UPI Payment Scam Alert: Cybercriminals Use Students to Launder Black Money – Here's How to Stay Safe

A new and alarming type of UPI fraud is on the rise in India, and it’s more deceptive than ever. This time, students are being unknowingly used to launder black money—and the trick is so subtle that anyone can fall into the trap. Cybercrime experts and enforcement agencies are raising red flags as this scam spreads rapidly, especially in big cities where digital transactions have become routine.

Here’s a deep dive into how this UPI-based money laundering scam works, why students are targeted, and what you can do to avoid becoming a victim.

What Is This New UPI Scam?

This emerging fraud tactic uses a simple but dangerous ploy. A person—usually posing as a student—approaches someone with a request that sounds harmless:

“Sir, I’m short on balance in my bank account. I have ₹1,000 in cash. Can you please transfer ₹1,000 to my account through UPI in exchange?”

Out of sympathy and the assumption that it’s a minor act of help, many agree. They accept the cash and make the UPI transfer. But what they don’t realize is that this innocent favor may turn them into an accidental accomplice in a money laundering operation.

The Real Danger Behind This Trick

Unknown to the person making the transfer, the cash they accepted could be proceeds of illegal activity. Once they initiate the UPI transaction from their own account, it cleans the black money, effectively laundering it through a legitimate bank channel.

If the transaction is later flagged in a police or Enforcement Directorate (ED) investigation linked to cybercrime or financial fraud, the trail leads back to the individual who made the UPI payment. Even if the action was unintentional, their name gets involved in the case. This can result in frozen bank accounts, legal troubles, or prolonged investigations.

Real-Life Case: Innocent Student Caught in the Trap

Take the recent case of Pradeep, a student from Delhi’s Gandhi Vihar. On May 30, he exchanged ₹1,000 in cash for a UPI transfer at a local shop. Days later, his bank account was frozen without any prior notice.

When he contacted the bank, he was informed that his account was flagged for suspicious activity and linked to a cyber fraud investigation initiated by the Birbhum Cyber Crime Police Station in West Bengal. Shocked and confused, Pradeep had to write a formal explanation to the authorities to clear his name.

This incident highlights how easily one can get entangled in legal troubles for what seemed like a simple act of kindness.

Why Are Students Targeted?

Students are commonly used in these scams because they appear innocent and trustworthy. Most people won’t suspect a young college-goer or school student to be involved in fraud. That’s what makes this scam so effective—and dangerous.

According to cybercrime officials, this tactic is spreading quickly in metro cities like Delhi, Mumbai, and Bengaluru. In fast-paced urban life, people are more likely to make quick decisions—sometimes without thinking twice.

ED Issues Warning: Don’t Trust Strangers with UPI Transfers

The Enforcement Directorate (ED) and cybercrime experts have issued a public advisory warning citizens to:

• Never accept cash from strangers in exchange for UPI transfers

• Avoid sharing bank account details or UPI IDs with unknown individuals

• Always verify the reason and legitimacy of a transaction before proceeding

• Report any suspicious activity immediately to the authorities

• Regularly monitor your bank account and UPI transactions

Even small transactions can be used for serious financial crimes. It is better to be cautious than to fall into a legal mess unknowingly.

How to Stay Safe from UPI Fraud

Here are some essential tips to protect yourself:

✅ Don’t trust strangers, even if they appear polite or in need
✅ Never accept cash in exchange for online transfers
✅ Verify bank details and transaction purposes before sending money
✅ Monitor your bank statements regularly for unknown activities
✅ Report suspicious behavior to your bank or the cybercrime helpline

Final Thoughts

This new form of UPI fraud is a clever manipulation of trust and technology. While digital payments have made life easier, they also open doors for misuse. It’s crucial to stay alert, stay informed, and never make UPI transfers on someone else’s behalf unless you're absolutely certain of the source and purpose.

In this digital age, awareness is your best defense.