With the rise of digital payment transactions in India, UPI frauds have become increasingly common nowadays. Fraudsters are coming up with innovative ways to dupe you of your hard-earned money. According to the Reserve Bank of India's Annual Report for FY 2023-24, the number of digital payment frauds rose to 36,075 in FY 2023-24, compared to 9,046 frauds in 2022-23. Although the quantum of money involved in such frauds has fallen from Rs 45,358 crore to Rs 13,930 crore.
If you use UPI for transactions, you must be aware of this latest scam — 'UPI overpayment scam'. What is the modus operandi and how can you protect yourself from this scam? Read here to find out.
What is a UPI overpayment scam?
Imagine you are in the middle of a hectic day in the office. You receive a call from an unknown number claiming that the person is at the hospital, and he has sent you Rs 20,000 by mistake.
He immediately needs it back as there is a medical emergency in his family. He has already initiated a money collection request on your UPI app. All you need to do is to tap on this collection request and clear the payment. He constantly requests you do it as a priority and does not even let you cut the call without sending him the money. It is a very common mistake to send money to a wrong mobile number, you tell yourself. You can see your bank has also sent an SMS regarding the same. Feeling pressured, empathetic and mildly convinced, you tap on the money request notification sent by him, to transfer the money without even verifying it. Saying a heartfelt thank you, the caller cuts the call.
When you get free during lunch break, you check the balance of your savings account on the mobile banking app. To your horror, you discover the truth — the caller has only sent Rs 200, but you have unknowingly transferred a whopping amount of Rs 20,000 back. In a hurry, you read 'Rs 200.00' as Rs 20,000 in the message sent by the bank, and returned the amount without even verifying it. You realise you have been scammed.
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Kunal Varma, CEO and co-founder of Freo, a neobank, says, "Typically, this scam involves a fraudster accidentally sending a small amount of money to a victim's UPI account. The scammer then contacts the victim, claiming a mistake and requesting that the money be returned, often suggesting that the victim sends back a larger amount than was originally received."
These scams thrive because they prey on haste and inattentiveness. "People are often busy and might not scrutinise details as closely as needed. Hence you should be cautious and always verify when receiving unexpected requests. Take a moment to verify the situation before acting. If you suspect a scam, immediately report it to your bank and the UPI app provider. You can also file a complaint with the National Payments Corporation of India (NPCI) and cyber cell," says Nikhil Jois, Head of Growth, Bureau, a cyber security solutions company.
Varma from Freo shares a real-life case study of one of their users who was targeted for a UPI overpayment scam. The identity of the individual has been withheld upon request.
"I never thought I'd fall victim to an online scam until it happened. One morning, I received a notification that a small amount of money had been transferred to my UPI account from an unknown source. Shortly after, I got a call from someone claiming to have mistakenly sent that money to me and requesting I send it back, but to a different UPI ID. They sounded so genuine and urgent that I almost proceeded with the transaction. Feeling slightly suspicious, I decided to contact the customer support of the payment app first. They advised me not to return the money immediately and helped me scrutinise the transaction. Upon their investigation, they confirmed it was a scam attempt," said the user.
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How to stay protected from UPI overpayment scams?
The SMS template you get whenever any money is received in your bank account shows up to two decimal places of the amount. If you are disengaged or in a hurry, you may wrongly read Rs 200.00 as Rs 20,000. This is also one of the reasons why scamsters do not give you any time to react to such scams.
"Received Rs 200.00 in your ..Bank AC X4182 from 123456789@ybl on 29-05-24. UPI Ref: 123456789123." This is the template of a UPI money received SMS.
"Indeed, the way amounts are displayed in UPI transactions may contribute to potential scams, especially when amounts are shown with two decimal points (e.g., Rs 3200.00). This could be misleading if someone quickly glances and misreads the amount, especially in poorly designed user interfaces or under low lighting conditions, where Rs 3200.00 might be misinterpreted as Rs 320000," says Varma from FREO.
The scamsters can also use disguises to conduct the UPI overpayment scam. As per Jois from Bureau, "One of the common strategies in UPI overpayment fraud is fake reversals. In fake reversals, the scammer sends a small amount to your UPI handle and then contacts you, posing as a customer service representative or a seller who accidentally overpaid. They pressure you to 'refund' the excess amount by initiating a new transaction, often with a cleverly disguised QR code or a link that looks legitimate."
This incident serves as a stark reminder for all UPI users.
Here are some tips you can follow to prevent falling into these type of UPI scams:
- Always double-check payment requests: Before approving any UPI request, always double-check who is sending it and whether it is a request to send or receive money. Be wary of any unexpected payment requests.
- Verify sender details: If you receive a payment request from someone unknown or for an unexpected amount, verify the sender's details through a call or message before proceeding.
- Be cautious with unsolicited messages and collection requests: Scammers often send unsolicited messages with misleading or false claims. Do not respond to or approve any requests without verifying the sender's identity and the purpose of the transaction.
- Don't feel pressurised: Never rush into money transfers based on phone calls, especially from unknown numbers. Remember, scammers often employ urgency and emotional manipulation to exploit their victims. Stay vigilant and protect your hard-earned money.
According to Sachhin Gajjaer, Managing Director & Founder, Sattrix Information Security, a cyber security company, "The government should be ensuring stringent data protection laws, advanced encryption, and others to safeguard databases. Given these cyber security and data security challenges, exploring alternative solutions, like secure data-sharing protocols and improved communication between institutions, might be a more secure path towards achieving similar goals."