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28 March 2024

DFSA issues fraud alert

DFSA warns that the fraudulent firm is not authorised or licensed by DFSA. (File)

Published
By Staff

The Dubai Financial Services Authority (DFSA) late on Monday alerted public and financial services community to an increase in fraudulent activities by people claiming to be associated with or agents of the regulator.

The conduct involves people falsely impersonating companies and offering loans and investments to potential victims. The terms of these fictitious investments are usually quite favourable to the victim and carry the promise of swift finalization, the regulator said in an alert.

The DFSA has been notified of recent conduct involving individuals who claim to be working for or as agents of the DFSA. These individuals are using letters that bear the DFSA letterhead.

Having agreed to the terms of the loan or investment, the victim is then told that they need to be registered with the DFSA, or that a fee is required in return for regulatory approval.  The fee may also be called a tender fee.

False DFSA letters, bearing the DFSA letterhead are used by the individuals to legitimise the fraudulent activity. These letters also name and assign to the victim a licensed agent of the DFSA. The victim is instructed to deal directly with this licensed agent and to send all payments to the DFSA through these agents.  These false letters also instruct the victim not to contact the DFSA directly.

The email details provided for the fictitious licensed agents are usually web based email addresses, such as Yahoo, Gmail or Hotmail. 

The DFSA said it does not levy any fees in respect of loans or projects, also not licenses or utilises agents; and does not communicate via private email addresses (eg: Gmail or Hotmail).

The DFSA warned the public not to deal with people who charge advanced fees for the provision of services on behalf of the DFSA. 

It informed public and financial services community to check the DFSA and Dubai International Financial Centre’s Public Registers to confirm the authenticity of the firm when deal with firms or individuals claiming to be authorized by DFSA or any associated in any way with the DFSA or DIFC..

The DFSA said it does not charge any fees to the clients of an authorised firm or Individual. The DFSA, therefore, strongly advises investors to be wary of firms who claim to be charging fees which are payable to the DFSA.

The regulator also said it that it does not approve transactions made by authorised firms or Individuals on behalf of clients.  If anyone receives a DFSA letter advising that a transaction needs to be approved by the DFSA and/or advising to transfer a sum of money to a third party to facilitate an approval, then do not respond to the communication and report the incident to the DFSA: