Avoiding Financial Fraud And QR Code Scams This Festive Season
Experts warn scams could increase amid growing digital payments, With 77.5 per cent of cybercrimes linked to QR codes and transactions
A recent report from the Reserve Bank of India (RBI) revealed that fraud related to digital payments has surged over fivefold, with Rs 14.57 billion syphoned off by scammers. One of the most alarming trends is the rise of ‘Quishing,’ a technique that involves fake QR codes leading people to fraudulent websites designed to steal their bank account details. This newer method has become a key way for scammers to digitally syphon money from unsuspecting citizens.
With the festive season coming up, India prepares for a formidable increase in financial frauds including the QR code scams, phishing and online payment scams. This is an indication that the consumers are vulnerable during this period due to the increased uptake of digital payments, and the scammers always come up with new tricks.
Growing Threat Of QR Code Scams
“The festive season brings a flurry of shopping sales across platforms—whether it's quick commerce, e-commerce, or D2C platforms. However, what's cracking the transparency and customer trust are the scams,” said Amit Relan, Co-Founder and CEO, mFilterIt, pointing to the rise of QR code scams that are undermining trust in India’s booming digital transaction ecosystem. He further explained that scammers are using QR codes to trick people into making payments to their accounts or spreading malicious software through these codes.
Relan advised, “People need to be vigilant when scanning QR codes from any untrusted source or making a payment. Scammers are using QR code scanning to steal money and identities or to spread malicious files. Avoid scanning codes from unknown or suspicious sources.” He emphasised that consumers should double-check the URLs after scanning a code, to ensure that they’re legitimate and match the expected destination before entering payment details.
The Future Crime Research Foundation (FCRF) reveals that QR codes, one-time passwords (OTPs), and credit/debit card transactions are responsible for nearly 77.5 per cent of cyber-crimes in India. Relan warned that the festive season provides ample opportunities for fraudsters to send out deceptive QR codes, misrepresenting well-known brands to scam people during peak shopping times.
Increased Risks In Ecommerce
“With India’s ecommerce market projected to hit USD 1 trillion by 2030, this rapid growth also brings heightened risks of online fraud, especially during the festive season,” noted Dhiren V. Dedhia, Head of Enterprise Solutions, CrossFraud. He highlighted that as digital transactions surge, fraudsters often resort to tactics like fake delivery notifications and fraudulent shopping sites. Dedhia stressed the importance of adopting strong security measures to protect consumers during this high-risk period.
“Be aware of fake delivery notifications, fraudulent shopping sites, and sellers offering too-good-to-be-true deals. Safeguard your financial accounts by using unique passwords, particularly for your banking and financial profiles, and never share your login details with anyone. Shop only on trusted websites, and always verify that you are on a legitimate site,” he advised. Dedhia also recommended setting up email or text alerts with banks or credit card providers to track transactions and quickly detect any suspicious activity.
“With around 57 per cent of fraud cases in the country linked to social media, ecommerce, enterprise, and fintech platforms, the need for stronger security measures has never been more urgent,” Dedhia added.
Surge In Digital Payments
“During the festivals, there is a spurt in online shopping and digital payments, which unfortunately also results in an increase in financial frauds,” observed Shikhar Aggarwal, Chairman of BLS E-Services. Aggarwal warned that the festive season is particularly risky as scammers take advantage of the high volume of digital transactions.
He said, “Be wary of scanning unknown QR codes or clicking suspicious links offering unbelievable discounts or festive deals. Always check the authenticity of the website and payment platforms before you fill in your personal or financial details. Use secured methods of payments and enable multi-factor authentication on your accounts. Above all, monitor your bank statements and report any suspicious activity without delay.”
Aggarwal stressed that awareness and caution are the best weapons consumers can use to protect themselves from fraud.
Additionally, complaints related to Unified Payments Interface (UPI) frauds have skyrocketed, with cases increasing from 15,000 in 2022 to over 30,000 in 2023. Shockingly, around half of these complaints are linked to QR code scams, further demonstrating the pressing need for consumer vigilance.
Cities Most Affected
Data from Quick Heal Technologies also revealed that large metropolitan cities such as Kolkata, Mumbai, Pune, Bangalore and New Delhi are the most exposed. In the second quarter of 2023, Kolkata experienced over 7.08 million online threats, closely followed by Mumbai with 7.00 million. These metropolitan areas that witness a high number of virtual transactions on the internet are the prime targets of these scammers during peak shopping periods like the festive season.
With increase in digital payments more complex fraud are coming into practice but by being aware and embracing safer modes of payments one is safe from becoming a fraud victim. Measures such as checking the validity of QR codes, using secure ways of making payments online, and closely monitoring the account activities will help in safeguarding the consumer during this period.
