51% of UPI fraud victims never filed a complaint: LocalCircles survey

Hyderabad: The digital payment transactions, including those through Unified Payment Interface (UPI), have increased consistently over the last five financial years. However, digital payment fraud has increased rapidly.

As per a recent LocalCircles survey, 1 in 5 families who know someone using UPI said they experienced UPI fraud once or more in the last three years. As much as 51 per cent of them did not file any complaint, anywhere, the survey said.

How secure is UPI?

The Reserve Bank of India’s (RBI) Annual Report for FY2024-25 indicates a significant rise in digital payment frauds, which encompass UPI transactions. While the report doesn’t provide a specific breakdown for UPI frauds, it states that digital payment frauds, numbering 13,516, accounted for 56.5 per cent of all reported banking frauds.

Totalling Rs 520 crore, most of the digital frauds were through card and internet-based transactions, which include UPI.

Rapid rise in use of UPI can provide opportunities for fraud

In FY2024-25, UPI witnessed 185.8 billion transactions, a 41.7 per cent increase from the previous year.

In terms of market share, UPI accounted for 83.4 per cent of the total digital payment volume, the survey said. The RBI’s report highlights the need for continued vigilance, robust security measures and public awareness to safeguard users against digital payment frauds.

What are the government safeguards against fraud?

The RBI has implemented a Central Payment Fraud Information Registry (CPFIR), a system to track and report payment fraud using AI and machine learning models. The security tools include device binding, PIN-based two-factor authentication and daily transaction limits.

For consumer security, the National Payments Corporation of India (NPCI) has set the daily limit for UPI transactions at Rs 1 lakh.

However, the limit can vary depending on the bank, app and type of transaction. For instance, the limit is Rs 2 lakh for Capital markets, insurance, collections and foreign inward remittances. The limit is Rs 5 lakh for tax payments, payments to educational institutions and hospitals, payments to IPO, and RBI retail direct schemes payments. UPI Lite and UPI 123Pay options cater to different needs. Users are also restricted to a maximum of 20 UPI transactions in a single day.

The government has also launched the National Cybercrime Reporting Portal (cybercrime.gov.in) and helpline 1930 for users to flag suspicious activities. Efforts are also being made to educate and create awareness among the public about cybercrimes.

1 in 5 families know someone who experienced UPI fraud

The survey first asked people using UPI for digital payments: “Did you or your family members experience UPI fraud in the last 3 years?”

Out of 16,312 who responded to the question, 20 per cent stated ‘yes’; they or their family members have experienced fraud on UPI in the last 3 years, while 78 per cent of respondents stated ‘no’, and 2 per cent of respondents did not give a clear answer.

To sum up, 1 in 5 families surveyed have someone using UPI confirmed experiencing UPI fraud once or more in the last three years.

40% clicked on links which accessed their accounts; 50% say someone hacked their UPI pin

The survey next asked UPI users who experienced fraud, “What are all the different types of UPI frauds you or your family members have experienced in the last 3 years?”

Some among the 4,894 who responded to the question indicated more than one option; 50 per cent indicated ‘someone hacked our UPI settings/ PIN and conducted transactions’; 40 per cent stated ‘clicked on a UPI payment link from someone which debited our account instead of crediting it’; 20 per cent also stated ‘clicked on a QR code from someone which debited our account instead of crediting it’; 20 per cent stated ‘revealed my OTP or UPI pin to someone who posed as a bank representative/official and our account was debited’; 50 per cent stated ‘UPI fraud happened in ways other than the ones listed above’ and 10 per cent of respondents did not give a clear answer.

To sum up, among those UPI users who experienced fraud, 40 per cent surveyed confirm inadvertently clicking on a payment link to accept funds and instead had their account debited; 50 per cent say someone hacked their UPI pin and conducted transactions. Many of the users experienced fraud in multiple ways.

Over 1 in 2 users who experienced a UPI fraud did not file any complaint

For varied reasons, consumers don’t complain about products and services that violate their rights, such as seeking some redressal by filing complaints with the police, on government portals, the court, etc.

When the survey asked, “When you or your family members experienced UPI fraud in the last 3 years, whom did you file a complaint with?”, some among the 15,862 who responded to the question indicated more than one option.

As much as 38 per cent of respondents indicated that they filed a complaint on the ‘cyber crime portal’; 25 per cent stated ‘UPI platform that I use’; 13 per cent stated ‘bank that I use’; 13 per cent stated ‘NPCI’; and 13 per cent stated ‘RBI’.

However, 51 per cent of respondents stated that they ‘did not file any official complaint’. In essence, over 1 in 2 of those users who experienced a UPI fraud in the last 3 years did not file any complaint.

Going by the data, it is important, the Government, RBI, NPCI, the banks and the platforms must enable a system where reporting UPI fraud is one click away with a time-bound response and action.

In addition, all telecom and OTT service providers must be mandated to identify likely UPI fraud scenarios with links shared over SMS, WhatsApp, etc., with the use of Artificial Intelligence and flag risk to the users.

Extent of survey

The LocalCircles survey received over 32,000 responses from UPI users located in 365 districts of India; 67 per cent of respondents were men while 33 per cent respondents were women; 42 per cent respondents were from tier 1, 27 per cent from tier 2 and 31 per cent respondents were from tier 3 and 4 districts. The survey was conducted between March and June 2025.