With the increasing use of digital payment methods, payment frauds are also on the rise. Fraudsters have become very sophisticated and are constantly coming up with new tricks.  If you are not careful, fraudsters can drain your bank account during online transactions.

There are several cases of digital payment frauds in India that have caused tens of thousands of rupees in losses. Innovative fraudsters exploit any new technology to take advantage of vulnerable individuals.

One-Time Password (OTP) Fraud - 

One-time passwords, also known as One-Time Pins, are passwords that are valid for only one login session or transaction on a computer or other digital device.

A one-time password (OTP), a common two-factor authentication method, is considered highly effective against criminals attempting to steal money through online transactions. But not anymore.

It has been reported that many cases have occurred in which criminals have tricked people into revealing OTPs or hacked their smartphones to obtain them. 

In a recent case - The man assumed that the caller was a real medicine supplier and gave him his credit card number and OTP.

Caller posing as medicine supplier conned Nagpur man out of Rs 1.8 Lakh

In Nagpur of Maharashtra, a 32-year-old man lost Rs 1.81 lakh after sharing his OTP with someone over the phone to buy medicines.

As the man, who lives in Parate Nagar, approached a medical shop on a Sunday evening seeking medicines, the shopkeeper informed him that the medicines were out of stock. After returning home, he began to search online for medicines when he received a call from an unidentified individual offering to deliver the medicines to his home.

Considering him to be a genuine medicine supplier and requiring the medicines urgently, the victim gave him the order. The man said he was required to pay in advance for the medicines to be delivered to his home. 

The victim attempted to pay using UPI, but the transfer failed. Then the fraudster asked the victim to share his credit card number with him. The victim shared his credit card number and received an OTP message, the fraudster then again asked him to share that OTP with him. The victim shared the OTP he received on his mobile phone with the caller. In less than half an hour, the fraudster withdrew Rs 1.8 lakhs from the victim's account.

You might also want to check - Fraud Story #119 - Fraudster dupes man of 10 lakh via WhatsApp

How to avoid this kind of fraud?

1. Never provide sensitive information like credit card numbers, CVVs, OTPs, UPI PINs, and other confidential information over the phone.  Banks or reputable companies will not contact you for your personal information.

2. Don't Google a company's or bank's customer service number. Check out their official website to find customer service numbers.

3. When you receive a link via SMS or email, do not click on the link.

4. Receiving or making advance payments is not a good idea. Payments can be made and accepted using Vouch. It is a digital escrow service that releases your payment once your desired service is provided.

How does digital escrow work?

In digital escrow, a third-party account holds the money deposited by the buyer until the seller has fulfilled the terms of the contract. The escrow company supervises the transacting parties.

What is the role of Digital Escrow in preventing online fraud in India? 

Digital escrow services are offered by many companies in India. Among the most trusted is Vouch.

Vouch’s Digital Escrow service is a transparent way for buyers and sellers to build trust and secure a clean transfer of product and payment. Sellers can feel assured that they will be fairly compensated promptly, and buyers will feel confident that their order will be delivered as expected and on schedule. Vouch Digital Escrow keeps you updated and informed at every step of the transaction process till the end. Vouch’s professionals are always available to assist you with all queries that you may have during the entire transaction process. 

There is no scope for deceit or fraud since the payments, shipping, delivery, and execution are carried out under the honest and watchful eyes of the Vouch’s professionals. With Vouch, any business transaction becomes transparent, uncomplicated, and hassle-free. If you ever come across a fraudster asking for OTP, asking you to scan a QR code, or asking you to click on phishing links, you can simply refuse and ask him/her to proceed with the transaction through Vouch.

This is Fraud Story #120. Check back here for more fraud stories and scams that you can protect yourself from.

Safety is not just about protecting your credit, debit card number, and UPI accounts. It's about having control of your money till you've received the product or service you bought online!

Note: This is a good-faith initiative to educate the world about avoiding frauds like these and how to act when you're becoming a victim of such a situation. 

Do you have a fraud you would like to report? Please write to us at letstalk@iamvouched.com