Online scammers have become increasingly active, developing new tactics to defraud unsuspecting victims.
Emergence of Loan Scams
A recent method, termed the 'loan scam,' involves fraudulent lending companies that demand an initial deposit as a processing fee to secure a loan. After this, they require another payment to release the funds, effectively extorting multiple payments from the victim without providing the promised loan.
Cristy, a 35-year-old Filipina expatriate working as a shift supervisor in a Dubai restaurant, fell victim to such a scam. She recounted her experience, explaining how she encountered a Facebook ad offering quick, collateral-free loans to Overseas Filipino Workers (OFWs). Needing money urgently for a family emergency, Cristy contacted the supposed lending company, which asked for a processing fee of P20,000 (around Dh1,250), promising no additional requirements.
Believing the offer was genuine, Cristy borrowed the processing fee from a friend to secure a P200,000 loan (Dh12,500). After the company confirmed receipt of her payment, she was informed her loan had been canceled due to a 'low credit' rating. They then demanded an additional P50,000 (Dh3,125) to rectify this issue and release the loan, including the P50,000 deposit. Eventually, Cristy paid P70,000 (Dh4,375) but never received the loan. The loan officer blocked her calls and messages, leaving her with nothing but debt and frustration.
Attorney Barney Almazar, director of the corporate-commercial department at Gulf Law, noted a surge in scam activities, highlighting that scammers have become busier and more aggressive. His cybersecurity and financial fraud team has been assisting around 20 victims monthly over the past five months. Almazar emphasized the troubling rise in online scams that exploit trust and financial security, ranging from fraudulent loan processing to enticing part-time job offers via messaging apps like WhatsApp. One client reported losing more than half a million dirhams to such schemes.
Varieties of Online Scams
Scammers often masquerade as legitimate bank agents, promising attractive loan terms and quick approvals even for those unemployed or on tourist visas. They demand upfront processing fees, and once paid, they vanish, leaving the victim with more debt. Almazar also highlighted another prevalent scam involving fake job offers circulated through messaging platforms. Victims are lured by promises of high incomes for minimal work, such as completing simple tasks or participating in surveys, only to end up losing money or compromising their personal information.
A recent case involved an Abu Dhabi resident who received a WhatsApp message from an alleged market researcher to complete a simple survey and subscribe to a YouTube channel for an initial payment of Dh300. After performing several tasks, the victim transferred Dh534,800 to 16 UAE bank accounts over two days, never recovering the money. The bank accounts were emptied, highlighting the severity of these scams.
Last month, it was reported that scammers were targeting UAE residents by creating WhatsApp groups offering passive incomes of up to Dh800 daily for tasks like liking, following, and commenting on YouTube posts. A reporter joined two such groups, demonstrating the scammers' aggressive recruitment tactics. Additionally, a Dubai hotelier lost her entire life savings of about Dh66,000 to a part-time job scam.
Precautionary Steps
From a legal perspective, these scams represent significant financial fraud and pose severe risks to personal security and privacy. Almazar advises the following steps to protect oneself against online financial predators:
- Verify sources by contacting the institution directly through official channels before making payments or sharing personal information.
- Avoid upfront fees; legitimate lenders typically deduct processing fees from the loan amount.
- Report suspicious activity to the Police Cybercrime Department or the Telecommunications Regulatory Authority (TRA).
- Avoid clicking on links in unsolicited messages and navigate directly to official websites.
- Use two-factor authentication on financial accounts and services.
- Monitor financial statements regularly for unauthorized transactions.
- Update security software on devices.
- Always be aware of the signs of a common scam.
Awareness and vigilance are crucial in combating the growing threat of online scams. By taking precautionary measures and staying informed, individuals can protect themselves from financial fraud and safeguard their personal information.
