Centre for Police Technology (CPT) presents a 31-Day Cybersecurity Knowledge Series for police personnel, law enforcement agencies (LEAs), corporate investigators, digital forensics professionals and cybersecurity practitioners.
India’s Unified Payments Interface (UPI) has made instant digital payments a part of everyday life. From buying groceries to paying bills and transferring money between bank accounts, millions of transactions take place with just a few taps.
But the speed and convenience of digital payments have also created opportunities for cybercriminals. Fraudsters exploit trust, manipulate victims into authorising transactions, misuse compromised accounts and route stolen money through networks of bank accounts.
UPI fraud is not always a technical attack on the payment system. In many cases, criminals manipulate the user into completing a transaction themselves. Understanding these methods is essential for citizens, financial institutions and investigators.
What Is UPI Fraud?
UPI fraud refers to scams or unauthorised activities involving India’s real-time digital payment system. Criminals may trick victims into transferring money, obtain access to sensitive credentials, misuse compromised devices or exploit accounts controlled by other individuals.
Common forms include:
- Fake payment screenshots: Fraudsters show edited screenshots or fabricated payment confirmations to convince sellers that money has been transferred.
- Collect-request scams: Criminals send payment requests and persuade victims to approve them, sometimes claiming that approval is required to receive money.
- QR-code scams: Victims are persuaded to scan a QR code and complete a payment under the false impression that they are receiving money.
- Impersonation fraud: Scammers pose as bank representatives, customer-support agents, buyers, sellers or government officials.
- Phishing and malicious applications: Fake links or applications may be used to steal credentials, capture sensitive information or facilitate unauthorised access.
- Screen-sharing scams: Criminals convince victims to install remote-access or screen-sharing tools, potentially exposing financial information or enabling fraudulent activity.
- Mule-account networks: Money obtained through fraud is transferred into accounts used to receive, move or withdraw illicit proceeds.
The methods differ, but the objective is generally to obtain money, gain access to financial accounts or make the movement of stolen funds harder to trace.
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How Criminals Exploit UPI Users
UPI scams often begin with social engineering: manipulating a person into trusting a false identity or acting without checking the request.
A fraudster posing as a buyer on an online marketplace may claim to send money and share a fake payment screenshot. In another scenario, a scammer pretending to be a customer-service representative may claim that the victim must approve a collect request to receive a refund.
Criminals may also create urgency by claiming that an account will be blocked, a payment will fail or a refund will expire unless the victim acts immediately.
A crucial distinction is that receiving money through an ordinary UPI transaction does not require the recipient to enter a UPI PIN. A PIN is generally used to authorise a debit or other transaction requiring authentication. Users should never enter their PIN merely to receive a payment.
Fraudsters may also exploit weak digital hygiene, including reused passwords, unsafe app installations, exposed OTPs and careless sharing of screen content.
The Digital Evidence Behind a UPI Fraud
Although UPI transactions happen quickly, they can generate several categories of investigative evidence.
Transaction records: Transaction IDs, timestamps, amounts, payer and beneficiary details, and relevant bank records can help investigators reconstruct the movement of funds.
Bank and payment records: Beneficiary accounts, linked bank details and transaction histories may help establish where money was first received and how it subsequently moved.
Device evidence: With appropriate legal authority, investigators may examine relevant messages, call logs, suspicious applications, browser history and other artefacts associated with the incident.
Communication records: SMS messages, messaging-app conversations, emails, phone numbers and call details can help establish how the victim was approached and manipulated.
Merchant and platform records: Where applicable, marketplace listings, seller profiles, account information and platform records may help connect the fraud to an online interaction.
No single record necessarily identifies the offender. Investigators must correlate financial, telecom, device and platform evidence, while distinguishing between an account holder, a money mule and the person who organised the fraud.
How Police and Investigators Trace UPI Fraud
1. Reconstruct the transaction chain
Investigators begin by establishing the original transaction and identifying the receiving account or other relevant beneficiary details. They then examine subsequent transfers, withdrawals and related transactions to understand how the money moved.
2. Identify linked beneficiary accounts
Multiple complaints involving the same beneficiary accounts, phone numbers or transaction patterns may reveal connections between apparently separate incidents. Such links can help investigators identify broader fraud networks.
3. Examine digital communications
Messages, call logs, fake payment confirmations, phishing links and other preserved evidence may help reconstruct the scam’s timeline and identify the methods used to deceive the victim.
4. Coordinate with financial institutions
Prompt coordination with the victim’s bank, beneficiary bank and relevant payment service providers may help identify suspicious transactions and take appropriate action. Any freezing, restriction or disclosure of account information must follow applicable procedures and legal requirements.
5. Follow the money beyond the first account
Fraud proceeds may pass through multiple accounts before being withdrawn or transferred elsewhere. Investigators must follow the transaction trail rather than assume that the first beneficiary is necessarily the principal offender.
6. Preserve evidence for legal proceedings
Transaction records, complaint details, digital files and relevant communications should be documented and preserved appropriately. Investigators must maintain evidence integrity and follow applicable legal and forensic procedures.
What Ordinary People Should Do to Prevent UPI Fraud
A few simple precautions can significantly reduce the risk of payment fraud:
- Never share your UPI PIN or OTP. Banks and legitimate payment providers do not need you to disclose these credentials over a call.
- Check before approving requests. Read the payment screen carefully before entering your PIN.
- Remember the direction of payment. A collect request generally asks you to approve a payment; it is not proof that someone is sending you money.
- Verify payments independently. Check your bank or payment app’s transaction history instead of relying on screenshots or SMS messages shown by another person.
- Avoid suspicious links and applications. Do not install unknown APK files or remote-access applications at the request of strangers.
- Do not trust caller ID alone. Verify claims through official bank or service-provider channels.
- Report suspicious activity quickly. Contact your bank or payment provider immediately if a transaction appears unauthorised.
If you lose money to cyber fraud in India, call the national cybercrime helpline 1930 as soon as possible and submit a complaint through the official National Cyber Crime Reporting Portal. Keep the transaction ID, amount, time, beneficiary details and relevant communications available. Prompt reporting may help authorities act on the transaction trail, although recovery is not guaranteed.
What Financial Institutions and Organisations Can Do
Banks, payment providers and businesses can strengthen fraud prevention through transaction monitoring, suspicious-account detection, customer alerts and rapid escalation mechanisms.
Organisations should educate employees about impersonation, fake refunds, fraudulent payment requests and social-engineering techniques. Merchants should confirm payment receipt in their own banking or payment application before releasing goods or services.
Financial institutions must also balance fraud detection with customer privacy, due process and legitimate access to banking services.
The Future of UPI Fraud Investigation
As digital payment volumes grow, investigators can benefit from stronger information-sharing processes, improved analysis of linked transactions and faster coordination among banks, payment providers and law enforcement.
Data analytics can help identify recurring beneficiary accounts, suspicious transaction patterns and possible connections between complaints. However, automated alerts are investigative leads not proof of criminal activity. Human verification, corroborating evidence and lawful procedures remain essential.
Conclusion: Follow the Transaction, Find the Network
UPI fraud exploits the gap between the speed of digital payments and the time it takes people to verify what they are being asked to do. Criminals rely on urgency, impersonation and misplaced trust, while the money may move through several accounts before the victim realises what has happened.
For citizens, the strongest defence is to verify every payment request and never disclose sensitive credentials. For investigators, the priority is to preserve evidence, trace the financial trail and connect individual transactions to the people responsible.
In digital payment fraud, every transaction can be a lead—but only careful investigation can turn that lead into evidence.
Day 23 — UPI Fraud
31 Days | 31 Key Topics | October 2026
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