May 24, 2016

Thousands Hit by Credit-Card Fraud in the UAE, but What Can Be Done?

Credit-card fraud is rising in the UAE, with scammers using tactics like phishing, social engineering, and small “test” transactions to steal details. Experts warn that chip cards help in-store—but consumers must stay cautious, report fast, and use strong verification tools online.

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Gulf News coverage on UAE credit card fraud and identity theft featuring ITSEC Amir Kolahzadeh

Annual losses from worldwide fraud on credit, debit and prepaid cards hit $16.3 billion in 2014.

It’s a well-told story, but one that never loses its sense of dread and capacity for causing concern — a message from your bank that you’ve carried out a transaction you never actually made. Indian expat Sam Varghese, 45, learnt the hard way after his card was used for dubious transactions worth more than Dh4,000 in just under two days in April.

“The scamsters started with a small test amount of $1 (Dh3.67) just to ensure the credit-card details are accurate,” says Varghese, who works in Dubai.

“I got a message about the transaction, but didn’t pay much attention because it was a small amount. Two days later, another transaction worth about Dh4,000 was made at a store in South Korea.” Varghese then alerted the bank to block his card.

Rising trend

Thousands of people fall victim to credit-card fraud every year in the UAE, with fraudsters’ crimes coming to light once they have done their underhand work and disappeared into the cyber wilderness.

UAE-based Prashanth Thyagarajan’s family faced a similar ordeal. Last July, he was touring the Netherlands, Germany and Switzerland when his wife received a text from her bank to say her credit card had been used to pay for Dh4,500 worth of goods in a supermarket without her knowledge.

The 29-year-old says that after about six weeks of discussions with his bank, the amount was finally refunded to the couple’s bank account.

Threats evolving

Amir Kolahzadeh, Managing Director of cybersecurity firm ITSEC, says most credit-card frauds initiated by random spam and other tactics are short-lived as financial institutions, law enforcement agencies and public vigilance put an end to them. However, identity theft is evolving and crooks are becoming more intelligent, targeting their victims much more specifically using social engineering tactics.

Kolahzadeh says financial institutions are constantly looking at new technology to protect consumers and themselves. Most banks now offer SMS services or double authentication for online purchases tied to mobile numbers. Consumers should report a missing or stolen card or any unrecognized transaction immediately.

Card security

Waleed Barhaji, Business Head, Consumer Finance at Noor Bank, says chip-and-PIN technology (EMV), which has been introduced in the UAE, has made it more difficult for fraudsters. The chip-and-PIN concept has also enhanced consumer protection, and in most cases fraud liability rests with the card issuer.

The UAE Banks Federation has a fraud prevention committee that brings card issuers together to manage fraud risk effectively, and dispute processes are fairly standardized across banks.

Source: Gulf News

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