Govt launches 'Financial Fraud Risk Indicator' to combat cyber scams; check how it will work for UPI

The Department of Telecommunications (DoT) on Wednesday 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 labels mobile numbers as having a Medium, High, or Very High risk of being linked to financial scams. It gathers data from multiple sources, including the Indian Cybercrime Coordination Centre’s National Cybercrime Reporting Portal, DoT’s Chakshu platform, and reports from banks and financial institutions.

Given that fraudulent mobile numbers are often used for short periods, the FRI tool enables quicker identification of high-risk numbers before full verification procedures are completed.

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

When someone tries to make a digital payment to a flagged number, banks and UPI platforms can use this information to double-check or block the transaction.

PhonePe, one of India’s top UPI platforms, is already using the FRI. It blocks payments to numbers marked as Very High risk and shows a warning on the user’s screen through its PhonePe Protect feature. PhonePe’s data shows 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 go through.

Other major UPI platforms like Paytm and Google Pay, which together handle over 90% of UPI transactions in India, have begun integrating DIP alerts into their systems, 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” with 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.