$20 million loan scam targets borrowers, UAE authority warns

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:

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:

Be wary of the tell-tale signs of a scam such as persons who:

Remember: