What Are UPI frauds, and How Do They Happen?

UPI frauds are very common these days because these frauds happen through UPI apps which are very prevalent these days.

upi frauds

UPI frauds are very common these days because these frauds happen through UPI apps which are very prevalent these days. There have been more than ten thousand UPI frauds that happened in the past year. As people are using UPI for payments these days majority of the time, they are also exposing themselves to fraud and stealing of money.

Using a UPI app is easy, but it is equally easy to commit fraud through the UPI platforms. Fraudsters and cybercriminals have devised many ways of committing UPI fraud. The process of UPI fraud could be through fake IDs or stealing Identity information from others’ UPI IDs. There are also a number of steps that a person can take to protect himself from UPI fraud. The types of UPI frauds are in the next section of this article.


Phishing is the most common form of UPI fraud that happens on the app landscape. Phishing is the process of sending out emails and other communication pieces to show that they are official pieces of communication, and thus, demand identity information and sensitive information from people, which is later used to steal money from user accounts. The emails might lead you to fraudulent websites that will then syphon off your information and steal money from your bank account.

People have to stay aware of the different ways in which phishing emails can be sent to them. One must know about the difference between real emails and phishing emails to protect his assets. With the information gathered from phishing emails, fraudsters can hack into your profile, take all the information related to your financial account, and then steal money.

Fraud sellers

Fraudulent sellers make profiles that are not real and try to steal from people in the name of selling products or services to them. Fraudulent sellers are found in the online marketplace among the businesses that provide products and services. Fraud sellers give you the greed of discounts, offers, and coupon wins to extract financial information from you and make you take financial actions that lead to stealing of money. This leads to a breach of trust and stealing through fraudulent ecommerce websites.

Fraud through screen monitoring apps

Some fraudsters and cyber criminals also take action to send out fake screen monitoring app notifications and messages that confound the user and make him click on the notification. When he clicks on the notification, he is then redirected to a new website where he might be asked to fill in his financial details, like UPI pins.

Once the UPI pin is accessed and used, it can be used to take over your UPI apps and syphon off money from your account. OTPs and other personal details are accessed which are used to transfer money easily from one account to another. This allows the users to gain access to your banking app so the frauds can take your money when they want.

Use of malware

Malware is one of the most used forms of software for accessing payment information and then UPI PIN to take out money from the account. Malware can affect your laptop or phone. You could download malware from an email or a link without knowing, as these work automatically. A user might be affected by this software when he decides to go to an unsecured website.

Malware is designed to extract and copy data from the infected device. The use of malware has been extensive for many reasons. You might not be able to protect your phone or laptop from malware, but if you turn on the advanced settings of a browser, you might be protected from unsecured websites.

Money mules

A money mule is a more elaborate fraud. Money mules are intermediary accounts that work as storehouses of the cash that they syphon off stolen account information. The money mules are intermediary accounts that are used to carry the money from the fraud activity so that the real location of the defrauded funds is not traced.

There are other ways, like SIM cloning, deceiving UPI handles, etc., that help in carrying out fraud through UPI accounts. The deceiving UPI handles and collect request type of UPI frauds are also types of frauds that happen through people’s UPI Ids. UPI fraud can happen on any platform.

The frauds can happen on social media, on online marketplaces, and through unsolicited messages. The deceiving UPI handles may look like they are genuine and authentic, but they are not really helpful as they are malicious. There is also another UPI fraud mechanism called vishing, which means fraudsters pose as official bank representatives who try to approach you on behalf of the bank and win your trust.

These individuals are actually frauds, and they do try to take authentic payment information and UPI pin or push you to conduct transactions for them by posing as genuine people. People who are not aware and careful fall into their trap and give their hard-earned money knowingly into their hands.

To protect your money through the UPI portals, you need to keep your UPI pin secure and change the pin from time to time. When changing your UPI pin, keep in mind that you should choose a strong pin with a combination of different numbers. Regularly try to change your UPI pin to unique combinations and enhance the security of the application.

You should also add additional locks and two-factor authentication layers to the UPI application. When downloading the UPI apps, always try to download from a good app download store. Avoid using third-party UPI apps that you are not sure of. When scanning QR codes, too, always verify the QR codes shown to.

If you are making merchant payments, make sure that you are making these payments to genuine and trustworthy merchants. These steps will protect your UPI app from fraudulent activity. The UPI app can be protected through multiple layers of security on the phone, and this can protect your financial assets.

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