you need to take. Don't share your UPI PIN with any person you don't trust.

2. Avoid Downloading Apps You Don't Trust

Many scammers create fake apps to receive orders from people. They will take money from the customers using UPI and not deliver products to them. Thus, it's essential to place orders from websites or apps that are trusted.

3. Check the Credibility of the UPI ID before Scanning

Often, scammers create UPI IDs that look similar to reliable addresses. Thus, people scan such UPI IDs and make transactions unknowingly. To avoid this UPI scam, you must verify the address first.

4. Stay Away from Fraudsters

If you don't know the caller or the information shared by him/her, then avoid this person entirely. Don't share bank details, UPI PIN, or OTP with such people.

5. Ensure You Follow Secure Practices

In order to prevent UPI payment scams, you must follow some security measures, like:

• Install anti-virus software on your device.
• Install biometric recognition software on your device.
• Don't open links from unreliable sources.

As per RBI guidelines, banks are required to refund the amount. The individual needs to report the unauthorised transaction complaint quickly.

In case the customer and bank aren't at fault for the unauthorised transaction, then the below rules apply for the refund:

• If the customer reports an unauthorised transaction within 3 days, then the whole amount will be refunded by the concerned bank.
• If the customer reports an unauthorised transaction within 4-7 days, then RBI guidelines require customers to bear the transaction amount or an amount within INR 5,000 to INR 25,000, whichever is lower.
• If the customer reports an unauthorised transaction after 7 days, then the bank will not refund any amount if the policy doesn't allow it.
• At AU Small Finance Bank, we offer AU 0101 App, which features fingerprint-based login, PIN-based App Lock, Pattern Lock, User ID – Password combination & Face ID-based login (for iOS users). Download the app now for secured banking & online payments.

Sources:

https://www.bajajfinserv.in/insights/common-types-of-upi-frauds-and-how-to-stay-safe

https://www.vidhikarya.com/legal-blog/financial-fraud-rbi-guidelines-for-unauthorised-transactions#:~:text=Within%204%2D7%20Days%20%2D%20Limiting,days%20and%20before%207%20days.