How Fake UPI Payments Are Scamming Users: A Complete Guide

Imagine this: You have just sold your old smartphone online. The buyer then sends a screenshot of the payment confirmation, you pass him the phone and later realize no money ever arrived in your account. You've been scammed.

Such fake UPI payment frauds are not only on the rise but also evolving at a worrying speed. In 2024 alone, Indians lost more than ₹500 crore to UPI scams, and the average scam per victim was ₹27,000. Shocked? You should be.

In this blog, we will elaborate on how UPI scams work, what signs of getting scammed you might be ignoring, and how you can protect your money from such scams. Whether you use UPI daily or just occasionally, the tips you find here can help you keep your finances safe and avoid a major loss.

What Is a Fake UPI Payment?

You know, the classic street magic trick where something appears to disappear but it’s just a sleight of hand? Fake UPI payments operate in the same manner, creating the false impression that money has transferred even though it has not. These are not any technical glitches or delays in processing. They are deliberate, aimed at taking advantage of the split-second decisions when you engage in digital transactions.

A college student recently ended up losing his entire semester fee when a “buyer” for his laptop shared a convincing screenshot of the payment sent. By the time the student figured out that no money had ever actually been transferred, the scammer and his laptop were long gone.

It’s the psychological aspect that makes these scams especially harmful. They take advantage of your trust in technology and hunger for convenience. When a payment screen seems familiar, you hardly ever question it, and that is exactly what scammers rely on.

What Are the Common Types of UPI Scams?

UPI scams are the carnival of the internet, bright, brilliant, and built to take your money. These are the acts you need to look out for:

Types of UPI Scams to Be Aware Of

• The Phishing Performer - “In 24 hours, your UPI account will be blocked! Click here to verify." Such panic-inducing messages or emails prompt you to click on malicious links that steal your credentials. These are not common amateur mistakes, they frequently use exact impersonations of bank logos, corporate language, and spoofed sender's ID to look credible.
• The QR Code Conjurer - Scanning a QR code is supposed to pay a merchant, isn’t it? Not when fraudsters substitute real codes with their own. In a crowded mall in New Delhi, customers who thought they were scanning a store’s fake payment code were instead sending money straight to scammers’ accounts.
• The Reversal Ruse - Rather than sending you money, the scammer sends you a “request,” believing you’ll approve without reading. It’s like anticipating a handshake and getting a pickpocket instead. These requests usually have descriptions intended to mislead, such as saying “Confirm to receive money” or “Accept refund.”
• The Helpline Hoax - You google for customer service for your bank, dial the number that comes up first, and unknowingly pick a scammer. They’ll walk you through “verification steps” that will instead empty your bank account. One victim lost ₹1.2 lakh after he called on what he thought was his bank's official helpline.
• The Remote Access Trap - “We observed suspicious activity on your account. Install this app, and we can go secure it." The UPI app turns out to be a remote access tool, and at this point, scammers now have full access to your device. By the time you catch on, they’ve already moved your money.

How Do Scammers Use QR Codes in UPI Fraud?

Today, QR codes are the silent killers of the fake UPI payments. Those innocent-looking simple black and white squares are now the third-most reported cause of UPI scams, accounting for over 40 percent of all UPI scams logged in India.

The Role of QR Codes in Digital Payments

QR codes turned UPI from being handy to hassle-free. Scan, approve, done! No typing, no errors, no confusion. They’re everywhere now: taped to shop counters, printed on bills, posted at street vendor carts. This commonality also makes them perfect vessels for fraudulent activity, as we’ve been scanning them without giving a second thought.

How Scammers Create Fake QR Codes

Scammers have made an art form of manipulating QR codes:

The Overlay Attack

Scammers often use stickers to paste their QR codes over valid ones. The stickers often have the business logo and colors, making them virtually indistinguishable from the original.

The Bait and Switch - Some scammers generate codes that display the correct merchant name at first but divert money to another account during the payment process. By the time you realize that the UPI ID doesn’t match the business name, you may have already approved the transaction.

The Digital Swap - Even online QR codes aren’t completely safe. The hackers might breach into business websites or listing pages and override the original code with a fake one. Dozens of customers ended up sending money to scammers after a restaurant in Mumbai had its online menu QR code hacked.

The Promotional Ploy

"Scan to get 50% cashback!" Payment request QR codes are often disguised as these enticing offers on flyers and social media. You think you’re getting a deal, but you’re actually approving a withdrawal from your account.

Identifying Unauthorized Transactions via QR Codes

The moment after you’ve scanned a QR code is your last line of defense. Here's what to cross-check:

• Is the merchant name an exact match? Using just “coffee” instead of “cafe coffee day” is a red flag.
• Is it requesting money from you or asking you to send money? If so, this is suspicious.
• Is the UPI ID suspicious? Branded IDs are usually issued on the portal for legitimate businesses.
• Are you pressured to act quickly and complete the transaction? Pressuring people is a scammer's best friend.

What Should UPI Users Do to Prevent Fraud?

With UPI scams, prevention is not just better than cure; it is often the only solution. Once funds have been transferred from your account through fraudulent transactions, recovery is almost impossible.

Tips to Protect Your UPI Credentials

Consider your UPI credentials as the keys to your financial kingdom. Would you give your house keys to a stranger? Of course not.

The Security Trifecta

These three measures need to be implemented immediately for additional security for your UPI credentials:

• Set up biometric authentication in all UPI apps.
• Open a new bank account with limited balance for UPI transactions.
• Enable transaction alerts for all of your linked accounts.

