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Top UPI Scams in India: How to Identify and Avoid Payment Frauds

18 Sep 2025

4 min read

Blog Post

The Unified Payments Interface (UPI) has emerged as one of the fastest-growing digital payment systems in India, transforming how millions transact every day. Its ease, speed, and convenience have made UPI a preferred mode for peer-to-peer transfers, merchant payments, bill settlements, and more.

However, with increasing adoption comes increasing risk: scammers and fraudsters are continuously developing new tactics to exploit vulnerabilities in human behavior, app interfaces, and payment workflows.

In recent times, certain features of UPI have been exploited more than others, leading authorities to act. According to LocalCircles survey data, 1 in 5 Indian families has experienced UPI fraud at least once in the last three years.

Moreover, the Ministry of Finance reports that in FY 2024-25, UPI-related cases among digital payment frauds involved losses in the order of hundreds of crores of rupees.

This article explores the various types of UPI frauds currently plaguing users in India, examines latest regulatory and security changes, and gives best practices to help protect yourself. If you know what to look for, you can enjoy the benefits of UPI without falling victim to scammers.

Most Common UPI Scams in India and Tips to Stay Safe

Latest Regulatory & Security Landscape

Before diving into the specific fraud types, it helps to understand what recent changes have taken place in India’s UPI ecosystem. These are important because fraud prevention is evolving rapidly.

Removal of P2P “Collect” / Pull Requests
- From October 1, 2025, National Payments Corporation of India (NPCI) has directed that person-to-person (P2P) collect requests, also known as pull requests, will be discontinued permanently.
- These are requests where someone else requests money from you, which you then may approve. Fraudsters often misuse this feature to send deceptive requests.
Surge in Digital Payment Frauds, Including via UPI
- The Reserve Bank of India (RBI) and other survey/monitoring bodies report that fraud among digital payments (cards, internet banking, UPI) has risen sharply. For instance, the number of frauds involving payment cards and internet banking more than doubled in FY 2024-25 vs FY 2023-24, both in terms of number of cases and total monetary value.
- UPI transaction volumes continue to grow steeply; with greater volume, there is greater exposure to risk.
Awareness & Under-reporting Issues
- Surveys show many people do not report frauds, even when they have experienced them. For example, over 50% of victims in some surveys did not file any official complaint.
- Public awareness efforts (NPCI, banks, media) are increasing, but many frauds occur because of social engineering, phishing, etc., rather than purely technical vulnerabilities.

Types of UPI Scams You Should Know

Here are the major scam types being observed, updated with recent trends:

Scam Type	How it Works	What Makes It Effective
Fake UPI IDs / Impersonation	Scammers create UPI IDs that mimic legitimate businesses, or pretend to be government agencies, banks, or known brands. They contact victims via phone, SMS, or WhatsApp and request payment for bogus causes — e.g. “tax refunds”, “penalties”, “service charges” etc.	Users trust the perceived source; urgency or fear of penalty drives action without verifying.
Fraudulent Payment Requests (Push / Pull / Collect Requests)	Before the removal of collect requests, scammers used “push” or “request money” features to ask victims to authorize payments. They may pose as customer support or “agents” seeking refunds or confirmation.	The victim sees a legitimate looking request and authorizes it, often under pressure. The pull-request removal is a reaction to many of these scams.
Fake QR Codes or Payment Links	Scammers send or display QR codes or links (via SMS, emails, ads, social media) that look genuine. Scanning or clicking may lead to fake apps or payment pages. Sometimes small payments are shown credited to build trust, then larger fraudulent payments are requested.	QR codes are visually trusted by many; links are fast, immediate. Once victim trusts, they are more likely to comply further.
Phishing / OTP & PIN Theft	Through phishing SMS/voice/email, or via phone calls pretending to be bank / NPCI official, fraudsters ask users for OTPs or UPI PINs. Sometimes they get victims to download remote access or screen-sharing apps to steal credentials.	Users believe they are helping with a “security” or “refund” process; human psychology of trust exploited.
Screen Sharing / Remote Access Scams	Fraudsters trick victims into installing apps that allow remote access or screen sharing, under some pretext (help with phone issue, account recovery etc.). Then they initiate transactions from the device.	Gives fraudster direct access, can bypass many protections if user is coaxed into giving permissions.
Fake Cashback / Reward Schemes / Investment Lures	Offers of high prizes or cashback in return for small initial transfers, or investment in fake schemes. Once initial small engagement is done, scammer extracts larger sums.	The lure of easy money, or greed, plus fear of missing out.
Social Media & Search Engine Scams	Fraudsters use fake search ads, fake customer care numbers, or pose via social media messages. Victims contact these, believing them to be official, and are misled.	Because people search online when in doubt, fake ads can mislead; social media is trusted among close contacts.

