The Unified Payment Interface (UPI) has made online payments extremely fast and simple. Nobody is surprised by the success of UPI. However, the number of incidents of fraud in online transactions using UPI has increased.
As a result of UPI fraud, there has been a significant increase in cyber fraud reports on the National Cyber Crime Reporting Portal (NCRP), according to Ministry of Home Affairs data. Between the third and last quarters of 2022, there was a 15.3 percent increase in cyber fraud complaints.
UPI Scams Have Increased
According to the data, 206198 complaints were filed on the National Cyber Crime Reporting Portal in mid-quarter 2022, with the number increasing by 15.3 percent to 237659 in the second quarter.
In the mid-quarter of 2022, there were 62,350 UPI fraud complaints, which increased to 84,145 in the second quarter of 2022.
This represents a 34% increase. However, the main reason for this increase is an increase in UPI payments. UPI payments increased by 1200 percent in the fiscal year ending September, according to the RBI.
According to a report from the Ministry of Home Affairs, online financial fraud accounted for 67.9% of total cybercrime. Another type of financial theft that is on the rise in debit/credit card/SIM switch fraud. In the first quarter of 2022, 24,270 similar frauds were discovered, rising to 26,793 in the second quarter.
The number of internet banking complaints about the report, on the other hand, has decreased. A total of 20,443 internet banking complaints were reported in the first quarter of 2022, which has since decreased to 19,267 in the second quarter.
UPI payments, on the other hand, are steadily increasing. According to Abplive.com, UPI payments reached 10 lakh crore in May 2022, and this amount has now risen to 12.11 lakh crore. UPI is one of the simplest ways to conduct a transaction, reducing the burden of carrying a wallet on a daily basis.
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What Is UPI?
UPI is a payment method that allows users to link multiple bank accounts to a single mobile app and conduct transactions without entering the Indian Financial System Code (IFSC) or account number.
The UPI ID can be created using the bank account’s bank details and the mobile number associated with the account.
The application will send an OTP (one-time password) to the user’s mobile number, which can be used to finish the registration process and set a PIN. Following that, transactions can be completed using the mobile number or the UPI ID.
How does it work?
Customers can use a mobile platform to perform basic bank transactions via a UPI interface. The National Payments Corporation of India (NPCI) created it, and the Reserve Bank of India oversees it (RBI).
By using certified digital payment apps such as Google Pay, Paytm, and PhonePe, users can conduct quick mobile transactions with just one click. Although UPI has a large impact on the digital economy, it also poses serious security risks.
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Types of UPI Scams
UPI fraud complaints, hacking, cyber-frauds, and other risks. The following are some of the ways in which UPI scams occur:
1. Phishing Scam
This is a scam in which fraudsters send payment links in the form of an SMS. These forged bank URLs will appear almost identical to the genuine URL. When you click on that link, you will be taken to your phone’s UPI payment app, where you can select any app for an auto-debit.
The money will be deducted from the UPI account immediately after you give permission. In addition, the phone will be infected with a virus or malware that can steal the financial information stored on the phone.
2. Unverified Links
Many users are unaware that receiving money through the UPI app does not necessitate the scanning of a QR code or the entry of your UPI pin. Hackers frequently send bogus links that include the option to request money.
When you click on this link, you will be prompted to enter your UPI pin or scan a code. This makes your financial information vulnerable to hackers.
3. Cloning of SIMs
SIM cloning is a relatively new innovation that has gained popularity since banks mandated OTP. If a scammer clones your SIM, he or she can even change the UPI PIN. The fraudster obtains the victim’s bank account information and ID proof in order to reset the PIN.
Malware is one of the most common types of cybercrime, and it can be accidentally downloaded from a phishing email attachment or an unprotected website. Malware is designed with the goal of extracting and copying data from infected devices.
5. Fake UPI handles
Fraudsters are constantly devising new methods to deceive people, one of which is the use of social media. People may fall for false pages on social media with names that sound similar to real ones.
Putting your personal information on such sites is dangerous. Screenshots of your UPI handles can be used to defraud you. It is best not to make these available to the public.
6. Fake Phone Calls
Fraudsters will contact you pretending to be bank employees, requesting your UPI pin or requesting that you download a third-party app for verification. This gives them access to your personal information as well as your account information. Such inquiries should be ignored unless they come from reliable sources.
7. Remote Screen Monitoring
Unverified app downloads from the app store can sometimes result in a privacy breach and data leak. These third-party apps can access UPI app information and collect personal information from your phone, potentially leading to UPI fraud.
How do Hackers Commit UPI Fraud?
When it comes to fraudulent transactions, a large number of Hackers have been observed to follow a consistent pattern. Here are a few examples:
Step 1: Instead of messaging, most fraudsters call their targets to get their attention. They frequently impersonate a bank official and request a seemingly insignificant issue.
Step 2: To make a phone call appear genuine, fraudsters ask for basic verification questions such as name, date of birth, and mobile number.
Step 3: Hackers frequently exploit technical flaws in the app or website to communicate with the victim. They explain a problem that can only be solved by providing some personal information. They steal their information in this manner.
Step 4: Once the victim has been persuaded, the fraudster will request that they download an app to their phone. Two of the apps available on the Google Play Store are AnyDesk and ScreenShare.
Step 5: When you download AnyDesk, it, like any other program, asks for permission to access your personal information. But don’t be fooled: these apps have complete access to your phone.
Step 6: The fraudster will then ask the victim for a 9-digit OTP, which will be displayed on their phone. As soon as the victim enters the code, the hacker will request authorization from the phone.
Step 7: When the app has all of the required permissions, the caller gains complete control of the victim’s phone without their knowledge. A hacker steals credentials and uses the victim’s UPI account to conduct transactions after gaining complete access to your phone.
Various methods for preventing and controlling UPI fraud:
- No government or financial institution will ever ask for personal information via text messages or phone calls. If you suspect UPI fraud, contact your bank immediately to block the e-wallet. This will prevent any further losses. The scam should be reported to the police or a cybercrime cell as soon as possible.
- Unverified communications or phone calls from individuals posing as bank representatives should be avoided. SMSes can also be sent in the name of the Employee Provident Fund Organisation (EPFO) or the Insurance Regulatory and Development Authority of India (IRDAI). It should be noted, however, that they do not send messages to users.
- Instead of searching Google for customer service numbers, visit the official website. Scammers frequently post bogus phone numbers on websites that appear to be legitimate or authorized but are not.
- Users should not accept payments from unknown accounts when using UPI. If you receive unidentified money demands, simply refuse them.
- UPI payment apps have an excellent feature that notifies users if they receive a request from an anonymous account, which aids in the prevention of fraud. Ignore this warning at your peril, as it could cost you thousands of rupees.
- Install anti-virus software on your laptops and desktop computers to keep them safe.
Online payments are the most advantageous. These have become a part of our daily lives, and it is critical that everyone is aware of the various methods that fraudsters can use to deceive you.
They may devise an intriguing new method of duping you into disclosing your personal information to them. As a result, it is critical to exercise extreme caution when making online payments. Please report the incident to your card issuing bank or the nearest Cybercrime Authority.