Aadhaar Enabled Payment System (AEPS) has revolutionized digital (How to Avoid Fraud in AEPS Service) transactions in India, offering a convenient, cashless way to transfer money, check balances, and withdraw cash using just an Aadhaar number and biometric authentication. However, as AEPS grows in popularity, so do fraudulent activities targeting unsuspecting users.
Fraudsters use various tactics—from phishing scams to fake merchant IDs—to exploit vulnerabilities in the system. Both customers and merchants must stay vigilant to avoid fraud in AEPS service. This guide explores practical security measures, real-world examples, and expert-backed tips to safeguard your transactions.
Understanding AEPS Fraud: Common Scams to Watch For
Before diving into prevention, it’s crucial to recognize how fraudsters operate. Here are the most common AEPS frauds:
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Fake Merchant Scams
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Fraudsters pose as AEPS agents and trick users into entering their Aadhaar and biometric details, then drain their accounts.
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Example: A “bank representative” asks for fingerprint verification to “update records” but instead initiates unauthorized transactions.
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Phishing & Vishing Attacks
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Scammers call or message users pretending to be from banks, asking for Aadhaar or OTP details.
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Example: A text claiming, “Your AEPS service is blocked; click here to reactivate,” leads to a fake website stealing credentials.
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Biometric Spoofing
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Criminals use silicone fingerprints or high-resolution photos to bypass biometric authentication.
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Example: Stolen fingerprint data is used to withdraw money without the victim’s knowledge.
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QR Code Manipulation
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Fraudsters replace legitimate merchant QR codes with their own, redirecting payments.
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Transaction Reversals & Chargeback Fraud
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Merchants may falsely claim a transaction failed, forcing a refund while keeping the goods/services.
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How Customers Can Avoid Fraud in AEPS Service
1. Never Share Aadhaar or Biometric Data Unnecessarily
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Only provide Aadhaar and fingerprint details at authorized AEPS outlets (banks, registered CSPs).
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Red Flag Alert: If someone asks for your Aadhaar number over the phone or via SMS, it’s likely a scam.
2. Verify the Merchant’s Credentials
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Check if the AEPS agent has a valid Bank Mitra ID or is listed on the bank’s website.
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Look for official branding (e.g., UPI/BHIM logos) on the POS device.
3. Enable SMS Alerts for All Transactions
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Real-time notifications help detect unauthorized withdrawals immediately.
4. Use AEPS Only on Secure Devices
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Avoid public or suspicious-looking biometric machines.
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If a device looks tampered with (e.g., loose fingerprint scanner), walk away.
5. Monitor Bank Statements Regularly
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Report unrecognized transactions to your bank within 3 days for a higher chance of reversal.
6. Beware of “Too Good to Be True” Offers
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Scammers lure victims with fake cashback schemes. Always cross-check promotions via official bank channels.
Security Measures for Merchants to Prevent AEPS Fraud
Merchants and AEPS agents must also take precautions to avoid being exploited or held liable for fraud.
1. Secure Your AEPS Device & Login Credentials
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Never share your agent ID or password with anyone.
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Use two-factor authentication (2FA) for AEPS portal logins.
2. Train Staff to Spot Fraudulent Transactions
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Teach employees to verify customer identities before processing withdrawals.
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Watch for suspicious behavior (e.g., someone rushing a transaction).
3. Regularly Update POS Software
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Outdated systems are vulnerable to malware attacks. Ensure all security patches are installed.
4. Maintain Transaction Records
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Keep logs of every AEPS transaction (time, amount, customer details) for dispute resolution.
5. Report Suspicious Activity Immediately
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If a customer claims an unauthorized transaction, freeze the account and alert the bank.
What to Do If You’ve Been Defrauded?
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Block Further Transactions – Call your bank’s helpline or use net banking to freeze your account.
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File an FIR – Visit the nearest police station and report the fraud.
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Notify NPCI & UIDAI – Report the incident to the National Payments Corporation of India (NPCI) and Unique Identification Authority of India (UIDAI).
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Monitor Credit Reports – Check for any unauthorized loans taken in your name.
Frequently Asked Questions (FAQs)
Q1. Can someone withdraw money from my account using just my Aadhaar number?
No, AEPS requires both Aadhaar and biometric verification. However, if a scammer obtains both, they can commit fraud.
Q2. How do I know if an AEPS agent is legitimate?
Ask for their Bank Mitra ID and verify it on the bank’s official website.
Q3. What should I do if my fingerprint is stolen?
Immediately lock your biometrics via the UIDAI website or mAadhaar app.
Q4. Are AEPS transactions reversible?
If reported within 72 hours, banks may reverse fraudulent transactions.
Q5. Can AEPS work without OTP?
Yes, AEPS relies on biometrics, not OTPs. Be wary of anyone asking for an OTP.
Final Thoughts: Stay Alert, Stay Secure
While AEPS offers convenience, its security depends on user awareness. By following these measures, both customers and merchants can avoid fraud in AEPS service and enjoy safe, hassle-free transactions.
Remember:
✔ Never share Aadhaar/biometrics unnecessarily.
✔ Only use registered AEPS agents.
✔ Monitor transactions and report fraud immediately.
Stay informed, stay protected!
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