A court in Dubai has ordered a local bank to pay Dh9.5 million ($2.5m) to a customer after he lost that amount in unauthorised transactions.
The court heard how he was the victim of a Sim swap after his personal banking details were leaked.
In the swindle, a new Sim card is issued by the telecoms service provider against a customer’s registered mobile number.
With the help of this new Sim, criminals can obtain OTPs (one-time passwords) and other alerts required to carry out bank transactions.
In this case, they had the customer’s Sim card cancelled and asked the telecoms company to issue a new one, which they used to withdraw money from his account.
Dubai Court of Cassation dismissed an initial ruling by the Dubai Commercial Court of First Instance, which found the bank and a telecoms company were jointly liable.
The new ruling found the bank liable and ordered the bank to pay the customer.
“The bank insisted that our client, the telecom company, was at fault but after taking our argument into consideration, the court ruled in our favour, stating that the transfers could not have happened if the personal details of the bank client were not leaked in the first place,” said Ghassan El Daye, partner and head of litigation Middle East for UK-based law firm Charles Russell Speechlys, which represented the telecoms company.
In April 2015, the customer, whose nationality and age were not disclosed, gave his brother power of attorney to handle all bank transactions on his behalf.
In October 2018, the man was informed that Dh9.5m was transferred from his account over several transactions between August 2 and September 4, 2018.
The bank’s accounts manager called the victim and told him that 49 online bank transfers were processed and only Dh36 was left in the account.
Investigations revealed that fraudsters had managed to obtain a replacement Sim card of the man’s mobile number registered with the bank.
In its verdict, the Court of Cassation said: “Being under the golden category which deals with accounts with large sums of money, the customer’s account should have been turned into an inactive account after no transactions were conducted on it for 28 consecutive months which is a common practice in this case.”
It also said the bank was responsible for the man’s financial loss after it failed to use a strong authentication system.
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Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
What is blockchain?
Blockchain is a form of distributed ledger technology, a digital system in which data is recorded across multiple places at the same time. Unlike traditional databases, DLTs have no central administrator or centralised data storage. They are transparent because the data is visible and, because they are automatically replicated and impossible to be tampered with, they are secure.
The main difference between blockchain and other forms of DLT is the way data is stored as ‘blocks’ – new transactions are added to the existing ‘chain’ of past transactions, hence the name ‘blockchain’. It is impossible to delete or modify information on the chain due to the replication of blocks across various locations.
Blockchain is mostly associated with cryptocurrency Bitcoin. Due to the inability to tamper with transactions, advocates say this makes the currency more secure and safer than traditional systems. It is maintained by a network of people referred to as ‘miners’, who receive rewards for solving complex mathematical equations that enable transactions to go through.
However, one of the major problems that has come to light has been the presence of illicit material buried in the Bitcoin blockchain, linking it to the dark web.
Other blockchain platforms can offer things like smart contracts, which are automatically implemented when specific conditions from all interested parties are reached, cutting the time involved and the risk of mistakes. Another use could be storing medical records, as patients can be confident their information cannot be changed. The technology can also be used in supply chains, voting and has the potential to used for storing property records.
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Getting there
Flydubai flies direct from Dubai to Tbilisi from Dh1,025 return including taxes
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Global state-owned investor ranking by size
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Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
