written by | March 16, 2022

What are Cashback Scam Trends? How to Stay Safe from them

In the last few years, there has been an exponential increase in digital payment platforms for online payments. The lockdowns due to the pandemic have only amplified the trend. Many purchases are now made and paid for via the internet. Increased online transactions have allowed scammers to cheat and dupe people out of their money during the pandemic.The convenience of cashless payment has led to increased risks, especially for those who are new to using these platforms. The most recent phishing scam is the Paytm scam related to cashback offer, which is used to steal personal and financial information from users.

What Is Cashback?

Cashback is a type of rewards program in which customers can earn a percentage of their online purchases. It was originally a credit card feature, but it is now available from retailers, online stores, and UPI apps. The primary goal of a company's cashback is to entice consumers to make purchases or use their app for online transactions.You can earn cashback, rewards points, or scratch cards on many digital platforms used for shopping, tickets, hotel booking, and paying bills. Additionally, PayTM offers some of these deals to its regular customers. PayTM generally offers cashback, reward points, or discounts on selected websites for using their services, such as paying utility bills, sending money to someone, or using any other service.Those familiar with the app understand how the cashback schemes work, but an unexpected cashback notification may entice a new user.

Did you know? On Google Play, Paytm wallet applications have 100 million downloads. Paytm has over 350 million users.

How Does The Paytm Scam Work?

Let's talk about the Paytm scam related to cashback offers. 

The cashback online trap starts with a random browser notification saying, "Congratulations! you have won Paytm Scratch Card."

People curious about a link's cashback offer are more likely to open it than those who don't give it a second thought. This notification directs them to paytm-cashoffer.com, a site that they've never visited before.

It claims that a cashback of Rs 2000 has been given to the user. The site then directs them to send this cashback reward to their Paytm account. Because it looks so much like the official app, a new user may miss it entirely. After clicking on the send button, they are redirected to the original Paytm app installed on their device. There they are asked to "pay" the cashback amount. People complete the transaction without realising they are paying the amount rather than receiving it. 

Using this tactic, scammers exploit the user's psychology. This scam works by first getting people to fall for the trap of thinking they have won a huge cashback, then using the cashback to distract them from paying attention to whether they are actually "sending" or "paying" anything.

People who don't understand how a UPI-based app works are the target of the scam. This scam won't work if you don't have the UPI payment app installed on your phone. This fraud only works on a smartphone and not a computer. Every time you click on the link, you are presented with a different cashback offer. 

PhonePe has also been the target of a cashback online scam. Criminals make unsolicited phone calls to strangers, claiming to be from PhonePe. They convince the people that they've won a cashback prize and ask them to click on the reward button.

When people who received such calls completed the transactions by pressing the RewardPe button, money was withdrawn from the person's account, and sensitive information about bank accounts and other internet banking credentials was discovered to have been leaked in many cases.

Also Read: What are the Common UPI Frauds and How to Avoid Them?

Tips to Stay Safe From Cashback Scam

Many notifications claiming you've won cashback or other prizes are scams designed to steal your personal information. It's not a good idea to click on these links without double-checking the source. To verify a website's authenticity, look at the URL that appears at the top of the page. Users should remember that legitimate payment websites and platforms do not give excessive cashback. It is recommended that people cross-check any cashback offers they find on the internet before clicking on them.

Get as much information as you can about the apps you're using, especially for financial transactions, to avoid becoming victims of such scams. PayTM frequently posts warning messages to alert its customers to potential scams, and it's important to remember:

  • PayTM never offers cashback or reward points through an external link or a third-party website. If you win cashback, it will be automatically credited to your PayTM wallet or the bank account you have linked to the app.
  • The app does not ask its users to visit any other website to receive cashback or reward points.
  • Your browser won't notify you of any cashback or reward deals you might be eligible for. You will be notified of new PayTM offers via your registered email address or the PayTM app.
  • The recipient should never click on a link sent via WhatsApp or SMS from an unknown sender. It's best to ignore any bank or cashback offers you receive through one of these services.
  • When you "receive" money, you don't need to tap on the "Pay" button or enter your UPI PIN. You can only send money or check your bank balance using a UPI PIN.
  • Before transferring money, verify the identity of the recipient.
  • Keep your One-time password (OTP) and bank account information private at all times.
  • You'll see a lot of hoaxes and fake news in the messages and links you get from various platforms. You might notice typos, a different design, or other unusual behaviour if you look closely. Keep an eye out for these indicators so you can verify the accuracy of the information provided in the bogus link.
  • If you're going to download anything, make sure it's from a trusted source. Occasionally, an app is hidden from view, and you download a clone of the original version.
  • As a precaution, never scan an unknown QR code on WhatsApp.

Also Read: What is Request Money Fraud & How to Prevent it?

Reporting of Paytm Scam
Paytm claimed to have the best cyber security team to protect its customers' safety and privacy. Using artificial intelligence (AI), the app can immediately identify any fraudulent or suspicious activity and notify telecom authorities, the user's bank, and the cyber cell of any fraudulent flagged activity.

Every UPI-based app can report digital payment fraud. The Help and Support section is good to look at if the option is not immediately visible in the app. Here's how you can report any fraudulent transaction, including the cashback online fraud on the Paytm app.

  • Step 1: Go to the "profile" section in the upper left corner of the screen.

  • Step 2: Press Help and Support once more.

  • Step 3: Find and choose the "Choose a service you need help with" section, and click on the "View all services" button.

  • Step 4: Find and click on the "Report fraud and transactions" box.

  • Step 5: Identify the issue that best describes your problem. Fraudulent transactions, phishing websites, and other issues can be reported similarly.

  • Step 6: You will then be asked to provide the specifics of the fraud so that they can take appropriate action after conducting a thorough investigation.


Consumers increasingly use peer-to-peer payment (P2P) and eWallet apps to pay for goods and services in online marketplaces. In India, these apps are becoming more and more popular. Using these platforms, people can send money to loved ones in other states, pay for local services, and more. More than half of all peer-to-peer (P2P) transactions involve a customer transacting with an unknown third party, making them particularly vulnerable to fraud. As e-commerce, mobile payments, and computing power have grown, so has the sophistication of fraud.

Consumers must be extra cautious when conducting financial transactions over the internet. They should never give out their personal or financial information to anyone over the phone or the internet. Hope the information provided above prevents you from falling victim to online cashback scams. Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.

Kindly report the case to either your card issuing bank or reach out to the nearest Cybercrime. Send an email to cybercell@khatabook.com to report the case.

Important: Never share OTPs, PINs, or any other codes that you receive via SMS or other channels. Never share your Account Number or Credit and Debit Card details on a public platform.


Q: What is SaveMudra?


SaveMudra.com is a Cashback Website that aims to help customers save money on their online purchases by providing cashback. Cashback can be earned on nearly every well-known online retailer. They have affiliations with top online retailers like Amazon, Flipkart, Myntra, and more.

Q: How to find the scratch card in Paytm?


The scratch card is available in the "Cashback and Offers" section of the Paytm App.

Q: Does Paytm offer cashback?


PayTM never offers cashback or reward points through an external link or a third-party website. If you win cashback, it will be automatically credited to your PayTM wallet or the bank account you have linked to the app.

Q: What is a cashback?


Cashback is a type of rewards program in which customers can earn a percentage of their online purchases.

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