Worried About UPI Scams? Govt’s New Fraud Prevention Tool Is Here – Know How It Works

The Department of Telecommunications ( DoT ) launched the Financial Fraud Risk Indicator ( FRI ) on Wednesday, a tool designed to alert banks and UPI apps like PhonePe, Paytm, and Google Pay about mobile numbers with a high risk of fraud , aiming to strengthen cyber fraud prevention across India's financial and telecom ecosystems by identifying risky numbers and enabling quicker action against potential scams. The FRI system uses data from multiple sources to label mobile numbers as having a Medium, High, or Very High risk of being linked to financial scams, allowing financial institutions to double-check or block transactions made to flagged numbers.

The Department of Telecommunications (DoT) announced the rollout of the ‘Financial Fraud Risk Indicator (FRI)’, a technology-driven intelligence-sharing tool to strengthen the cyber fraud prevention framework across India's financial and telecom ecosystems.

The FRI system categorizes mobile numbers based on their risk level. Numbers are labeled as having a Medium, High, or Very High risk of being associated with financial scams.

Data for this assessment is gathered from various sources. These sources include the Indian Cybercrime Coordination Centre’s National Cybercrime Reporting Portal, DoT’s Chakshu platform, and reports from banks and financial institutions.

The FRI tool is designed to address the issue of fraudulent mobile numbers used for short periods. It enables quicker identification of high-risk numbers before full verification procedures are completed.

The tool is part of the DoT’s Digital Intelligence Platform (DIP). It shares critical information with banks, UPI apps, and financial companies. The goal is to spot risky mobile numbers involved in potential fraud and curb rising incidents of cyber fraud.

When a digital payment is attempted to a flagged number, banks and UPI platforms can utilize the FRI information. This allows them to double-check or block the transaction.

PhonePe is already using the FRI. It blocks payments to numbers marked as Very High risk.

PhonePe also displays a warning on the user’s screen through its PhonePe Protect feature. PhonePe’s data indicates the tool is highly accurate in spotting fraudulent numbers.

For numbers with Medium risk, PhonePe plans to show warnings to users before allowing payments to proceed.

Other major UPI platforms are also integrating DIP alerts. These include Paytm and Google Pay, which together handle over 90% of UPI transactions in India, according to the Ministry of Communications.

One of the leading UPI platforms delays such transactions or asks users to confirm payments to risky numbers.

The DoT also shares a “Mobile Number Revocation List”. This list contains details of numbers disconnected for reasons like cybercrime or failing verification checks, which are often tied to financial scams.

“With UPI being the most preferred payment method across India, this intervention could save millions of citizens from falling prey to cyber fraud. The FRI allows for swift, targeted, and collaborative action against suspected frauds in both telecom and financial domains,” the release said.