UAE customers complain as banks issue credit cards without proper ID verification

Fraudsters are replicating identity documents to apply for new debt

Only allow a known professional entity to take a copy of your ID. Pawan Singh / The National

Fraudsters are believed to be using a loophole found in some UAE banks to pose as customers to take out credit cards and accrue debt.

Some banks have allegedly accepted a copy of an Emirates ID, instead of the original, when they issue loans to customers.

Readers told The National they had been scammed through certain UAE banks issuing credit cards upon submitting a replica of their Emirates ID cards, leading to fraudulent applications for credit cards and accruing debt.

The fraudsters’ motivation in such cases is to obtain copies of people's identity documents and replicate their Emirates ID at a typing centre. Using the replicated ID card and other documents, they approach banks, some of which do not adequately verify the applicant's identity and issue credit cards.

While some banks involved in the case claimed the signature on the submitted documents matched, others refused to issue a card as a fingerprint check failed.

The fraudsters then use these credit cards for large payments, which lead to debt under the unsuspecting person’s name unknown to them until alerted by the bank.

The readers did not want to be named as their cases were being investigated by the police.

The banks named by the readers were Commercial Bank of Dubai and Emirates Islamic Bank.

A CBD official said: “We take the security and integrity of our credit card issuance process very seriously. CBD is committed to ensuring compliance with the regulations set forth by the Central Bank of the UAE. We have identity checks in place and ensure that we continually review and enhance our processes to safeguard our customers and their financial well-being.”

A Emirates Islamic Bank spokesperson said the bank is fully compliant with the the Central Bank of UAE’s guidelines.

"We follow a stringent process for the verification of all credit card applications and associated documentation to ensure the security of our customers' personal information and prevent any fraudulent activities. We urge our customers to be cautious of identity fraud and regularly run awareness campaigns to educate them against fraud. Should such an unfortunate event occur, the bank is committed to supporting our customers in every way possible,” the official added.

The growing adoption of financial technology and digital transactions in recent years has led to higher cases of financial fraud.

Criminals have been exploiting technology to their advantage, making them more sophisticated and difficult to counter, opening up several avenues to take advantage of unsuspecting users.

Fifty-four per cent of people in the UAE reported being a victim of fraud at least once, with 17 per cent saying they had been conned multiple times, according to Visa’s annual Stay Secure survey, released in December, which polled 5,800 adults in Central and Eastern Europe, the Middle East and Africa.

We asked financial experts what customers can do to avoid fraud.

Sophisticated fraud

“It is getting more and more difficult to protect against this kind of fraud as the perpetrators are getting more and more sophisticated but there are some steps people can take to protect themselves from identity theft and credit card fraud,” says Carol Glynn, founder of Conscious Finance Coaching.

“The reader was right to lodge police cases for identity theft. It’s critical to act quickly to ensure they are not held responsible for the fraudulent debts. They should also report this to the Central Bank of the UAE, raising a complaint against the bank for issuing credit cards without adequately verifying the applicant's identity.

“Request the bank to conduct an investigation into how this happened. Ask them to report on what documentation they accepted from the fraudsters to approve the credit cards.”

The reader should immediately inform the bank in writing that they are a victim of identity theft and provide copies of the police report, Ms Glynn says.

The reader should dispute the debt with the bank’s fraud department and instruct them to freeze the account while the investigation is continuing. She says it was essential to request a written confirmation that they are disputing the charges and to follow up regularly.

She also recommends the reader consult a lawyer who specialises in consumer rights or identity theft to ensure their legal rights are fully protected and to assist with any negotiations with the banks. A lawyer can also provide support if the case escalates.

People should also change passwords across all their banking services, email accounts and anywhere personal information may be potentially accessible.

“It’s essential to follow up regularly with the authorities to keep the investigation active,” Jay Adrian Tolento, a financial coach, says. “The UAE Central Bank takes identity theft seriously and can help mediate between the consumer and the banks.

“Reach out to the Emirates Consumer Protection Association. They handle complaints related to fraud, deception, or manipulation of services. They also help submit cases to the relevant authorities and follow up on the matter, ensuring that the reader’s complaint receives proper attention.”

He also suggests notifying the Al Etihad Credit Bureau about the identity theft so they can assist in correcting any inaccuracies on credit reports resulting from these fraudulent accounts.

Identity theft recovery

A person can also contact identity theft recovery services that can assist in managing the aftermath of identity theft, he adds.

Keren Bobker, an independent financial adviser and senior partner with Holborn Assets in Dubai, says it is irregular that banks are issuing credit cards simply by being given an ID card. Under Know Your Client rules and anti-money laundering regulations banks should also require proof of address.

“Assuming the reader didn’t have existing accounts, additional information would be required such as the sight of a passport and, importantly proof of income,” she says.

“I would demand sight of the full information obtained on application to ascertain what was actually provided and to see if sufficient checks were made. The Central Bank of the UAE has a requirement that such documents be for a minimum of five years.

“If the banks claim this was all provided to them, they should have no issue in sending the reader copies.”

Precautions to avoid fraud

Never share personal documents like Emirates ID, passport copies, or bank details with unrusted sources, especially over email or messaging platforms, says Ms Glynn.

Mr Tolento says people should “keep sensitive documents secure”.

“Shred any paperwork containing personal information before disposal to prevent unauthorised access,” he adds.

Ms Bobker warns against sharing copies of ID or passport numbers online and to only allow known professional entities to take copies of your ID card.

Ms Glynn suggests using secure communication channels with banks. Ensure that you only communicate with your bank through verified, official channels such as by calling them directly using phone numbers publicly provided on the bank’s website or the back of your cards, she says.

She says that people should be extremely cautious when receiving unsolicited calls, emails, or messages asking for personal information and urged people to never provide personal information over the phone. All calls should be carried to the bank directly to verify the requests. She adds that any unusual or threatening behaviour should be viewed as a major red flag.

“Monitor your credit reports regularly. In the UAE, you can request your credit report from the AECB. Regular checks help spot any unauthorised credit activities,” Ms Glynn says.

“Notify the authorities immediately if anything seems suspicious. Report lost or stolen identification documents to the authorities, as these can easily be used to commit fraud.”

She also recommends enabling additional security measures such as two-factor authentication wherever available, particularly for banking and credit-related accounts.

Mr Tolento says unique and complex passwords should be used for online accounts or a password manager should be used. He adds that people should refrain from accessing sensitive information over public Wi-Fi networks, which can be less secure.