What Is Online Payments Fraud?

10 January, 2024

Payment fraud happens when a person or an entity gains unauthorised access to another individual's or entity's payment information, such as a Credit Card or Debit Card. Thereafter your information is used to execute transactions without your knowledge.

These transactions are intended to gain financial benefit at your expense. Such fraud is conducted by illegally acquiring funds, goods or services by misusing and manipulating your accounts, personal information or payment systems. This fraud can take place in various shapes and forms.

In this write-up, we will tell you the ways to prevent payment fraud, besides providing insights into the common types of such fraud.

How to safeguard yourself from payment fraud?

You can dodge the risk of falling prey to payment fraud by being mindful of sharing your personal information. Below are some points to remember in your day-to-day financial activities.

1. Please be careful of sharing your sensitive information and share it only with the right people; you should not share information such as account passwords, PINs, and one-time passwords (OTPs) with anyone.
   
   

2. Monitor your account activities regularly to identify any suspicious activities and suspend your account if it has been compromised.
   
   

3. Refrain from entertaining calls from unreliable sources claiming to be bank personnel and asking for your personal information.
   
   

4. Keep your devices secure, use a firewall to protect them from malware and use strong passwords to prevent compromise of your information through these devices.
   
   

5. Do not use the same password across different platforms.
   
   

6. Encrypt outgoing emails before sharing sensitive information to ensure that only the intended receiver can view the information and not alter or forward it to anyone else.
   
   

7. Stay aware of the scams around you and the ways and technologies that could help you mitigate those risks. HDFC Bank's Vigil Aunty is your go-to source for not only staying updated with the recent scams but also educating yourself.
   
   

You must also check and start using HDFC Bank PayZapp, a fast and secure digital wallet, that will assist you in safely conducting your day-to-day transactions. This wallet is fast and allows you to send money or pay for shopping transactions with a click. It is convenient and facilitates you to make transactions anytime and anywhere. It is secure as your card details are not stored on your phone or shared.

Types of payment frauds

Payment fraud can take place in various modes. The attacker can target your payment modes, such as misusing your Debit Card or Credit Card, conducting a fake UPI payment or breaking into your bank account. Below is a list of payment frauds you need to be aware of:

1. Credit Card fraud - This type of fraud involves an individual gaining access to your Credit Card information. The individual will use this information to conduct unauthorised transactions without your knowledge and gain financial benefits. They might use your Credit Card details to use your funds electronically, such as payments on e-commerce websites, among other uses. They might also use this information to clone your card physically.
   
   
2. Debit Card fraud - Similar to Credit Card fraud, this involves unauthorised use of your Debit Card details to conduct transactions or withdrawals. The Debit Card details are used to perform unauthorised transactions or to set up a payment system such as Google Pay or Unified Payment Interface (UPI), etc.
   
   
3. Cheque fraud - An attacker can steal your cheque from the mailbox and manipulate the details to steal the funds or counterfeit the cheque. This manipulation can cause individuals or entities to transfer funds into fraudulent accounts.
   
   
4. QR code fraud - Cybercriminals can easily target you using a QR code. They can manipulate a QR code kept on the payment counter of an outlet. They counterfeit this QR code to get the funds transferred to their account rather than the rightful receiver. They usually set up the QR code with malware, which will enter your device as soon as you scan it and steal your personal information.
   
   Scammers also manipulate the QR codes for event registrations or website access, leading you to malicious websites that may steal your personal information.
   
   
5. Online payment fraud - Cybercriminals target online payment platforms, e-commerce websites and other online marketplaces to steal users' payment information. They use this information to conduct unauthorised transactions and gain financial benefits.
   
   
6. ATM skimming - Attackers deploy ATMs with devices that can capture your card details, including the PINs. They exploit unsuspecting users to steal payment information and use it for their gains.
   
   
7. Account takeover fraud - An account takeover involves cybercriminals gaining unauthorised access to your bank account. This is done using stolen credentials, hacking, phishing or other modes of stealing sensitive information. They leverage their access to make unauthorised transactions or withdraw funds.
   
   
8. UPI fraud - This type of fraud involves transferring money to your UPI account. After transferring the money, they immediately call you and claim that the transfer was a mistake and you should return their money.
   
   To complete the return, the scammer will share a malicious UPI link with you. With a single click, this link will grant the cybercriminal access to your device. The attacker will use this access to break into your banking apps or wallets and steal your money.
   
   
   

Another side of UPI fraud is a scammer posing as an online buyer. The attacker can pose as a potential buyer for your online advertisements and raise a payment request claiming it to be an incoming request from a merchant account. They will trick you into entering your UPI PIN and transfer your funds to their accounts.

It is important to stay updated regarding payment fraud and implement necessary measures to avoid becoming a victim.

Now that you understand the meaning of payment fraud and how scammers can attack you in different ways, we advise you to be more cautious and conduct your daily transactions through secure payment methods. You must be vigilant of potential scam phone calls, messages or fake websites crossing your way.


*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.