Also Read: How to Ensure a Secure Financial Future for Your Newborn Child?

Latest Data & Examples

According to BankIQ (using Ministry of Finance data), UPI-related scams in 2024-25 involved about ₹485 crores in losses across approximately 6.32 lakh cases.
LocalCircles survey found that about 20% of families (1 in 5) reported someone in their family experienced UPI fraud in the past 3 years.
Many frauds were caused by clicking on a fake payment link thinking they would get money (but instead money was debited); in those who experienced fraud: ~40% said they clicked on such links, ~50% said their UPI PIN was compromised.
Regulatory changes like shutting down the collect/pull feature came directly due to misuse of payment requests by scammers.

How to Protect Yourself from UPI Frauds

Below are practical, up-to-date strategies you can use to avoid being a victim.

1. Always Initiate Payments Yourself (“Push” Mode)

Since NPCI has removed collect/pull requests for P2P, insist on paying only when you initiate the transaction or scan the QR.
Do not approve payment requests unless you are absolutely certain who is asking, and why.

2. Verify UPI ID, Merchant & Source

Check the spelling of UPI IDs. Fraudulent IDs may be similar but with minor changes (extra letters, swapped digits).
If someone claims to be from a bank / government / well-known company, independently verify via official contact numbers (from their website, etc.), not through the message/contact you received.
Always use the official app or website for merchant payments.

3. Be Wary of Unsolicited Links, QR Codes & Messages

Avoid clicking on links from unknown sources or scanning QR codes sent randomly via messages, SMS or social media.
If you scan a QR code in public places, inspect if it’s legitimate; sometimes scammers paste fake codes over genuine ones.
Be cautious when messages offer large rewards, cashbacks, investments. If it sounds too good to be true, it probably is.

4. Protect Your OTP, PIN & Device

Never share your OTP or UPI PIN with anyone asking on phone, message, or through remote apps.
Avoid installing or granting access to remote screen-sharing or control apps unless absolutely necessary, and only from trusted sources.
Keep your phone’s OS, apps, and security patches up to date. Use anti-malware/security apps if possible.

5. Use Two-Factor / Multi-Factor Authentication & Extra Security Settings

Many UPI apps support additional security measures (e.g. biometric locks, device binding, app lock, etc.). Enable these.
Avoid saving UPI PIN in insecure backups; keep device-linked security active.
Prefer apps that support fingerprint / face authentication, where available.

6. Monitor Transactions Regularly

Check your bank and UPI app frequently for unexpected / unauthorized transactions.
Set alerts / notifications for every transaction (debit, credit) so you know immediately if something unauthorized happens.
Keep transaction limits in mind; some fraudulent transactions may be large or split into smaller ones to evade detection.

7. Report Fraud Immediately

If you notice anything suspicious, contact your bank / payment app immediately with transaction details (UPI ID, date, time, amount).
You can also report to NPCI or regulatory / cybercrime authorities. In many states, cyber-crime reporting portals exist.
The sooner you report, the better chance of stopping further losses or possibly getting a refund, if governed by bank policy and if you were not negligent.

What Happens When You Are Scammed — Refunds & Recovery

Banks may offer refunds in certain circumstances, especially when fraud is reported promptly and the victim has observed prudent behavior (e.g. not sharing PIN, not clicking suspicious links).
But getting money back is not guaranteed. The outcome depends on the nature of the scam, how the fraud took place, and whether the user was negligent.
Filing a police FIR may help your case, especially when more than just the bank/app is involved. Document everything: screenshots, transaction IDs, communication transcripts.
Regulators (NPCI, RBI) have also been pushing for faster grievance redressal mechanisms in payment frauds. Make use of complaint platforms.

Regulatory Actions & Technology in Fraud Prevention

NPCI’s decision to remove pull/collect requests is a big one, as that feature was exploited heavily. This simplifies the transaction flows in many apps and reduces one major attack vector.
Use of AI / Machine Learning by financial institutions to detect anomalous transaction patterns. Suspicious behavior (unusual amount, unusual recipient, new device/location) triggers additional verification.
Fraud awareness by NPCI, banks, fintech providers is increasing: knowledge-centre content, public advisories, fake-link / QR-code warnings.

Conclusion

UPI remains one of India’s most powerful tools for digital payments: fast, convenient, largely trustworthy—but not risk-free. As fraudsters become more creative, user vigilance, strong security hygiene, and awareness of how scams work are essential. The recent regulatory changes (especially removal of pull/collect requests) show that authorities are responding, so staying informed is your first line of defense.

By following the best practices above—verify always, don’t share sensitive info, monitor transactions, report quickly—you can reduce your risk significantly. UPI should serve you, not the fraudsters.