Dubai: How to recover money lost to online scams and fraudulent transactions

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A Dubai-based legal and financial expert, who has been helping residents recover money from online scams and debt traps, had fallen victim himself to a fraudulent transaction. But he was able to recover the money immediately and he wanted to share tips how he did it and how to avoid scams.

First off, Barney Almazar, director at Gulf Law in the UAE, Philippines, UK and Portugal, emphasised “the responsibility to prevent fraudulent transactions does not rest alone with the cardholders, as card issuers must also have a big share in that responsibility.”

“Banks should employ advanced fraud detection systems that monitor transactions for suspicious activities – such as large or unusual purchases – and notify customers immediately when potential fraud is detected,” he added, noting: “Timely communication with customers is crucial.”

About his case, Almazar told Khaleej Times: “I have always been very careful with my credit card and online transactions, and yet my card has been used fraudulently. I reported to the bank immediately upon receiving an SMS notification that my card was used. I stressed the fact that I did not authorise the transaction with a rental company in UK (Almazar was in Spain when the incident happened last year) and that I did not get any OTP. In two days, the purchase of around Dh8,475.63 was reversed.”

“But for many unfortunate cardholders, the reversal process is always a nightmare especially when banks blame them for their personal negligence,” he noted.

Almazar reiterated: “Credit card issuers have important social responsibilities to prevent fraud and protect the cardholders. Implementing multi-factor authentication for online transactions adds an extra layer of security, making it harder for fraudsters to gain unauthorised access.

“Banks should continuously update their security protocols and systems to stay ahead of evolving fraud tactics. In other jurisdictions, banks have zero liability policies in place, ensuring that customers are not held responsible for fraudulent charges, provided they report them promptly,” he continued.

Notify banks immediately

To reverse fraudulent transactions, it is important to notify the bank immediately. If the customer did not receive any OTP (one-time password), banks cannot make him/her liable for the unauthorised transaction, Almazar underscored as he cited the case of one of his clients.

Almazar recently helped Marie (name changed as requested) file a dispute challenging a series of fraudulent transactions amounting to Dh94,570.

In a letter addressed to a UAE bank, Marie, a Filipina living in Sharjah, disputed the claim by the bank that “the fraudulent transactions were completed under contactless mode which was activated through OTP sent to (Marie’s) registered email and mobile. Hence, the liability for the transactions rests on (Marie).”

Marie claimed it was not true as “she never received” any notifications from the bank on her email and mobile phone.

Grounds for claiming redress

Almazar and Marie based their demand for the reversal of the unauthorised transactions on these five grounds:

Timely notification – Marie promptly notified the bank’s customer service department as soon as she became aware of the fraudulent transactions.

Absence of Consent – Marie did not provide any authorisation or consent for the transactions, nor did she receive any goods or services.

Secured usage – Marie “asserted she has always taken reasonable measures to secure credit card information and its confidentiality.”

Inconsistencies – In her detailed letter, Marie pointed out the unfamiliar merchant names, activities and locations. The transactions were traced to companies based in Ukraine and Russia. Moreover, Marie’s my credit limit was Dh82,380 but the bank allowed and processed other transactions amounting to Dh12,180 that resulted in Marie’s liabilities to more than Dh94,000.

Cooperation – Marie said she is willing to fully cooperate to the bank investigation

‘Do not accept partial refund’

Almazar said they are still negotiating with the bank that has initially offered a partial refund. “But I strongly advised Marie not to accept it because she is not entirely liable,” he underscored.

“In my opinion, banks must be more active. Definitely, they have knowledge that a lot of these things are happening and they should be able to provide measures to detect these and not conveniently put the blame to their clients,” he added.

‘Limit your exposure’

Almazar summed up the following tips to protect bank customers. He also answered the question whether or not the customer must pay the bank for the fraudulent transactions.

We cannot avoid online transactions in this day and age but we can have a card with low limit for online use so exposure is limited.

To reverse fraudulent transactions, it is important that you notify the bank the soonest.

Do not delete messages from banks such as OTP and transaction notifications.

If you did not receive any OTP, banks cannot make you liable for the transaction you did not authorise.

Banks may tell you to pay the amount due and they will reverse following investigation. I strongly discourage this as you will be finding yourself running after the refund.