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SCAM ALERT! Different Types of Financial Scams in India! – Prof – Geeta Ashok

1st July 2024

The Reserve Bank of India (RBI) recorded bank frauds totaling more than 302.5 billion rupees, or INR 30,000 cr, in the fiscal year 2023. The current figure is still shocking, and citizens should exercise caution to protect their financial interests. This represents a reversal in the trend of rising bank frauds in India over the past ten years, both in terms of the total number of frauds and their monetary value.

Financial Scams in India

2024 has also seen a rise in sophisticated scams that prey on gullible people by taking use of new technologies in the financial sector in India. The financial sector has seen a wide range of fraudulent activities, from the widespread rise of UPI-related frauds to the crafty schemes luring victims with false investment returns. The danger landscape has expanded to include new elements such as part-time employment deceptions, courier scams that target young people, and scams involving QR codes.

Furthermore, the prevalence of malware-based cybercrimes and the ongoing difficulty presented by tech support scams emphasize the necessity of exercising extra caution when negotiating the complex world of financial transactions. Let us explore the most common financial scams of 2023 and 2024 to throw insight on the tactics, patterns, and outcomes that characterize the changing landscape of financial fraud in our nation.

UPI Scam Update

In India, the introduction of UPI transactions was a big turning point for digital payments. But scammers immediately adjusted, coming up with a variety of plans to take advantage of gullible customers. The Indian payment system is seriously threatened by UPI-related frauds, which use a variety of strategies to get away with their crimes, including masking collect requests as phony cash back offers and QR codes and spoofing Virtual Payment Address (VPAs) for disaster assistance and reimbursements.

When it comes to online fraud, offenders build deceptive websites that lure victims into buying stocks or cryptocurrency. Mass invitations to invest are sent out via Telegram and WhatsApp groups, tricking victims into thinking they are investing in cryptocurrency, equities, or legitimate enterprises.
According to the Ministry of Finance, the number of UPI fraud instances registered in the fiscal year 2022–2023 surpassed 95,000, a significant rise from the 84,000 cases reported in the previous year. In India, UPI transactions are linked to a startling 55% of all digital payment frauds.

According to research, the average ticket value for these scams is less than Rs 10,000 in 50% of cases. Furthermore, only 2% of scams include tickets worth more than INR 100,000, with 48% of them falling between $10,000 and $1,000,000 in value. 

All industries are dominated by identity-related fraud, especially account-related fraud. Account-related fraud, which includes both account creation and takeover, accounted for 65% of all frauds in the financial services sector in 2021. Fifty-four percent of all reported frauds in the e-commerce industry were related to accounts.

In 2023, the combined effect of several scams—such as email, bank, and UPI frauds—led to an incredible financial loss of more than INR 200 cr. Furthermore, just 2% to 8% of the lost money has been successfully recovered, indicating a poor recovery rate for embezzled funds.

Digital Banking and Credit Card Frauds

The prevalence of online banking and credit card fraud has increased along with the popularity of digital transactions. Fraudsters frequently use phishing attacks, identity theft, and fraudulent transactions with card credentials that have been stolen.

The banking system documented 13,530 instances of fraud in the 2023 fiscal year. Remarkably, the Reserve Bank of India (RBI) recorded the highest rate of digital fraud in the context of digital payments in May 2023.

Approximately 49%, or 6,659, of all reported fraud instances were classified as digital payment incidents involving cards or the internet. This demonstrates the significant influence and pervasiveness of digital fraud in the particular area of card and online transactions.

Bank Frauds’ Overview

A variety of dishonest practices, such as loan frauds, cheque frauds, document forgeries, and unauthorized transactions, are included in bank frauds and can result in large financial losses for both financial institutions and people.

The Reserve Bank of India (RBI) recorded bank frauds of more than 3,500 crore Indian rupees in 2023. Compared to the significant amount of more than 1.3 trillion rupees recorded in 2021, this represented a decrease.  The decline that has been noticed indicates a significant change in the pattern of these fraudulent actions.

A more comprehensive look at the problem shows that Indian banks discovered about 65,017 scams between June 1, 2014, and March 31, 2023, resulting in an astounding loss of Rs 4.69 lakh cr. The Reserve Bank of India released this data, which highlights the substantial and long-lasting impact.

