HomePersonal FinanceUPI Frauds - Types of UPI Scams and Prevention Methods

UPI Frauds – Types of UPI Scams and Prevention Methods

Unified Payments Interface (UPI) has revolutionized the way we handle financial transactions, offering a seamless and efficient method for transferring money. However, with convenience comes a growing concern – the surge in UPI frauds. This article delves into the various types of UPI scams, their underlying mechanisms, and effective preventive measures.

UPI Fraud

What is UPI?

UPI – unified payment interface is a real-time payment system developed by the National Payment Corporation of India. It is a payment system that provides the facility of money transactions from one account to other accounts instantly.

Rising Threats: UPI Frauds

In recent years, there has been a significant uptick in UPI fraud cases, painting a worrisome picture of the evolving tactics employed by cybercriminals. According to the Ministry of Finance, more than 95,000 fraud cases linked to UPI transactions were recorded in 2022-23, an increase from 84,000 incidents in 2021-22. As our reliance on digital transactions grows, understanding the landscape of UPI frauds becomes paramount.

Types of UPI Scams

Phishing Attacks

Phishing remains a prevalent UPI scam, where fraudsters trick individuals into revealing sensitive information through deceptive emails, messages or fake websites. Users unsuspectingly provide sensitive information, leading to unauthorized access to their UPI accounts. Recognizing and avoiding phishing attempts is crucial to thwarting this threat.

SIM Swapping Frauds

This type involves fraudsters convincing telecom operators to switch a victim’s phone number to a new SIM card under their control. This happens via convencing Telecom Provider to issue new SIM under false pretenses. Once accomplished, the fraudster gains access to the victim’s UPI transactions.

Malware and Spyware Threats

Malicious software can compromise the security of UPI apps, enabling unauthorized access to sensitive data. Malicious apps, often disguised as legitimate banking or payment apps, compromise user data, leading to unauthorized access and potential financial losses. Understanding how malware operates is essential for users to safeguard their financial information.

Vishing Scams

Vishing, or voice phishing, involves fraudsters posing as legitimate entities over phone calls to extract confidential information. Being cautious during phone conversations can prevent falling victim to this deceptive tactic.

QR Code Tampering

QR code manipulation is an intricate deception scheme in which scammers modify QR codes shown in shops or on payment terminals. When unknowing clients scan these altered QR codes, the payment is sent to the criminal’s account instead.

Payment Reversal

Payment reversal fraud happens when scammers deceive individuals into transferring money to their account by making false promises of providing goods or services. After receiving the payment, they disappear without providing any goods or services, causing financial hardship for the victims.

10 Tips to Secure Yourself from UPI Fraud

How UPI Frauds Happen

Understanding the modus operandi of UPI scams is crucial for users to recognize and avoid potential threats. From social engineering to exploiting vulnerabilities in UPI apps, perpetrators employ various tactics to execute their fraudulent activities.

Signs of a Potential UPI Scam

Recognizing the signs of a potential UPI scam is the first line of defense. Unusual account activities, unexpected requests for sensitive information, and unfamiliar payee requests are all red flags that users should be vigilant about.

Preventive Measures

Secure Password Practices

Using strong, unique passwords for UPI accounts adds an extra layer of security. Regularly updating passwords and avoiding easily guessable combinations are fundamental preventive measures.

Two-Factor Authentication (2FA)

Enabling 2FA enhances UPI security by requiring users to verify their identity through an additional step, such as a code sent to their registered mobile number. This acts as a robust deterrent against unauthorized access.

Regularly Updating UPI Apps

Keeping UPI apps up to date ensures that users benefit from the latest security patches and improvements. Neglecting updates may expose users to vulnerabilities that fraudsters can exploit.

QR Code Vigilance

To combat QR code scams, exercise caution when scanning codes. Only scan codes from trusted sources, and avoid scanning codes received through unsolicited messages or emails. Verifying the source ensures the integrity of the transaction.

Regular Account Monitoring

Vigilance is paramount. Regularly monitoring your UPI account for suspicious activities allows for swift detection of any unauthorized transactions. Timely identification empowers users to take immediate action, minimizing potential financial losses.

App Source Verification

Prioritize downloading UPI apps from official app stores. Avoid third-party sources to minimize the risk of installing malicious applications. Regularly update apps to benefit from security patches and enhancements provided by legitimate developers.

Educating Users about Common Scams

Awareness is a powerful weapon against UPI frauds. Financial institutions and government bodies should invest in educating users about common scams, enabling them to make informed decisions and avoid falling victim.

Legal Recourse for UPI Fraud Victims

In the unfortunate event of falling victim to a UPI fraud, knowing the necessary legal steps is crucial. Reporting the incident promptly to the concerned authorities and the bank is essential for potential recovery.

Banks’ Role in Preventing UPI Frauds

Banks play a pivotal role in preventing UPI frauds. Collaborating with law enforcement agencies, implementing robust security measures, and promptly addressing reported incidents contribute to a safer digital transaction environment.

Consumer Awareness Programs

Financial institutions and government bodies should invest in comprehensive consumer awareness programs. Educating users about evolving fraud tactics and security best practices empowers them to navigate the digital financial landscape safely.

Technological Advances in UPI Security

As technology evolves, so do security measures. Artificial Intelligence (AI) and machine learning are being increasingly utilized for fraud detection, while biometric authentication methods provide an additional layer of protection.


In conclusion, safeguarding oneself from UPI frauds requires a combination of awareness, proactive measures, and staying abreast of technological advancements. By understanding the types of UPI scams and implementing preventive measures, users can contribute to a secure digital financial ecosystem.


Q. How do I report a UPI fraud?
If you encounter a UPI fraud, immediately contact your bank’s customer support and report the incident. Additionally, file a complaint with the cybercrime cell and provide all relevant details to aid in the investigation.

Q. Can UPI transactions be reversed?
UPI transactions can be reversed under certain circumstances, such as unauthorized transactions or technical glitches. However, it’s essential to report the incident to your bank promptly to initiate the reversal process.

Q. Is UPI safer than traditional banking?
While UPI offers convenience and speed, it’s imperative to exercise caution and adhere to security best practices to safeguard your funds. Both UPI and traditional banking have their own security protocols, and users should remain vigilant regardless of the platform they use.

Q. Are UPI transactions anonymous?
No, UPI transactions are not anonymous. Each transaction is linked to the user’s bank account and requires authentication through UPI PIN or OTP, ensuring traceability and accountability.

Q. Can I get my money back after a UPI fraud?
In most cases, victims of UPI frauds have a chance of recovering their lost funds by reporting the incident to their bank and law enforcement agencies promptly. However, the success of fund recovery depends on various factors such as timely reporting and cooperation with authorities.

Shitanshu Kapadia
Shitanshu Kapadia
Hi, I am Shitanshu founder of moneyexcel.com. I am engaged in blogging & Digital Marketing for 10 years. The purpose of this blog is to share my experience, knowledge and help people in managing money. Please note that the views expressed on this Blog are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment , tax, financial advice or legal opinion. Please consult a qualified financial planner and do your own due diligence before making any investment decision.