A UPI scam involves fraudulent transactions using the United Payments Interface (UPI), where scammers manipulate victims into transferring money or revealing sensitive financial information.

How do spoofed credit messages work in UPI scams?

Scammers send fake credit messages appearing to be from a credible bank, promising rewards for transferring the "credited" amount to a designated account, tricking victims into transferring money.

What is phishing in the context of UPI scams?

Phishing involves scammers sending fake UPI links or asking for sensitive information like UPI PINs, which they then use to make fraudulent transactions.

How does malware work in UPI scams?

Scammers send links containing malware that, when clicked, installs software to steal sensitive information from the victim's device.

What is money muling in UPI scams?

Money muling involves scammers using intermediaries who receive and transfer funds through their UPI accounts in exchange for a commission.

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UPI Scams And How To Save Yourself From It?

Alankar Mishra

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Updated: 19-04-2025 at 8:30 AM

India has been grappling with a surge of fraudulent and illegitimate activities with the onset of digitalization and with the relevance of the United Payments Interface (UPI) at an all-time high. Scammers have found a new way to manipulate and fool people into falling into their traps. UPI scam refers to any fraudulent transactions that take place with UPI.

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What Is A UPI Scam?

A UPI scam or UPI fraud is a criminal activity wherein fraudsters trick people into making transactions through their respective UPI IDs. Fraudsters manipulate people into thinking that transferring money is the only option.

What To Know And How Does UPI Scam Work?

There are some things that one should know about UPI scams and how scammers work. Everything is described below in brief for one’s understanding:

The new UPI scam involved scammers sending the victim a spoofed credit message portraying that an amount of money had been credited into their account through a UPI transaction.
This message is usually posed by the scammer as from a credible bank or payment service provider as well.
The scammers may accompany the spoofed credit messages with promises of rewards and incentives for transferring the credited amount to a designated account.
These promises may force victims to comply with the scammer's instructions in hopes of gaining additional financial benefits.
Victims, taking into account that other spoofed credit messages are credible and genuine, proceed to transfer the credited amount to the scammer's account using UPI or other digital payment methods.
As a result, they involuntarily and unknowingly become accomplices in facilitating unauthorised transactions and suffer financial losses, in turn becoming the ultimate victims of UPI scams when they thought they’d be getting some level of financial gain.

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Different Types Of UPI Scams

There are various types of UPI scams. Some of the major UPI scams used by fraudsters are mentioned below:

Overpayment Scam

Scammers send a payment request for more than the required amount for a product or service and make them believe that he/she will refund the excess amount immediately after.

Phishing

Phishing is a type of UPI fraud where they send you fake UPI links or ask for sensitive information like UPI PINs, passwords, etc. They then use it to make fraudulent transactions without your knowledge.

Fake Money Transfers

Fraudsters manipulate people into thinking that they’ve made a legitimate payment but in reality, it wasn’t legitimate at all.

Fake UPI QR Codes

Scammers send a fake UPI QR code to the mobile numbers of people and when people click on it, it takes them to a suspicious website or application.

Impersonation

Fraudsters take on the identity of an institution’s representative and trick people into sharing their sensitive banking information.

Fake Payment Screenshots

Scammers send fake payment screenshots to people to fool them into believing that the transaction has been completed.

Fraudulent Sellers

These fraudsters work in online marketplaces. They trick people into buying defective goods or do some mishap in the delivery.

Frauds Through Applications

Scammers access people’s screens by accessing the mobile applications they use and capture their sensitive information for personal gain.

Malware

Some links sent by scammers may even contain malware, so when one clicks on the link, the software will get into the system and get all the sensitive information on your device.

Deceiving UPI Handles

Scammers form fake UPI handles and send money requests to people’s accounts with some appealing or fear-inducing messages.

Collect Request

Fraudsters send a collect payment to people people’s UPI applications and manipulate them into making transactions.

Money Mulling

Money mulling is a type of scam where they target people who can be used as intermediaries. The scammers tell them that they will receive some commission in return for using their UPI account to receive or transfer funds.

SIM Cloning

SIM cloning is the process when scammers make a duplicate SIM of the targeted person to get their sensitive pieces of information like UPI PINs, passwords, etc.

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Vishing

Vishing is another type of scam where they pose as bank officials or as representatives from any UPI payment providers to gain the victim's trust. They then manipulate them to reveal sensitive pieces of information.

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RBI Guidelines On Unauthorised Transactions

The Reserve Bank of India has issued some guidelines to protect people from unauthorised UPI transactions:

Bank’s responsibility: Banks are instructed to take full responsibility for bearing the loss if an individual reports the transaction within 3 days.
Time: If people report unauthorised transactions between 4-7 days, they have to bear the transaction amount or Rs. 5000 - Rs. 25000, whatever might be lesser.

How Do You Prevent UPI Scams?

One can protect themselves by taking some preventive measures. Some of the preventive measures against UPI scams are listed below:

Be cautious of random calls and messages. Never reveal sensitive information on calls. Immediately disconnect if they ask for a UPI PIN, password, or other information.
Don’t download any suspicious applications on your device.
Check the authenticity of a UPI ID before making the payments.
UPI apps have built-in filters that will help you identify scams. Pay attention to alerts and avoid accepting requests from unknown sources.
Follow security measures. Set a strong UPI PIN, and do not use the same PIN for a lot of apps. Change the PINs often.
Keep track of all your UPI transactions for any unauthorised transactions. If you spot any such unauthorised transactions, report them to your bank immediately.

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What To Do If Funds Are Accidentally Sent To A Wrong Address?

In instances where one accidentally sends funds to the wrong address and completes the transaction, one can do:

Contact the person to whom you sent the money and request them to send your money back.
Inform the bank immediately so that they can help you in resolving the issue.

What To Do If One Falls Victim To UPI Scam?

If by any chance, you fall victim to a UPI Scam, please ensure that you’re doing the following steps:

Visit the website of the National Cyber Crime Reporting Portal and report the crime.
Contact your bank and immediately report the crime.
Block your UPI account if needed.
Change your UPI passwords and PINs.

A Recent Case Study

A woman recently wrote about how someone tried to scam her on Twitter (X). She received a call from a scammer posing as an associate of LIC transactions. She wrote, “Omg guys, someone recently tried to scam me with UPI. I was at my parents'. My dad and I had just discussed maturing investments and what to do next with them. He had just left the house. I got a call from some guy who said he got my number from my dad.” on Twitter.

The scammer tried to convince her to send Rs. 25,000 in LIC money as her father didn’t have UPI.

The woman later felt something fishy as the scammer was trying to convince her to send Rs. 45,000 to his account, and she decided not to do anything until her father got back.

Conclusion

In conclusion, to steer clear of such UPI scams, users are required and requested to be wary of the legitimacy of such messages if they receive them and to always keep an eye on their banking account app and also their account statement for verification and cross-checking.

If the message seems illegitimate, don’t give out any response and block the user or the number from which you got the message or call.

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