UPI frauds contribute to 15.3% rise in cybercrime complaints between Q1 and Q2 of 2022

Representative image.

The unified payments interface (UPI) has been a stunning success. But the flip side of this is the rising instances of people being cheated when conducting online transactions. According to data from the Ministry of Home Affairs, UPI frauds contributed significantly to a 15.3% increase in the overall number of complaints reported on the National Cybercrime Reporting Portal (NCRP) between the first and second quarters of 2022.

While the overall number of registered complaints in the first quarter of 2022 was 206,198, it grew to 237,658 in the second quarter, representing a 15.3 percent rise.

Looking specifically at 'UPI fraud complaints,' a cyber crime category under NCRP, the number jumped from 62,350 in Q1 2022 to 84,145 in Q2 2022.

This equates to a 34 percent rise when compared to other NCRP cyber crime categories such as debit/credit card fraud, internet banking-related fraud, and others.

These overall figures are consistent with the increasing number of cybercrime complaints registered on the NCRP portal since 2021.

This increase can be attributed to the growth of digital payment systems since the outbreak of the Covid-19 pandemic, which has allowed small businesses to enter the ecosystem. According to an RBI report, UPI payments rose by more than 1,200 percent in the six months ending in September.

Financial fraud most prevalent

The report by MHA, said, "Online financial fraud, a cyber crime category under NCRP is the most prevalent among others, as 67.9 per cent of the total reported cyber crime were 'online financial frauds'.

However, actual figures for this particular category were not provided in the report.

Debit/credit card/sim swap fraud, which falls under financial fraud, also increased from Q1 to Q2 of 2022. While the figures in Q1 were 24,270, they were 26,793 in Q2.

However, internet banking complaints fell in the second quarter of 2022. While the figure in the first quarter of 2022 was 20,443, it fell to 19,267 in the second quarter.

Rising transactions through UPI

In October, Unified Payments Interface (UPI) transactions reached a record high of Rs 12,11 lakh crore, six months after surpassing Rs 10 lakh crore in May.

This figure is expected to increase, with RBI’s Payment Vision 2025 estimating that UPI will register an average annualised growth of 50 percent.

This increased adoption of UPI will inadvertently also play its part in contributing to the rise in UPI frauds.

Last year, the National Payments Corporation of India (NPCI) took cognisance of this and launched 'UPI-Help' on the Bharat Interface for Money (BHIM) UPI to provide a simple grievance resolution mechanism.

Under the 'raise a complaint' option in the BHIM UPI application, one can view their transaction history. The user can then select the transaction for which a complaint must be filed. They can click "raise concern," describe the problem in an online complaint, and submit it.

Earlier this year, NPCI also launched the Safety Shield campaign to assist users with online payments via UPI.

Google Pay, Paytm, PhonePe, and Amazon Pay, as well as over 20 commercial banks, including State Bank of India (SBI), HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Canara Bank, and Union Bank of India, participated in the campaign, according to Moneylife.