Abu Dhabi, UAESaturday 25 January 2020

UAE bank ordered to pay Dh4.5 million to customer duped by Sim card scam

Dubai Commercial Court found the bank responsible for the victim's personal details being leaked

A bank has been ordered to pay more than Dh4.5 million to a customer swindled out of his life savings by fraudsters. 
A bank has been ordered to pay more than Dh4.5 million to a customer swindled out of his life savings by fraudsters. 

A UAE-based bank was ordered to pay millions of dirhams to a customer swindled out of his life savings in a Sim card swap scam.

In a landmark ruling at Dubai Commercial Court, the bank was found to be responsible for the victim's Dh4.5 million losses after he fell foul to financial fraudsters.

The court concluded that the victim's personal details had been leaked by an employee at the bank, the name of which was not disclosed to The National.

Using the client’s phone number, the tricksters were able to obtain a replacement Sim card, and change the Pin code connected to his bank services before logging him out and stealing the funds in his account.

The man, who had once worked in the UAE but was living overseas at the time of the crime, discovered his bank account had been emptied during a visit to the country in 2017.

“Our client used to work in the UAE but moved out of the country, leaving behind Dh4.577m in a personal savings account he opened in 2015,” said Ghassan El Daye, partner and head of litigation Middle East for UK-based law firm Charles Russell Speechlys.

The legal team advised the man to pursue a claim in the civil court to win his money back, arguing failings on the part of the bank had allowed the crime to take place.

“We argued that for such scam to succeed, our client’s confidential information must have been deliberately exposed by some of the bank employees who had access to it,” said Mr El Daye.

During a hearing in September, the bank said the client should have raised the alarm over the suspicious transactions within 30 days of receiving his account statement.

An expert’s report submitted to court came out in favour of the legal team’s argument that their client’s confidential data, including his official documents and contact numbers, had been illegally disclosed to others by an employee of the bank.

“This information was illegally passed to other culprits who used it to obtain a replacement Sim card for the client’s phone number from the local telecommunications service provider in Dubai,” said Mr El Daye.

Dubai Commercial Court found the bank to be responsible for the man's significant financial losses.

The bank was ordered to pay the victim more than Dh4.6 million, the sum of money stolen from him as well as Dh100,000 in compensation.

“This judgment is significant because it involves new crucial factors related to UAE's banking sector and it's customers,” said Mr El Daye.

He called on banks to tighten up security measures, monitor the use of Pin codes more rigorously and carry out more extensive background checks on employees.

"These background checks must be done constantly and not only one time at the beginning of the bank/employee relationship,” said the lawyer.

“Telecommunications companies must also impose tighter control related to Sim card replacement applications.

“It must be forbidden to issue a replacement Sim card unless the holder of the card appears physically at both the bank and the telecommunications provider offices with original official documents as proof of identity.”

The bank has lodged an appeal against the verdict.

Updated: December 8, 2019 05:00 PM

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