QR Code Frauds: How Digital Payments Frauds Pose a New Risk for Digital Shoppers

The rise of eCommerce companies has changed the way we transact today. There are a number of benefits of using digital payments instead of cash, but there are some dangers as well. The biggest danger that a person faces while making digital payments is the risk of digital payments fraud.

Statistics regarding online fraud indicate that digital payments frauds are on the rise and the pandemic has further fueled the demand for online payment mechanisms.

In this post, we will take a look at the different kinds of digital payments fraud with a special focus on detecting and preventing QR code frauds.

Different Types of Digital Payments Frauds

Identity Theft

One of the most types of digital fraud is identity theft. There is a reason why this crime is most common, the risk to reward ratio is very high for criminals because if they are successful then they can run away with your life savings. Identity theft has been taking place since time immemorial but in the new digital age, it has taken more sophisticated forms.

Criminals use fake websites, phishing attacks, and sophisticated tools to steal a customer’s information including information about finances/payments.

QR Code Fraud

Increasingly QR codes are being used by cybercriminals to commit large-scale QR code frauds and in many cases, the victim is tricked into scanning a QR code which in turn initiates the payment and the victim ends up losing his/her hard-earned money. We will go into the details of QR code frauds in the latter part of this post.

Email Getting Compromised

Fraudsters and criminals use impersonation and social engineering techniques to compromise a company’s email. Generally, an unsuspecting employee is lured into divulging secret information and remitting money to the account of the impersonator. Such kinds of digital payments fraud are not easy to detect as the money is routed with the understanding that it is going to a legitimate source.

Many times bills are changed and manipulated to reflect the bank details of the fraudster and money is demanded from the company by impersonating a legitimate supplier or business partner.

Password Hacking

These days criminals use a variety of strategies and techniques to gain access to the usernames and passwords of users. Around the world, companies have lost millions of dollars due to passwords getting hacked. Using two-factor authentication is one way to prevent password hacking and changing passwords periodically is also a very good precaution.

While using internet banking users should ensure that the website or app where they are making a payment is legitimate or they would be at the risk of providing personal information to hackers.

Even though we discussed a little bit about QR code frauds earlier, let’s take a more detailed look into this specific fraud and we will also talk about some measures that you can take to avoid QR code frauds.

QR Code Frauds

Things like social distancing norms and the use of contact-less delivery or procurement of everything have resulted in the increased use of QR codes.

However, the hackers are using everything in their power to make you part away from your money. Now criminals send text messages like ‘you have won a $5 million lottery’ and other such messages to make you scan a QR code.

When the users scan the QR code and enter their UPI code to allegedly receive the prize amount, they end up becoming a victim of QR Code Fraud.

If a person uses unsecured wifi then too they could become a victim of a QR code phishing scam. Due to malicious software, you will be redirected to another compromised website and you might lose sensitive information even if you are on the site for even a few minutes.

Now that we know all about digital payments fraud and QR code fraud, let’s take a quick look at how to prevent it from happening.

How to avoid QR Code Frauds?

• You should always pay very close attention when using QR codes to make payments.
• You should always make payments to trustworthy sources and you should not click on any link or scan a QR code without being 100% certain.
• Ensure that you have up-to-date security software installed on all your devices and should be wary of opening any links or QR codes that might look like it was shortened to avoid falling for a QR Code Fraud.
• If for some reason you believe that your log-in credentials have been compromised then you should contact your bank immediately and block your account. In such a scenario, monitor the activity and consult with the authorities to ensure that your bank account has not been compromised.

As you can see there is a huge rise in QR code frauds and other digital payments fraud lately. Even though QR codes are a convenient and secure payment mechanism, you will always have to be on your guard to avoid any financial loss.