UAE bank to pay Dhs4.6m to client duped by SIM card swap fraud

A local bank has been accused of swap fraud of SIM card that lead to a customer’s nearly loss of Dh5m of his life savings. Such judgment is the first of its kind in the UAE.

The case dates back to 2017 when the man’s money was stolen from his account which the bank had then closed without his knowledge, Dubai Commercial Court was told.

Ghassan El Daye, Partner and head of litigation Middle East with the UK-based law firm Charles Russell Speechlys, said “Our client, used to work in UAE but moved out of the country leaving behind Dh4.6m in a personal savings account he opened in 2015.”

The man visited the UAE in May 2017 and used his ATM to withdraw cash, but found his account empty.

At his bank, he was advised to lodge a criminal complaint against the unknown fraudsters, which he did.

But a Charles Russell Speechlys Litigation team headed by Ghassan El Daye strongly advised him to pursue a civil case in order to win his money back، and one was lodged in August 2018.

During a court hearing in September the victim’s defence said the bank should be held responsible based on facts and experts’ findings.

But the bank insisted it was the client’s responsibility since he had possession of the original SIM card and PIN number, and argued that the client should have objected to the transactions within 30 days from reviewing the account statement.

The bank also failed to disclose it’s internal investigation reports to a court-appointed expert and claimed the incident was a result of faulty transactions.

“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 El Daye.

An expert’s report submitted to court came in favour of the legal team’s argument regarding their client’s confidential data including his official documents and contact numbers, being illegally divulged 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,”

Using the client’s phone number, the fraudsters were able to change the PIN code connected to his bank services before logging him out and emptying his account.

Dubai Commercial Court rejected the bank’s claims in October 2019 and declared it responsible for the scam.

It has ordered the bank to pay the victim Dh4,677,596 with a 9% interest to be paid from the date the case was lodged.

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

El Daye believes the judgement suggests several recommendations for banks and telecom providers including the need for local banks to apply tighter security measures, carry out continuous monitoring and upgrading of PIN numbers, and conduct higher standards of background checks on employees.

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

“Also for telecommunications companies to 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,” El Daye said.