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Unified Payments Interface (UPI) has redefined how India pays, turning smartphones into digital wallets for millions. From buying vegetables at a local market to paying utility bills, UPI’s ease and speed have made it a household name, with billions of transactions processed monthly. But this digital revolution has a dark side: a surge in scams targeting unsuspecting users. Reports suggest that UPI-related frauds have spiked, with losses running into crores annually, affecting everyone — from urban professionals to rural shopkeepers.
Take Priya, a Bengaluru school teacher, who lost ₹20,000 after scanning a fake QR code at a trusted vendor’s stall. Or consider Anil, a vegetable seller in a small Maharashtra town, who downloaded a fake UPI app and saw ₹12,000 vanish from his account. These aren’t isolated cases — cybercriminals are exploiting UPI’s popularity with increasingly sophisticated tactics. This article dives deep into the most common UPI scams, how they work, and practical steps to safeguard your money, ensuring you can use UPI with confidence.
Cybercriminals are constantly evolving their methods to exploit UPI’s accessibility. Below are the most prevalent scams targeting Indian users, each illustrated with real-world patterns and variations.
Phishing remains a top UPI fraud, where scammers send SMS, emails, or WhatsApp messages posing as banks, UPI apps, or government agencies. These messages often create urgency, like “Verify your account or lose access!” or “Claim your ₹5000 refund now!” Clicking the embedded link leads to a fake website that steals your UPI PIN or OTP.
For instance, Ravi, a Delhi shopkeeper, lost ₹15,000 after clicking a “tax refund” link that mimicked his bank’s portal. Variations include fake KYC update requests or “account suspension” threats.
Scammers may also use smishing (SMS phishing) with short URLs or vishing (voice phishing) via calls to extract sensitive details. In one case, a Kolkata student was tricked by a WhatsApp message offering a “UPI cashback,” losing ₹8,000 to a cloned Paytm site.
Fraudsters create counterfeit UPI apps that mirror trusted platforms like Google Pay, PhonePe, or BHIM. These apps, often found on unofficial websites or third-party app stores, install malware to steal bank details.
A Mumbai college student lost ₹10,000 after downloading a fake BHIM app promoted via a shady pop-up ad. Another variation involves “update” prompts that lead to malicious apps.
In rural areas, where tech literacy may be lower, scammers distribute fake apps via WhatsApp groups, targeting small merchants.
For example, a Gujarat farmer lost ₹18,000 after installing a “new UPI app” shared by a local contact.
QR codes are a convenient UPI feature, but they’re also a scammer’s playground. Fake QR codes, often printed on posters or sent via messages, redirect payments to fraudsters’ accounts. Some scammers secretly swap the QR code displayed at a stall.
In Chennai, a small business owner lost ₹50,000 after scanning a tampered QR code at a supplier’s stall, unaware it was swapped by a scammer.
Scammers may also email fake QR codes for “charity donations” or “online purchases.” A growing tactic involves overlaying malicious QR codes on legitimate ones at shops or ATMs.
In Hyderabad, a café owner reported customers losing money after scanning tampered codes stuck over his original payment QR.
Impersonation scams involve fraudsters posing as bank officials, UPI app support, or even friends to extract your UPI PIN or OTP. They often call with alarming claims, like “Your account is compromised!” or “We need to verify your KYC”.
A Hyderabad retiree lost ₹30,000 after sharing his PIN with a caller pretending to be from his bank.
Scammers may use spoofed caller IDs to appear legitimate or send fake “friend in need” messages via hacked WhatsApp accounts.
In a Pune case, a housewife was duped by a caller posing as her son’s friend, claiming an emergency, resulting in a ₹25,000 loss.
UPI’s “request money” feature is a convenient tool, but scammers exploit it by sending fake requests from unfamiliar or slightly altered UPI IDs. Approving such a request instantly debits your account.
The National Payments Corporation of India (NPCI) warns that these scams often target users who don’t double-check the requester’s identity.
For example, a Jaipur teacher approved a ₹5,000 request thinking it was from a colleague, only to realize the UPI ID was off by one letter.
Scammers may also send bulk requests via automated systems, banking on users’ oversight. In a Delhi incident, a freelancer lost ₹7,000 to a request disguised as a client’s payment follow-up.
