Purchase Now, Pay Later (BNPL) has grow to be certainly one of India’s fastest-expanding fintech options. Promising comfort and affordability, it permits the buyer to buy items or companies instantly and pay later in installments — steadily interest-free. For many first-time credit score shoppers, college students, gig economic system staff, and even salaried millennials, BNPL has been the entry level to formal credit score. However as India propels itself in direction of a digitally outfitted economic system, this ease of entry has additionally bred a tradition of fraud. In 2025, BNPL scams have emerged as a trigger for concern — not just for the buyer however even for the general ecosystem of digital lenders, e-commerce gamers, and regulators.
How BNPL Turned a Rip-off Goal
- Relaxed KYC measures by sure platforms allow criminals to get by.
- Low credit score verify opening the best way for high-risk shoppers.
- Incapability amongst first-time shoppers to make financially clever decisions leaves them uncovered to pitfalls.
Consequently, an epidemic of cons presently infects this house, similar to:
1. Bogus BNPL Apps and Phishing Websites
Cybercrooks are creating apps or web sites which can be just like real BNPL platforms. As soon as the client indicators up, the fraudsters harvest their Aadhaar, PAN, telephone quantity, OTPs, and even checking account data. This data is utilized to open BNPL accounts elsewhere — most frequently with out the sufferer being conscious of it — and exhaust the credit score restrict. Instance: A Hyderabad school pupil lately found himself with ₹45,000 in debt on a number of BNPL accounts — all of which he had not initiated.
2. Artificial Id Fraud
Fraudsters have now began combining genuine and phony data to construct ‘artificial’ identities that seem real to BNPL suppliers. These identities are utilized to avail quite a few strains of credit score, make transactions, and vanish when compensation is due. This tactic is very troublesome to watch as a result of nobody individual is being technically impersonated — it’s a ghost account constructed out of piecemeal identities.
3. Account Takeovers
On this fraud, an present person’s BNPL account is compromised — by leaked passwords or social engineering methods. As soon as compromised, the attacker makes swift purchases by the accessible credit score restrict. Earlier than the person may even understand, the credit score runs out and they’re left with assortment notices for purchases by no means made.
4. Social Media Exploits
Sure scams are Ponzi scheme-like on Instagram and WhatsApp. Scammers request customers to supply their BNPL credentials for cashbacks, promo vouchers, and even crypto. Quite a few unsuspecting younger folks fall prey to this, solely to later uncover that they’ve misplaced management over their credit score line.
Additionally learn: Indians Are Switching to App-Based mostly Credit score Playing cards; Right here’s Why You Ought to Too!
Why is BNPL Fraud Rising?
1. Monetary Illiteracy: Whereas fintech has grown exponentially in India, monetary literacy has not saved tempo. Most customers, significantly first-time debtors in Tier 2 and Tier 3 cities, don’t comprehend the phrases of BNPL or the dangers of divulging delicate data.
2. Extra Dependency on Digital Verification: BNPL platforms boast of speedy onboarding. However within the means of buying customers at pace, some have compromised on safety protocols, creating loopholes which can be exploited by scammers.
3. Regulatory Gaps: BNPL exists in a grey space — midway between official lending and unofficial credit score. Many BNPL suppliers have been flippantly regulated or unregistered till lately, which resulted in variability in how they display prospects or report fraud.
The Human Value of BNPL Scams
- Younger professionals and college students are essentially the most desirous to take up BNPL — are getting blacklisted or harassed by restoration brokers for by no means taken loans.
- Id theft victims toil for months to revive their repute, with no clear mechanism of dispute decision.
- Credit score scores are struggling, threatening future loans and even employment alternatives.
- The psychological price can be real — significantly when people are held liable for cash decisions they by no means made.
Measures Taken
- Multi-factor authentication (MFA) for transactions
- Biometric verification throughout sign-up
- AI-based fraud detection processes that determine uncommon person conduct
- Transaction limits for brand new prospects or high-risk teams
- Fintech gamers are additionally collaborating intently with banks and the regulatory authorities to safe compliance below RBI’s lending pointers for digital, which now name for enhanced KYC and knowledge safety requirements.
Suggestions for Shoppers to Stay protected
- Don’t share OTPs, PAN, or Aadhaar on unfamiliar platforms.
- Don’t obtain BNPL apps from unofficial sources — use solely approved app shops.
- Enable app locks and biometric authentication on cash apps.
- Evaluation your credit score report each few months to determine unauthorized accounts.
- Don’t be tempted by cash-back affords for sharing login credentials on social media.
- Report fraud directly to the platform in addition to your closest cybercrime cell.
The Street Forward: Accountable Progress
- Shoppers should be extra vigilant and higher educated.
- Apps must have their backs coated in relation to cybersecurity and never chase development at the price of security.
- There must be better regulation with extra strong frameworks and redressal mechanisms.
Just like how UPI and digital wallets took time to ripen safely, BNPL additionally stands at a turning level. With enough cautions, it might proceed to be a drive for good — not a fraud loophole.
Written by Pydimarri Hema Harshini
