Digital transactions are the need of the hour, and with the country rushing towards a cashless economy, it’s important to stay vigilant of all the loopholes in the system. 

UPI, being one of the foundation stones of the digital economy, needs to be airtight when it comes to security. With UPI transactions hitting an all-time high this year, it’s no surprise that UPI is one of the most preferred methods of payment in recent times. 

And why wouldn’t it be?

All you need is a 4-digit PIN to authorize your transaction and the deal is done in seconds. Of course, something so awesome definitely comes with its share of liabilities– and that’s what we’re going to see in this article. 

Amid a massive spike in online banking fraud, HDFC Bank issued a warning to all online banking users. According to the alert, fraudsters are stealing money from users’ bank accounts via UPI. Hackers access users’ mobile phones remotely through a device control app called AnyDesk.

So, how do we deal with UPI fraud? How do hackers take your information? What is the best way to keep yourself safe from so many seemingly intelligent tricksters online?

Let’s begin!

#1 Types of cyber frauds

Before you stay vigilant, you must first be aware of the types of fraudulent cyber activities out there. While there are one too many types of frauds, we’ll be discussing those pertaining to UPI scamming, in this article. Here goes:

  • Phishing

Fraudsters send bogus e-mails to access sensitive information of the potential victim. Once the victim keys in their details (password or PIN) into the fraudulent site, the information is immediately passed on to the hacker for misuse.

  • Malware

Malware is one of the most common forms of cyber fraud and can be mistakenly downloaded from a fake e-mail attachment or an unsecured website. Malware is designed to extract and copy data from the infected device.

  • Money Mule

Money Mule is a more elaborate fraud where once the victim’s data is obtained, fraud rings transfer money to an intermediary account to house the loot. This account acts as one of the money mules to park money collected from different victims.

  • SIM Cloning 

SIM cloning is a recent addition that has mushroomed after the OTP-mandatory rule by banks. If a fraudster clones your SIM, he can even change the UPI PIN. The fraudster gets hold of the victim’s bank account details and ID proof to reset the PIN. 

  • Vishing

Vishing is mostly scamsters posing as bank representatives, asking questions ‘on behalf of the bank’. These individuals weave a web of lies and enquire about the victim’s personal information to extract their PIN or password. 

#2 The Execution

It’s been observed that fraudsters follow a pattern whilst executing these elaborate plans. We’ve managed to weave a step-wise timeline of how these plans are generally executed. Take a look:

Step 1

Fraudsters usually call targets to get their attention, as opposed to texting. They commonly disguise themselves as a bank representative, calling for a seemingly harmless issue.

Step 2

To make the call sound legit, they proceed to ask verification questions like your date of birth, name or mobile number.

Step 3

There is always a problem. Hackers usually use technical difficulties in the app or website to get to talk to the victim. They usually weave a false story that the victim may have to forfeit their personal information to resolve the issue.

Step 4

Once the fraudster has convinced the victim, they proceed to ask the latter to download an application on their phone. Some of the apps are AnyDesk and ScreenShare, which are available on the Google Play Store.

Step 5

While downloading AnyDesk or any similar application, it asks for the user’s privacy permission, like any regular app. But don’t be fooled, these apps can access everything on your phone.

Step 6

The fraudster will then ask the victim for a 9-digit OTP, which is generated on their phone. As soon as the victim reveals the code, the hacker will also ask to grant permission from the phone.

Step 7

When the app acquires all permissions required, the caller starts to take full control of the victim’s phone without their knowledge. After getting full access to your phone, a hacker steals passwords and begins transacting with the victim’s UPI account.

We identified other approaches, too. Fraudsters send an SMS and ask the victim to forward it on another number that they provide. After the message is successfully sent, it permits the fraudster to link the victim’s mobile number or account through UPI to their mobile. 

Fraudsters also send a ‘collect request‘ or a refund request to your Virtual Payment Address (for ex: name@bankname) on apps like Google Pay, PhonePe, etc. 

Most users authorize these requests without paying attention, and this can lead to any amount of money being collected from their account.

#3 Staying Vigilant: A Guide

Scamsters aren’t inevitable; they can, of course, be avoided by taking some essential precautions. These aren’t just to keep you away from fraud; these are also fundamental things to keep in mind to keep all your information safe in the era of the Internet.

  • Beware of engaging with fraudsters

As vague as it sounds, the best way to protect yourself from fraudsters is to stay away from engaging with them. Your bank will never call to discuss your sensitive information; if you receive any call asking you to do the same, that’s a red flag right there.

You can check for the authenticity of unknown numbers with apps like Truecaller, which has a global database of numbers flagged by users.

  • Take extra precaution while requesting/accepting requests

Fraudsters take advantage of the “request money” feature on apps like Google Pay, PhonePe, BHIM, etc.  Imposters express interest in buying a product advertised on various online platforms and engage with the seller on a phone call.

They make the seller of the product to transfer the money using UPI apps’ ‘request money’ option. A small careless click can sometimes cost you thousands. Remember, receiving money requires no PIN.

  • Pay attention to SPAM warnings on your UPI app

UPI apps like Google Pay and PhonePe generally gives users a spam warning if they’re receiving a request from an unknown account. Do keep an eye out for such statements, and if you do spot any such suspicious accounts, make sure to report as spam!

  • Be wary of malicious apps

Frauds have also been found using fake mobile apps to cheat people. They create an app that is similar to the original bank app and submit it on the Google Play Store.

When a customer accidentally downloads and installs the fake app on his/her mobile phone and gives necessary permissions, then the app starts sending out sensitive data to enable fraudsters to withdraw money from the victim’s account.

Several fake apps like Modi Bhim, Bhim Modi App, BHIM Payment-UPI Guide, BHIM Banking Guide, Modi ka Bhim, etc. have been reported to have stolen personal data of customers in the name of providing some valuable banking service.

  • Follow security practices

Make sure that you don’t reveal your PIN to strangers under any circumstances. Also, make sure to protect your UPI apps with biometric recognition software. This way, hackers cannot misuse your account. It’s also recommended that you install anti-virus software to keep an eye out for other malicious software. 

  • Never open e-mails without checking their authenticity

E-mails are one of the easiest ways to trick a user into downloading Malware and subsequently obtaining their information. Make sure to always scan your e-mails for viruses/Malware.

  • Keep a check, every once in a while

Once in a few months, sift through your account activity to check for any suspicious behaviour on your account. We often forget to keep track and may miss a few red flags along the way. It’s always best to do a thorough check once in a few months. If you notice any unusual pattern, make sure to alert the bank right away.

  • Avoid using open Wi-Fi

Using an open Wi-Fi is never a good idea as it may give the hacker a good chance to access everything that’s on your device. Instead, always check if the Wi-Fi is trustworthy before connecting to it.

  • Keep track of all your bank messages

Take a closer look when you receive messages from your bank. Know the difference between a password, PIN and an OTP and carefully examine the message for inconsistencies to stay safe. Keep track of all your bank messages to make sure you’re aware of all the transactions to and from your account.

While no application is entirely fool-proof, the only way to stay safe is to be wary of fraudsters who can go to any level to fool you. In any case, make sure to contact your bank if you think something’s not right. 

We’ll see you next time with more useful tips on keeping your money safe!  

Also read: IPL & World Cup Contribute to 15% of Digital Payments