A newer scam, flagged by Karnataka Police, involves scammers depositing a small amount (e.g., ₹100) into your account to spark curiosity. When you enter your UPI PIN to “check” the deposit, fraudsters gain access to withdraw larger sums.
A Mangalore homemaker lost ₹25,000 after falling for this trick.
Variations include deposits labeled as “lottery winnings” or “refunds” to lure victims. In a Gujarat case, a shopkeeper received ₹200 with a message to “verify your account,” leading to a ₹40,000 loss after he complied. This scam preys on users unfamiliar with UPI’s security protocols.
Scammers combine psychological manipulation with cutting-edge technology to execute UPI frauds. They exploit urgency, creating panic with messages like “Your account will be blocked in 24 hours!” to bypass rational thinking. Fear of financial loss or missing a “reward” clouds judgment, a tactic rooted in social engineering.
For example, phishing messages often mimic official bank logos and language, leveraging India’s cultural trust in authority figures like bank officials. Technologically, scammers use malware in fake apps to log keystrokes or capture OTPs, as seen in a Mumbai case where a fake PhonePe app installed spyware.
Spoofing techniques make calls or SMS appear to come from legitimate sources, while tampered QR codes exploit UPI’s instant transaction feature. In a notable incident, a Bengaluru tech worker lost ₹1 lakh after a fake QR code redirected his payment to a scammer’s account, with the fraudster using a cloned merchant ID.
Understanding these tactics — urgency, trust exploitation, and tech deception — helps you spot red flags like unsolicited calls, suspicious links, or unfamiliar UPI IDs.
Protecting your UPI transactions requires vigilance and simple habits tailored to India’s diverse user base, from tech-savvy urbanites to rural merchants. Here’s how to counter each scam, with extra tips for vulnerable groups like seniors and small business owners.
Verify Sources: Never click links in unsolicited SMS, emails, or WhatsApp messages. Visit your bank’s official website or app directly using a trusted browser.
Check URLs Carefully: Ensure the website URL starts with “https://” and matches the official domain (e.g., paytm.com, not paytm-offer.com). Look for misspellings or extra characters.
Report Suspicious Messages: Forward scam messages to your bank or report them to NPCI at {https://www.npci.org.in/} for investigation. Save screenshots as evidence.
For Seniors: Teach elderly users to avoid clicking links and call the bank’s official helpline for verification.
Download from Trusted Sources: Only install UPI apps from Google Play Store, Apple App Store, or official bank websites. Verify the developer name (e.g., “BHIM by NPCI”).
Check Reviews and Ratings: Look for apps with high ratings, large download counts, and verified developer credentials. Avoid apps with recent negative reviews.
Update Regularly: Keep apps updated to fix security vulnerabilities. Enable auto-updates on your phone.
For Rural Users: Educate small merchants to avoid apps shared via WhatsApp or unofficial links, sticking to well-known platforms like PhonePe or Google Pay.
Verify the Recipient: When scanning, ensure the UPI ID or merchant name matches the intended recipient. Ask the vendor to confirm their ID verbally.
Avoid Unverified QR Codes: Don’t scan codes from posters, emails, or random messages. Stick to QR codes displayed by trusted merchants.
Use Secure Apps: Choose apps with QR code verification, like Google Pay’s “verified merchant” feature, to ensure authenticity.
For Merchants: Regularly check your QR code for tampering and display it in a secure location to prevent overlays.
Never Share Sensitive Info: Banks never ask for your UPI PIN or OTP via calls, SMS, or emails. Hang up and call your bank’s official number (from their website or passbook).
Enable Two-Factor Authentication: Use biometric locks (fingerprint/face ID) or MPIN in UPI apps for added security.
Educate Family: Teach elderly or less tech-savvy users to recognize fake calls. Role-play scenarios to build confidence in saying “no.”
For Small Businesses: Train staff to verify customer care calls by contacting the bank directly, avoiding rushed decisions.
Scrutinize Requests: Check the UPI ID letter-by-letter before approving money requests. Decline unfamiliar or suspicious ones immediately.
Set Transaction Limits: Configure your UPI app to cap daily transactions (e.g., ₹5,000) to limit potential losses. Adjust limits in app settings.
