As more people use digital payment methods, digital payment frauds are also increasing. Fraudsters have become very sophisticated and have come up with new tricks every day.  During online transactions, fraudsters could wipe out your bank account if you aren't careful.

A lot of people in India have fallen victim to digital payment frauds and lost lakhs of rupees. Any new technology brings fraudsters innovative strategies to take advantage of vulnerable people. Throughout this blog post, we will discuss methods of preventing various digital payment frauds.

An incident in real life

In Mumbai, a man lost Rs.80,000 from his bank account after clicking an income tax refund message. He received a message on his phone regarding the tax refund. He clicked on the message, thinking it was true. After clicking on the message, a mobile app was automatically downloaded on his phone. When the victim realized there was a problem, he deleted the message and app from his phone. He discovered the next day that his phone had been hacked and his money had been stolen from his bank account. After discovering that his money had been transferred to two different accounts, the victim immediately contacted his bank to block his account. 

Types of digital payment fraud:

1. Using QR codes for fraud

Using a quick response code, also known as a QR code, you can make contactless payments. By scanning the QR code, users can simply make payments.

In recent years, fraudsters have started to exploit this technology for their gain. A fraudster sends QR codes to users and instructs them to scan them in order to receive money in their bank account. Upon scanning the QR code, money is deducted from your bank account.

Keep in mind that you must scan QR codes only to make payments and not to receive payments.

2. The request for money fraud

The UPI service offers a feature called request money, through which you can request money. Using a PIN, the person to whom you have sent a request can make the payment. This feature has been abused by fraudsters who send fake requests that request users to enter their UPI PIN to receive money. The UPI PIN must be entered exclusively when sending money and not when receiving money.

3. Fraud with remote access apps

Here, you will be asked to install remote access applications like AnyDesk and TeamViewer. These apps are promoted as a way for fraudsters to gain access to your phone. When you download the app and allow certain permissions, fraudsters gain access to all your personal information, including OTPs. This information is then used by fraudsters to steal money from your account. 

4. Fraud on social media

Social media frauds are on the rise these days because so many people use social media. A lot of complaints are posted online against companies by customers. The fraudsters respond to those posts using fake company names and provide fake contact information. Customers who call that number will be asked for their personal banking information. This is why you should not take customer service numbers from websites such as Google or social media for granted. To find the company's customer care number, you should visit the company's official website.

How can these types of fraud be avoided?

1. Please do not provide personal information such as credit card numbers, CVV, OTPs, UPI PINs, and other sensitive information to anyone over the phone.  You won't be contacted by banks or reputed companies requesting your personal information.

2. Please do not Google a company or bank's customer service number. To obtain the company's customer service numbers, check out their official website.

3. You should never click on unknown links sent to you via SMS or email.

4. Accepting or making advance payments is not recommended. 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 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? 

By securing the payment flows between buyers and sellers through the Vouch Digital Escrow service, smooth transfers of products and payments are assured. Customers can rest assured that they'll be fairly compensated quickly and that their orders will be delivered on time. Fraudsters who request to scan QR codes or get OTP codes or ask you to click on phishing links can be easily avoided by declining and requesting that the transaction be completed through Vouch. 

Vouch Digital Escrow offers non-interest-bearing escrow accounts to all companies in India, and you are kept informed at every stage of the transaction. Payments, shipping, delivery, and fulfillment are all handled under the watchful guidance of Vouch's professionals, so deceit or fraud is impossible. Vouch's professionals will be able to answer all of your questions throughout the entire transaction process. With Vouch, business transactions are transparent, streamlined, and convenient.

This is Fraud Story #80. 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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