$20 million loan scam targets borrowers, UAE authority warns
Fraudsters promise borrowers access to loans of up to $20 million
Dubai: UAE residents have been warned of a cash for loan scam, which has been trying to con consumers out of hard-earned money.
The Dubai Financial Services Authority (DFSA) on Wednesday issued a warning, citing that scammers have been using the name of the financial regulator and two UAE government authorities to trick people into paying huge processing fees in exchange for loans of up to $20 million (Dh73.4 million).
How it works
Fraudsters who are targeting individuals in search for a loan promise potential victims that they can borrow up to $20 million in cash.
The customer then signs up, completes the paperwork and expects the promised amount to be released after approval.
However, once the consumer is hooked, the scammers advise the borrower that the transfer of funds has been “put on hold.”
In order for the lender to release the money, the borrower is advised to pay multiple clearance fees.
“The value-added tax charged on the transaction… was ignored and we have hereby ordered the bank to immediately put a stop on the funds that [were] set on transit,” reads one falsified document intercepted by the DFSA.
The regulator said the scammers then ask the borrower to pay the following:
- $60,000 to one legitimate UAE government authority (name witheld)
- $26,500 to another legitimate UAE government authority (name withheld)
- $54,300 to the DFSA for the “official registration and approval” of an “investment contract” with the regulatory body
To make themselves look credible, the scammers produce documents bearing the logo of the DFSA, use the name of the current chief executive of the DFSA and falsely claim that he is the head of the DFSA’s “international funds transfer supervision,” as well as fake letters from two legitimate UAE government offices.
“The DFSA strongly advises that individuals do not respond to any communication regarding the scam, and under no circumstances should they send any money to any party involved in the scam,” the DFSA said in a statement.
The DFSA says you can avoid being scammed by:
- Checking the relevant regulatory agency’s website to see if the company you are dealing with is listed and regulated. You can even contact the regulator to verify whether the company is regulated
- Doing general searches (e.g. on Google) to see what information can be found about the company you are dealing with
- Only dealing with people you trust. Dealing with individuals you have never met carries a higher risk
- Getting independent advice before entering into a transaction, or getting a second opinion from a trusted friend
- Using common sense
Be wary of the tell-tale signs of a scam such as persons who:
- Communicate only via email and telephone with a reluctance or a refusal to meet in person;
- Are reluctant or refuse to provide information on who regulates their activity; and/or
- Use generic email address such as Hotmail and Yahoo; and
- Keeping paperwork safe. When entering into any new relationship ensure that you maintain good records of all paperwork you receive and keep records of all your meetings and conversations. This may not prevent you from being scammed but will assist in the event that you need to take any action.
Remember:
- If you receive an offer of an amazing deal out of the blue, don’t believe it. If it seems too good to be true then it is probably a scam
- If you receive an opportunity to invest in a financial product which looks real, offers bigger and faster profits than real investments, offers less risk and less effort than real investments, offers something special that genuine investments don’t offer; and urges you to act more urgently than the real thing