One of India's largest mobile wallet companies Paytm offers a wide variety of services including cellular recharge, bill payment, ticket booking, money transfer, and much more.

The convenience, offers, and variety of services that Paytm provides makes it a popular app. Efforts have been made by Paytm to warn users about this fraud and to remain cautious when uploading KYC.

For all mobile wallets in India, KYC or Know Your Customer process is mandatory. Mobile wallet users will not be able to access all features unless KYC is completed. Transfers of funds will be more problematic and more issues will occur. While many people rush to complete KYC, fraudsters target them to make quick money. Paytm users who have their bank accounts connected to it should be aware of this fraud. 

Paytm scam: How did a man lose Rs 1.85 lakhs?

A hefty sum of Rs 1.85 lakhs was stolen from Arvind Kapoor, a manager of Ambience Mall in Gurgaon. How did this scam happen? It all started with a man pretending to work at Paytm.

Kapoor was contacted by this fraudster who warned him to get his KYC done or else his Paytm account would be deactivated. This is what Kapoor wrote about the experience. Kapoor received a phone call several days ago from an individual claiming to be an employee of Paytm. According to the fraudster, the KYC of his Paytm account had not been updated. His account was not updated, he would not be able to make any transactions. He lost Rs 1.85 lakhs to this scammer when he followed the instructions given to him.

How did the fraudster do it?

Having completed the KYC registration process, Kapoor was called by the fraudster to verify the process had been completed. Using his standard Chartered and American Express credit card, Kapoor made 3 transactions of Rs 1, Rs 10, and Rs 1 to check the status of his Paytm account. Following this, Kapoor received three OTPs on his mobile phone, and the fraudster asked Kapoor to share the OTPs with him. Afterward, Rs 1.85 lakhs were wiped from the account. Kapoor attempted to call the number (fraudster's number), but it had been switched off. What are the lessons you can learn from this scam? Never give out your OTP to anyone.

Also Check: Fraud Story #222- Hyderabad men scammed on Facebook marketplace while buying a car

How to avoid this fraud -

1. Do not divulge your personal information to anyone over the phone. In no case will a bank or a reputed company ask for your personal information like your card number, CVV, or OTP over the phone.

2. You shouldn't let a stranger guide you through the mobile app installation process. If he requests to modify your mobile settings, it might be a scam.

3. The use of digital escrow platforms for payments is recommended. When you make an online payment with Escrow, no financial information is shared. There is a platform for escrow called Vouch.

How does digital escrow work?

In digital escrow, a third-party account holds the money deposited by the buyer until the seller fulfills 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 #227. 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. 

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