The Debt Panel: 'Fraudsters used my credit card to fund a UK trading account'

The Dubai resident is seeking advice after receiving a partial refund from the bank for the fraudulent transaction

Nick Donaldson / Getty

I have been using a cashback credit card for the past four years.

On June 13 at 8.38am, I received a message that said a payment of Dh23,806.88 had been made to eToro UK Ltd through my credit card.

At the same time, I got a call from my bank’s card security team and they informed me that a suspicious transaction had taken place on my account.

I told the security team that it was a case of hacking, my card was with me and I did not receive a one-time password (OTP) for the transaction.

I also said that I had never made a transaction with eToro UK Ltd in my life, so someone may have used my credentials online.

They asked me to fill out a dispute form and email it to their help desk, which I did.

On June 20, 2022, the bank refunded Dh15,314.83 to my credit card account despite the fraudulent amount being Dh23,806.88.

The remainder — Dh8,492.05 — has not yet been reversed. The bank has also requested that I pay the fraud amount on the due date to avoid a late payment penalty.

I have made a payment on my credit card to cover what I have spent. I asked the bank to keep the fraudulent amount on hold until the dispute is over or to give me a temporary full credit to cover the fraud amount.

However, the bank said that was not possible and it would take up to 136 business days to finalise the matter.

I will not be able to pay this amount due to my current financial situation and believe that it is unfair that I will be penalised for late payment on a fraudulent transaction that they have acknowledged with a partial refund.

What rights do I have regarding this and how can I get the bank to withhold payment on the remaining fraudulent amount until the matter is settled? YJL, Dubai

Debt panellist 1: Jaya Ratnani, managing partner at Freed Financial Services

Sadly, you are not alone in what is becoming an increasingly common type of financial fraud around the world.

OTPs remain a very safe way to carry out transactions. In situations where it is not a 3D-secured transaction and the OTP is not verified, the liability of the transaction shifts to the merchant and not the customer.

While the fraud transaction is under investigation, this amount can be placed on hold and the bank can provide a temporary credit while the charge back is under progress.

Ask the bank if a police complaint needs to be filed and if the copy of the report can help to support the case.

You should insist that the bank provides you with temporary credit to cover the fraudulent amount. As the bank has refunded a partial amount of the transaction, this should give them assurance that the transaction was fraudulent.

While you continue to pay for the transactions you have used on the card, you should also notify the bank that any finance charges accrued due to the fraudulent transactions will need to be reversed.

However, it is important to note that finance charges are billed on all your transactions and not just the fraudulent amount.

Upon resolution of the fraud inquiry, the bank should reverse the charges pertaining to the transaction.

Regarding the late payment penalty, could it be that you missed the deadline to pay your credit card bill for the month?

A fine would be charged if you failed to make the minimum payment on the due date. If you haven't missed a payment, you can request that this charge be waived.

Customers who have a complaint about their bank can register it with the UAE Central Bank's Consumer Protection Department. Photo: Central Bank of the UAE

It is recommended that you visit the bank in person or ask to speak to a supervisor on the phone. Keep communicating with the bank and retain a record of all your correspondence to date and going forward.

If the bank refuses to help you 30 days after your complaint, you can contact the UAE Central Bank’s Consumer Protection Department through its website or call 800 22 823 to escalate the issue.

Debt panellist 2: Alison Soltani, founder of Leap Savvy Savers

I am sorry that you have to endure this lengthy and challenging process to reclaim your money. It is frustrating and stressful to fall victim to financial fraud, which has been exacerbated by the bank’s lack of support.

The first thing to do would be to visit your branch and ask to speak to the relationship manager.

Request a reason for the partial refund and ask again for the temporary credit to be applied. If they still refuse to apply temporary credit, ask if you can pay in instalments without incurring fees and interest.

If the bank does not accept reasonable terms for repayment, I would then recommend raising a complaint

Alison Soltani,
founder of Leap Savvy Savers

If the bank does not accept reasonable terms for repayment, I would then recommend raising a complaint.

As my fellow panellist says, if they do not respond or provide you with a satisfactory outcome within 30 days, file a complaint with the UAE Central Bank.

However, it may be a lengthy process to resolve the complaint, so I would be looking at ways you can pay back the card in the interim.

The bank is likely to refund the stolen funds in the case that the transactions are deemed fraudulent, but is unlikely to cover the fees associated with late payment.

To know this information for certain, refer to the terms and conditions of the credit card. If the balance is not paid, it would cause more negative effects such as lowering your credit score.

You could also investigate the option of transferring the balance to a card with a zero per cent interest offer on a balance transfer.

That way, you have the duration of the offer to pay the balance down, which is usually three to six months, before any charges are levied.

In the immediate term, that reduces the stress of interest and charges being applied.

Another option could be taking out a low interest rate loan to pay the credit card as that would reduce the overall amount of fees you will pay.

Despite taking these measures to pay the balance, keep following up with the bank and UAE Central Bank about returning the money until the case is resolved.

To protect yourself in the future, it is worth building an emergency fund.

Unfortunately, financial fraud is becoming more common and banks tend to have lengthy resolution timelines, leaving the victim liable to pay the balance in the short term.

In situations like this, or any type of unplanned financial crisis, having an emergency fund can alleviate some of your stress. The common advice is to save three to six months of expenses and reserve it for emergencies.

I wish you the best of luck in getting this issue resolved as soon as possible.

Debt panellist 3: Felicity Glover, personal finance editor at 'The National'

I am sorry to hear that you have been the victim of banking fraudsters. It is extremely frustrating and all too common these days despite the security that banks have in place to protect their customers.

Financial fraud has accelerated during the coronavirus pandemic as more people rely on online services for work and their private lives, such as paying bills, doing their banking and shopping.

As my fellow panellists have advised, you are well within your rights to request a temporary hold on the fraudulent amount and for the bank to waive the interest and late payment charges.

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  Cybercriminals were employing new methods to try to take advantage of people continuing to work from home due to the Covid-19 pandemic. Getty Images

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  Hector Rodriguez, from Visa, has warned people to stay alert against the perils posed by cybercriminals. Courtesy: Visa

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  Scammers often steal passwords by infecting people’s phones by a malware or dupe them into revealing it.

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  Emad Haffar, from cybersecurity firm Kaspersky, has offered advice on how to stay ahead of online crooks. Courtesy: Kaspersky

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  Cyber security is a major concern for Arabian Gulf countries and a growing consideration in their budgets. Reuters

However, it is important to note that each bank has different repayment policies when it comes to refunding late payment charges on fraudulent transactions, while the investigation can take two to three months — as you have learnt from your experience with your bank.

There are numerous steps you can take to protect your finances from fraudsters.

These include avoiding unsafe websites — always check the URL in the address bar and if it begins with “https” and has a padlock icon, it means the site is secure. Poor grammar and spelling are also giveaways that a site is not legitimate.

It is also important not to save your card number on websites despite the convenience of never having to type it in when making payments for purchases.

In addition, set up two-factor authentication and do not share your card information with anybody — in fact, your bank will never ask for your pin number or password.

The Debt Panel is a weekly column to help readers tackle their debts more effectively. If you have a question for the panel, write to [e-mail]