UAE Bank Scams..the real story

[desert-capibara]

When Eastern European cyber criminals started targeting UAE bank accounts a few weeks ago, the newspapers reported initially that only a few people had been affected, and that only small sums had been stolen from people's bank accounts.

Well, as we have come to realise in the sand pit...you're never going to get the real picture from the self-censoring media here.

On Friday, a friend had 100,000USD stolen from her UAE bank account, transferred to the UK, very conveniently at the end of the UAE weekend and the start of the UK banking weekend.

I bet you won't hear about this in the papers...not rumour, not gossip..fact.

I'm sure she will get her money back eventually, but a lesson for those wearing rose-tinted glasses in this part of the world. You certainly don't have the same protections with your money as you would have in the civilised world. The UAE banking system has been woefully slow (and astonishingly arrogant) in establishing decent banking security (and customer protection.

Don't leave large sums in any UAE bank account. Not only are you vunerable to this sort of scam, your estate may also be hijacked by Sharia law should you meet an untimely demise. In this case, some Sharia judge may decide your will means nothing, and he will decide how to share out your estate amoung your relatives.

I have also been warned by a bank that there is still a small possiblity that, despite being held overseas, your provident scheme funds may also be affected by said Sharia blokes (although I'm not sure about this). Welcome to consumer protection UAE style.

[Left Wing]

with laws from 500BC how does UAE attract intl invetsments ? how will the real economy grow once India & China become established players.

Only footballers and bollwood stars seems to be buying the islands, rents have jumped cost of living shot sky high..what is UAEs future

[StarWinder]

Not sure about the various points raised about whether your money is safe in any UAE bank account or not, but certainly the banking system is woefully antiquated - not at all reflective of the "financial hub" image projected everywhere.

For instance, where else on earth does it take 3 days to have a LOCAL cheque cleared?

The other day, a chap contacted me, saying that he was from Mashreqbank (where I hold a salary account) and that I qualified for one of their VISA Platinum Cards. Would I want one? Fair enough, I said, so he comes to my office, helps with the paperwork and takes all the documents (or copies thereof) he requires with him. Ten days later, he comes round again, and tells me that the card has been approved, but that he needs to adjust some of the details in the application form. So I fill in another form, and am told the card will be ready in two or three days. Four days later, same chap calls again, says they need "just one more supporting document"..... at which point I told him to stuff it. How much more unprofessional can it get?:(

[Zomp]

be aware if you use your HSBC or Loyds credit card outside of dubai they charge 2.6% of the payment

[Glorified Donkey]

What is the maximum amount that is insured by the bank? $60,000?

[mensaboy]

I'm actually a bit surprised that this topic hasn't come up earlier. I too know of one instance of an individual who had his bank account emptied recently.
In addition, when buying a property or getting a loan here, its an amazing process. One will be hit with unexpected fees which aren't small either. Usually this is brought up once a cheque has already been handed over so you either write off a large sum or pay the additional fees. Basically you are screwed.
I have never heard of a bank or financial institution requiring UNDATED cheques for things such as cars and even property, covering the entire amount, in advance of even the completion date. This is common practice in the UAE. This of course is in addition to already qualifying, prepaying and setting up payment schedules. As we all know, a cheque in this country cannot be cancelled and it is considered to be cash with respect to the law. In other words, if it bounces for whatever reason, you run the serious risk of jail time in spite of the fact that you may have tried to cancel the cheque, or taken the money from your account in order to stop payment. (for valid reasons)
So now a financial institution or whoever has your undated cheques for eternity. There is no 'written' guarantees of your cheques being returned, although i'm sure it is likely done. In fact there are no 'written' guarantees of anything that might be a protection for yourself.
I have never been lied to more often and more consistently than dealing with these institutions. My conclusion........ I will never deal with them again, and always take my money out of this country at the first opportunity.

[journeyman]

Although I agree with the assertion that banks in this part of the world need to up the ante with regard to internet banking security, all is not as bad as some would make out.
Here's what I can impart from personal experience: I purchased property here a while back - no hidden costs. Bought a car using bank finance - got the cheque back after the last payment. Current personal loan rate - at least 1% lower than average rates in most of Europe.
Had my credit card illegally used (abroad) for a transaction - submitted a claim and was reimbursed, with interest, a few weeks later.
As I mentioned before, the banks do need to lose their naivety - the skimmer on the ATM was in place for a week before anybody took action- but it is by no means isolated to the UAE. Just ask our colleague who recently got fleeced in the US in a 'cloning' scam.
Oh, and the stuff about the provident fund - not likely.

[mensaboy]

I just checked the loans rates back home and my quoted rate here was 1% higher in spite of the fact I apparently receive some discount due to my 'preferred status'. As well they attempted to charge a fee for processing (non-existent back home) as well as loan insurance, if you can believe that one. I asked what that insured me for, and was told it was in case I defaulted. So, in other words, the money goes into the banks coffers. Loan insurance??? wtf

My mortgage quoted here was 1.5% higher than back home, same term same conditions. A 1% fee required to 'process' the loan.

Glad you got your money back (with interest, haha) so quickly. Colleague you mentioned who was ripped off, still has yet to receive repayment.

And of course you should get your undated cheque back. My question is, why should you be giving undated cheques in the first place when you already jump through every hoop imaginable and set up your financing accordingly, after of course paying these pop up fees. Perhaps i have dealt with the wrong banks etc in the past, but that is my point. Anything local, that deals with money......... avoid avoid avoid. Just my opinion.

[journeyman]

I am certainly not privy to any of said colleague's details, but if he was scammed on a ATM card (as opposed to a credit card), then I doubt very much whether he (or anybody else in a similar position) would be entitled to the level of protection offered on a credit card.
So you say you were quoted in the region of 3.5 - 4% back home - best you take it.
Nobody is disputing the higher mortgage rates here, but if you read the fine print, you will note that I said there were no hidden costs involved in my particular instance. As opposed to other persons who alleged there are. Just the facts.