SMS-Based Scams Jump 146 Per cent As Fraudsters Target Higher-Value Transactions, Says Report

India's digital fraud landscape is evolving as the rapid adoption of Unified Payments Interface, mobile banking, e-commerce and online investment platforms continues to grow the country's digital payments ecosystem. While digital transactions have become more widespread, cybercriminals are also adopting scam-led tactics to target users and higher-value transactions.

According to BioCatch's Digital Banking Fraud Trends in India 2026 report, text message-based scams increased 146 per cent during the review period, making SMS one of the fastest-growing fraud channels in the country. It said scammers are increasingly using fraudulent text messages that appear genuine to persuade customers to share sensitive information or authorise unauthorised transactions.

The report found that while attempted fraud sessions among its customers in India declined by 12 per cent, the total value of attempted fraudulent payments increased 35 per cent, indicating that fraudsters are shifting their focus towards higher-value transactions. Mobile fraud sessions also rose 67 per cent, including an 86 per cent increase on iOS devices and a 35 per cent rise on Android devices, while web-based fraud sessions declined 10 per cent.

Fraud Becoming Faster And More Sophisticated

The findings also showed that fraud is becoming faster and more automated. Risky payment sessions doubled during the review period while the median transfer value per fraud session increased 1.7 times. It also noted that fraudsters are increasingly staying connected with victims over the phone, explaining the payment process and discouraging them from verifying suspicious requests.

According to the study, UPI fraud, investment scams, impersonation scams and digital arrest scams continue to drive the use of mule accounts to move illicit funds. In 2025, the Central Bureau of Investigation (CBI) identified more than 8.5 lakh mule accounts across over 700 branches of multiple Indian banks.

Money Mule Networks Continue To Expand

The 2025 data also show that cyber fraud complaints involve Rs 22,496 crore and that 26.48 lakh mule account cases have been reported. It added that transactions worth Rs 9,055 crore were prevented through the suspect registry mechanism, which highlights the scale of cyber fraud and ongoing efforts to curb suspicious transactions.

BioCatch Director of Global Fraud Intelligence Tom Peacock said that SMS scams remain particularly effective because they exploit trusted communication channels, making fraudulent messages appear legitimate and prompting customers to act before questioning what they are seeing.

Also, banks are strengthening fraud detection through AI-based systems and closer coordination with the Reserve Bank of India (RBI), the Indian Cyber Crime Coordination Centre (I4C) and law enforcement agencies.