Scammers Utilize Unauthorized Account Transfers to Deplete Victims' Bank Balances

UPI Fraud Alert: Understanding the Risks and Prevention Measures

Key Figures:

• 80%: Estimated percentage of UPI frauds that occur due to a small misunderstanding.
• UPI Collect Request: A feature in UPI apps that allows users to approve payments, but can be exploited by scammers to confuse people.

Overview

Read also: Correcting Credit Score Errors: A Guide to Ensuring Accurate CIBIL Reports and Optimal Loan Eligibility

The Unstructured Supplementary Service Data (USSD) based payment system, commonly known as UPI (Unified Payments Interface), has emerged as a popular mode of digital transactions in India. However, with the increasing adoption of UPI, cases of fraud have also been on the rise. In this report, we will highlight the common mistakes that lead to UPI scams and provide essential tips to prevent such incidents.

How UPI Collect Requests Work

A UPI collect request is a normal feature in UPI apps that allows users to approve payments. However, scammers have found ways to exploit this feature to confuse people. When a collect request appears on your phone, you are asked to approve it and enter your UPI PIN. This can lead to a situation where you end up sending money instead of receiving it.

Common Scenarios

Read also: Missing a Single EMI Payment Can Adversely Impact Credit Profile

Scammers often target individuals who are selling goods online or those who are expecting refunds or prize money. They may send a collect request claiming to be the buyer or the company representative. If you accept the request and enter your UPI PIN, you will be sending money to the scammer's account.

Prevention Measures

To avoid falling prey to UPI scams, follow these simple rules:

• Only enter your UPI PIN when you are paying someone.
• If you are receiving money, do not enter a PIN.
• Always read the notification carefully before approving a collect request.
• Check who sent the request and why before approving it.
• Avoid following instructions from strangers over phone calls or messaging apps when it comes to payments.

Additional Tips

• Be cautious when approving collect requests from unknown individuals.
• Genuine payments can always be made directly through UPI without needing you to approve anything.
• If you mistakenly approve a fraudulent request, contact your bank immediately and report the transaction.

FAQs

1. What does a UPI collect request mean? A UPI collect request is a request asking you to approve a payment from your bank account. If you accept the request and enter your UPI PIN, the money will be transferred from your account to the recipient's account.
2. Do you need to enter a UPI PIN to receive money? No, you never need to enter your UPI PIN to receive money through UPI. The PIN is required only when you are sending money or approving a payment request.
3. What should you do if you mistakenly approve a fraudulent request? Contact your bank immediately and report the transaction. You should also call the digital payment fraud helpline at 1930 and file a complaint through the cybercrime portal as soon as possible.