The United Payments Interface, or UPI, enables you to easily send money and receive it. Several apps are available to carry out UPI-based transactions and transfer money. You can use Paytm, Google Pay, BHIM, and many more apps of this type. With UPI, you can connect many bank accounts in one mobile application.

Despite its simplicity and ease of use, UPI has its downsides. The use of UPI apps has led to many cases of people losing their hard-earned money. Therefore, UPI should be used with caution. The cost of a single mistake can be high. Throughout this blog, we will discuss various ways of protecting yourself from fraud related to UPI apps.

Online scam defrauds a woman of Rs.41,000

The fraud begins when fraudsters become interested in buying products advertised by sellers on online marketplaces like OLX. Using UPI apps, they get in touch with the seller and prompt them to transfer money. Fraudsters request money from the seller by making a request through the UPI app instead of sending money. There are many unsuspecting sellers who accept the request and enter the PIN, believing the request has been sent to collect money from the buyer. But, if approval is granted and the PIN is entered, the money is deducted from the account. 

Here’s a true incident. An Indian woman in Pune, aged 26 years old, decided to sell an old cupboard and bed while she was moving houses. She posted an online advertisement for the items on OLX. She was called on her cell phone number which she listed with her OLX ad by someone claiming to be one Vijay Verma. He made an offer to purchase the items and agreed to pay in advance. He stated that he will send someone to pick up the items at a later time. In order to pay, he opted for popular platform options like Google Pay and Paytm. Then he sent her a payment request via WhatsApp, instructing her that she would be required to accept the request and enter her PIN to receive the payment. Believing the request has been sent to receive the money, the lady accepted the request and entered her PIN. Immediately afterward, she had Rs.41,000 taken out of her account.

One thing you must keep in mind is that, when receiving the money, you will never be asked to enter your personal identification number. PINs are only required to be entered when sending money.  Whenever someone you don't know requests money from you, you should simply decline.  

How to prevent fraud on UPI apps:

1. Beware of transfer requests - UPI apps like Google Pay, BHIM, PhonePe, and so on, have the option called request money. This option is being misused by fraudsters to cheat innocent people. There have been many such cases where people have lost hard-earned money.

2. Never provide third-party access to your phone - There have been many instances where people have lost their money by installing screen-sharing apps. To avoid such frauds, you must never download screen-sharing apps on your phone. There are many screen-sharing apps like Anydesk, Teamviewer, and Screenshare.

3. Beware of fake UPI apps - There are many fake UPI apps available on both Google Play and Apple apps stores. Downloading these apps on your phone can cause a lot of problems. So, it is very important to be careful while downloading apps on your phone.

4. Using a digital escrow platform is recommended for making or receiving payments. With Escrow, you do not need to share any of your financial information with anyone. There is a platform for escrow called Vouch.


Also Check: Fraud Story #83 - How to avoid frauds on OLX


How does digital escrow work?

With digital escrow, a third-party account holds the buyer's money until the seller complies with the contract terms. An escrow company supervises all parties involved in the transaction.

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

A smooth transfer of products and payment is assured with the Vouch Digital Escrow service, which secures payment flows between buyers and sellers. We can assure customers that they will be fairly compensated quickly and their orders will be delivered on time. Whenever fraudsters request QR codes or OTP codes or ask you to click on links that are phishing, you can avoid them easily by declining and requesting that the transaction be completed via Vouch

With Vouch Digital Escrow, you can open a non-interest-bearing escrow account for companies in India, and you will be kept in the loop at every stage of the process. All payments, shipping, and deliveries are handled under the watchful guidance of Vouch's professional team, so cheating and fraud are impossible. All of your questions will be answered by Vouch's professionals throughout the entire transaction. Vouch makes business transactions transparent, streamlined, and convenient.

This is Fraud Story #88. 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