Digital Arrest to QR Code Swapping: India’s Top 5 Online Payment Scams and How to Stay Safe

Indian consumers are facing a surge in sophisticated online payment scams, including QR code swapping at petrol pumps and terrifying “digital arrests” using deepfake technology. These frauds have caused significant financial losses nationwide, exploiting the rapid growth of UPI and digital wallets. Authorities and financial institutions are urging the public to learn how these scams operate and adopt critical safety measures to protect their money.

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1. The QR Code Replacement Scam

This simple yet effective scam targets both merchants and customers. Fraudsters replace the legitimate QR code at a merchant’s location, such as a petrol pump or retail shop, with their own fraudulent code.

• How it Works: Criminals visit establishments, often at night, and stick their fake QR code sticker over the genuine one. When a customer scans and pays, the money is directly transferred to the scammer’s account. The customer and merchant only realize the fraud later.
• Recent Cases: Police in Uttar Pradesh, Madhya Pradesh, and other states have reported multiple cases and arrests related to interstate gangs specializing in this scam, with individual losses running into lakhs of rupees.

2. The ‘Digital Arrest’ Scam

This is a psychologically terrifying scam that uses intimidation and technology to extort money.

• How it Works: Scammers, posing as law enforcement or customs officials, call victims claiming illegal items like drugs or passports were found in their name. They then use AI-generated deepfake videos of uniformed officers to make the threat seem real. The victim is put under “digital arrest,” forced to stay on a video call for hours to prevent them from verifying the story, and coerced into paying large sums, often in cryptocurrency.
• Official Warning: Prime Minister Narendra Modi has publicly highlighted the severity of this scam, advising citizens to be vigilant.

3. Fake Cashback and Reward Scams

Promising lucrative rewards, these scams trick users into revealing sensitive information or making payments.

• How it Works: Users receive messages, emails, or see pop-up ads claiming they have won a massive cashback or voucher (e.g., ₹12,999). They are asked to click a link and enter their UPI PIN or bank details to “claim” the reward. Instead, the link is a phishing site, and entering the PIN authorizes a real payment from their account to the scammer.
• The Hook: The scammer keeps the victim on the call, confusing them with technical jargon until the transaction is complete. They rely on the victim’s desire for a quick financial gain.

4. Fake Payment Screenshot Fraud

This scam primarily targets merchants and individual sellers on platforms like OLX.

• How it Works: A buyer pretends to make a UPI payment and sends a fake, but very convincing, screenshot of a payment confirmation. The screenshot is generated using readily available fake UPI apps designed to look like PhonePe, GPay, or Paytm. Without verifying the transaction in their own bank app or waiting for a soundbox confirmation, the merchant releases the product, only to discover the payment never arrived.

5. Fake Customer Care Frauds

Scammers create fake websites and phone numbers for popular digital payment apps and list them in search engine results.

• How it Works: When users search for customer care numbers to resolve an issue, they contact these fake numbers. The person on the call, pretending to be an executive, asks for remote access to their phone or demands they share an OTP or UPI PIN to “resolve” the issue. This gives the scammer complete control to drain the victim’s bank account.

How to Stay Safe: Essential Protective Measures

Protecting yourself requires vigilance and following basic digital hygiene practices.

For All Users

• Never Share Your UPI PIN: No legitimate customer care agent or reward scheme will ever ask for your UPI PIN. This is the key to your money.
• Verify Transactions Yourself: Do not trust payment screenshots. Always check your bank account or UPI app for a confirmed transaction before considering a payment complete.
• Beware of Unsolicited Offers: Be extremely skeptical of calls, messages, or pop-ups offering huge cashbacks or prizes. If it seems too good to be true, it is.
• Use Official Channels Only: Only use customer care details found within the official app or on the company’s verified website.

For Merchants

• Use a Soundbox: A UPI soundbox provides an audible confirmation of a payment, making it much harder for fake screenshot scams to succeed.
• Secure Your QR Code: Laminate your QR code or place it behind a counter where it cannot be easily tampered with. Check it regularly.
• Train Your Staff: Ensure all employees know to verify payments through official means and not to rely solely on customer screenshots.

Government and Regulatory Action

Authorities are taking steps to combat this rise in digital fraud.

• The Reserve Bank of India (RBI) is setting up a Digital Payments Intelligence Platform to network various systems and preempt frauds.
• The National Payments Corporation of India (NPCI) and the RBI are running public awareness campaigns like ‘BE(A)WARE’ to educate users about common scam tactics.
• Law enforcement agencies are increasingly cracking down on interstate gangs involved in QR code and digital arrest scams.

While digital payments offer immense convenience, they also require users to be informed and cautious. By understanding the tactics used by scammers and adopting these simple safety habits, Indians can continue to enjoy the benefits of online transactions without falling victim to fraud.