The Information Lockdown

Never share these under any circumstances:

• UPI PIN
• OTPs (one-time password)
• Card CVV or expiry date
• Sensitive banking information (Account number, Passwords)

How to Avoid Fake UPI Payment Links

Payment links are the digital equivalent of dark alleys, you need to be extra careful there.

The Direct Approach:

Avoid clicking links and go to your trusted UPI app directly. It will take a few seconds longer but could save you thousands.

The Trust Verification

Before clicking on any payment link, ask yourself:

• Did I initiate this transaction?
• Is this sender legitimate (blue tick on WhatsApp, official email domain)?
• Is the message causing panic and urgency unnecessarily?
• Is this payment request the one I am expecting?

The URL Inspection

Genuine payment links are usually sent from a legal domain. Preview the URL by hovering over links (on desktops) or pressing and holding (on mobile) before clicking. If "bankofbaroda.com” turns to “bank0fbaroda.co," that's a scam.

Staying Informed About UPI Payment Scams

Knowledge is not just power, it is protection. Scammers are counting on you to not be aware of their new tricks. Gather your defenses with these resources:

• Follow your bank and NPCI on social media to receive real-time fraud alerts.
• Opt-in for in-app security alerts from your UPI service.
• Visit "https://www.rbi.org.in/" for the financial security advisories issued by the RBI.

How Can You Recognize a Fake UPI Payment?

In the world of UPI, distinguishing between real and fake online payments is often a matter of seconds with clear observation. Train your eyes to look for these simple signs.

Signs of Fake UPI Payment Screenshots

Fraudsters generate payment confirmation screenshots that look convincingly real, but they will always have mistakes if you know where to look. Review payment screenshots for:

• Transaction ID: Every genuine payment has an alphanumeric ID that is unique.
• Consistent format: Font type, font size, and spacing should match official app notifications.
• Plausible timestamps: The time shown should align to when the transaction supposedly took place.
• Bank confirmation: Screenshots from the UPI app alone are insufficient, request to view the bank SMS.

Analyzing Payment Requests for Fraud

Payment requests are like wolves in sheep’s clothing, designed to look like they’re sending you money but in fact they’re robbing you.

The Directional Test

UPI interfaces are pretty clear about whether you are sending or receiving money, but you should realize that in the hustle of a transaction, these important details can easily be missed. Always check the direction of money before pressing the approve button.

The Verification Gap

Legitimate businesses do not send random payment requests. If you do get one, reach out to the sender using official channels (not information given in the suspicious message) to confirm.

Important Details to Check in UPI Transactions

When you approve a UPI transaction, those few seconds are your financial firewall.

The Triple-Check System

Check these three things for each transaction:

• Identify the recipient: Is the UPI ID of the recipient correct and does it correspond to the expected merchant?
• Amount accuracy: Does the amount agree with what you expected to pay?
• Transaction type: Are you sending money or is someone requesting money from you?

The Waiting Game

After making a payment, wait for:

• SMS confirmation from Bank (not only app notification).
• Merchant official payment receipt.
• Transaction history in your bank statement.

Cybersecurity experts refer to these as the “golden seconds,” the small moments of verification that distinguish security from regret.

What Should You Do If You Fall Victim to UPI Fraud?

Fraud can still occur even with good precautions. Your response in those first few hours is crucial for any hope of recovery.

Steps to Take After Unauthorized Transactions

The clock begins ticking when fraud is detected. Here's your emergency response plan:

• Call your bank’s fraud helpline (save this number in your contacts).
• Using your payment app, block your UPI ID.
• Screenshot all details of the fraudulent transaction.
• Change all the passwords and PINs for your financial accounts.

How to Report UPI Fraud to Authorities

Reporting isn’t only about your money, it also helps authorities track and take down scammers. Follow this sequence for better response:

• Lodge an FIR in your nearest police station or on the Cyber Crime Portal (cybercrime.gov.in).
• Submit a formal complaint with your FIR number to your bank.
• Notify your UPI app provider about the incident through registered numbers.

Recovering Financial Loss from UPI Scams

Recovery isn’t assured, but these steps will ensure that you have the best refund chances:

• Screenshots of all fraudulent transactions.
• Messages or emails sent to or received from the scammer (including call records).
• Details of the transaction (date, time, amount, and recipient UPI ID).
• Bank statement showing unauthorized transaction.
• Documentation of when and how you reported the fraud.

Nowadays, UPI scams are getting smarter, so it’s crucial to be very attentive to your apps. Qoli.ai allows you to see and monitor all of your apps, allowing you to block any app immediately. With Qoli.ai, cybersecurity is now in the hands of every individual, making sure that your financial transactions and data are protected from online criminals. Stay a step ahead of scammers and shield your digital life with the extra protection of Qoli.ai.

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Final Words

UPI has transformed India’s payments journey, making it easy in ways we couldn't have dreamt a decade back. But this convenience also carries risks that require a new style of vigilance.

The best form of protection isn’t technology, it’s behavior. The habit of pausing for a few seconds before you press the approval button can save you from even the tough scams.

Spread the knowledge among those who may be most vulnerable, like older relatives, teenagers, or any other unaware person who could potentially fall prey to these evolving threats. The conversation you have may help to secure someone’s financial future.

Stay alert, confirm before you believe, and keep your hard-earned money where it should be.