QR Code Scam Alert

Particularly in Bengaluru, there has been an alarming increase in cybercrime instances involving QR codes. Regrettably, police data shows that QR code scams were responsible for a substantial 41% of the more than 50,000 cybercrime occurrences that were reported in Bengaluru, India’s silicon capital. This concerning figure highlights the increasing risk and consequences of fraud involving QR codes in the area.

The number of occurrences involving QR code fraud, deceptive links, and the improper use of debit/credit card information for illegal purchases increased between 2017 and May 31, 2023.

Between 2017 and May 31, 2023, there was a rise in cases involving QR code fraud, deceptive links, and the unapproved use of credit/debit card information for nefarious purposes. This period emphasizes how QR code scams are a persistent and changing type of cybercrime that negatively impacts people’s financial security and well-being.

Investment Scam Warning: Unrealistic Returns Ahead

The allure of investment frauds, which guarantee rapid returns, keeps people falling for their attractive offers. Fake investment products or imaginary companies are frequently involved in these schemes that take advantage of people’s desire for large profits.

Since the Covid-19 epidemic, frauds involving stocks, personal loans, cryptocurrency, and other investment opportunities have increased significantly, primarily targeting India’s working class.

A significant incident that occurred in July 2023 in Hyderabad involved a big INR 712 cr Chinese investment swindle that uncovered a fraudulent operation that preyed on gullible investors. This operation, which was run by Chinese operators with headquarters in Dubai, is believed to have stolen an astonishing INR 712 crore from people all throughout the nation. This episode should serve as a clear lesson to be skeptical and cautious when considering investment offers that offer astronomical profits.

Part-time Job Scam Alert

Scammers online are using social media feeds and direct messaging to entice people with alluring claims of simple part-time work and more money. These con artists take advantage of people’s trust by convincingly convincing victims to spend money, only to have them lose a big amount of money after making a sizable commitment.

As of April 30, 2023, the Delhi police revealed that they had received 467 complaints about online scammers offering part-time jobs. This is a concerning rise from the 32 complaints that they had received in 2020. The increase in complaints highlights the growing frequency of con games that prey on people looking for part-time work.

Due to rising inflation and a worsening jobless situation, online scammers preying on unsuspecting job seekers are becoming more prevalent. India now has a higher unemployment rate than the rest of the world, at over 8%.

Courier Scam Advisory

A new courier scam is a worrying trend that is starting to surface. Cybercriminals target young people in particular, which is quite upsetting and distressing. These con artists approach potential victims by saying that courier packages purportedly carrying drugs or other illicit goods are being shipped overseas under their identities.

In 2023, the Bengaluru Police documented 163 cases of these courier frauds, of which 48 were centered in the South-East division alone. Over INR 5 cr has been lost financially as a result of these scams combined. Usually, a caller posing as a FedEx “customer service executive” starts the hoax call.

This dishonest strategy highlights the significance of awareness and caution by preying on people’s worries and anxieties. Residents are cautioned, especially the youth

This dishonest strategy preys on people’s worries and anxieties and, therefore, highlights the significance of awareness and caution. It is recommended that residents—especially those in their youth—verify any unexpected correspondence from courier services and abstain from divulging personal information or doing any financial transactions until all details have been thoroughly verified.

Malware Warning: Protecting Against Digital Threats

Fraudsters are using more and more clever strategies to trick naïve customers into installing malware, screen mirroring, or remote access software. These strategies include using emails, cash back links, and phony customer service. These harmful apps undermine the Smartphone after they are loaded, making financial information accessible to unwanted parties.

Fraudsters then take use of this access to carry out transactions and deceive customers by withdrawing money from their cards or accounts.

An analytical analysis indicates that economic crimes account for over 57% of all fraud incidents in India, which is a worrisome influence on digital platforms. Moreover, over 26% of Indian businesses have lost more than $1 million as a result of these cybercrimes. This emphasizes how urgently the digital environment needs stronger cyber security protections.


Scams involving tech support have grown very common, with seven out of ten customers have fallen for them. Protecting sensitive data, including financial and personal information, from these ever-changing online threats requires extreme caution and vigilance. People are advised to use caution when responding to unexpected communications or requests for installations, and to confirm the legitimacy of sources in order to reduce the likelihood of becoming victims of these harmful operations.

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