Enable Real-Time Alerts: Turn on SMS or email notifications for every transaction to spot unauthorized requests instantly.
For Freelancers: Verify client UPI IDs via a secondary channel (e.g., email or call) before approving requests.
Don’t Engage: If you receive an unexpected deposit, don’t enter your PIN to “check” it. Contact your bank’s helpline to report the transaction.
Monitor Accounts Closely: Review bank statements weekly for unauthorized activity. Use mobile banking apps for real-time tracking.
Report Immediately: Alert your bank about suspicious deposits and file a complaint if needed.
For Rural Users: Spread awareness in local communities about not responding to unsolicited deposits, using simple analogies like “stranger’s money is a trap.”
Google Pay: Enable “Payment Protection” to block unauthorized transactions and use “Verified Merchant” for QR scans.
PhonePe: Activate “Secure Mode” to require biometric authentication for high-value transactions.
BHIM: Use the “Block UPI ID” feature to stop suspicious contacts from sending requests.
Paytm: Set a passcode for UPI transactions and enable “Fraud Detection Alerts” in settings.
For All Users: Explore your app’s security settings and enable features like transaction PINs or spending limits.
Secure Your Device: Use strong passwords, PINs, or biometric locks on your phone and UPI apps. Avoid reusing passwords across apps.
Avoid Public Wi-Fi: Don’t use UPI on unsecured networks at cafés or malls, as hackers can intercept data. Use mobile data or a VPN.
Stay Informed: Follow NPCI at {https://www.npci.org.in/} or your bank’s social media for real-time updates on scams and safety tips.
Educate Your Community: Share scam awareness with family, friends, and local groups, especially in rural areas or among seniors.
Falling for a UPI scam can be distressing, but quick action can limit damage and improve recovery chances. Here is a detailed roadmap:
Contact Your Bank Immediately: Call your bank’s helpline (listed on their official website or passbook) to freeze your account and block further transactions. Most banks offer 24/7 support for fraud cases. Provide transaction IDs and timestamps.
Report to NPCI: File a complaint via the NPCI website at {https://www.npci.org.in/} or call their toll-free number (1800-120-1740). Submit details like the scammer’s UPI ID, transaction amount, and screenshots of messages or calls.
Lodge a Cybercrime Complaint: Visit cybercrime.gov.in or your local police station to file a First Information Report (FIR). Include all evidence, such as SMS logs, call recordings, or fake app screenshots. This step is crucial for legal recourse.
Monitor Your Account: Check your bank statements daily for unauthorized activity. Set up alerts for even small transactions to catch discrepancies early. Report any issues to your bank promptly.
Seek Legal Help: If losses are significant, consult a cybercrime lawyer to explore recovery options. Some banks offer fraud insurance that may cover losses if reported within 24 hours.
Cope Emotionally: Scams can cause stress or shame. Talk to trusted friends or family, and avoid self-blame — scammers target everyone. Consider joining online forums to share experiences and learn from others.
Spread Awareness: Share your story (without sensitive details) to warn others. Post on community WhatsApp groups or social media to educate neighbors, especially vulnerable groups like seniors or small merchants.
UPI’s convenience has transformed India’s financial landscape, but its popularity makes it a prime target for scammers. By understanding the tricks behind phishing, fake apps, QR code frauds, impersonation, money requests, and jumped deposits, you can protect your hard-earned money. Adopt habits like verifying UPI IDs, downloading apps from trusted sources, and never sharing your PIN or OTP.
Priya, Anil, and Ravi learned the hard way, but their stories can be your shield. Beyond personal safety, share this knowledge with your family, friends, and community — especially those less familiar with technology. Support government initiatives like NPCI’s fraud awareness campaigns and local police cybercrime workshops to build a safer digital India. Together, we can keep UPI a secure tool for everyone.
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Rajeev Kumar is the primary author of How2Lab. He is a B.Tech. from IIT Kanpur with several years of experience in IT education and Software development. He has taught a wide spectrum of people including fresh young talents, students of premier engineering colleges & management institutes, and IT professionals.
Rajeev has founded Computer Solutions & Web Services Worldwide. He has hands-on experience of building variety of websites and business applications, that include - SaaS based erp & e-commerce systems, and cloud deployed operations management software for health-care, manufacturing and other industries.