Credit card fraud in UAE projected to rise 20%

Credit and debit card fraud is set to cost the UAE banking industry $54 million (Dh198.2m) this year – a rise of 20 per cent over 2009.

The rise, estimated by a senior official at a financial services company, is due largely to the ongoing economic crisis.

And the trend is being mirrored across the region, where there is a high number of expatriate workers.

Asanka Amarasekara, National Head of Fraud Control and Authorisation at Dunia Finance in Abu Dhabi, said: "As far as the UAE is concerned, we've been observing a year-on-year loss of $45m and due to the crisis, it is expected to increase by 20 per cent. This is what is estimated. "According to the figures from international payment card schemes, the estimated worldwide loss due to fraud on credit cards stands at $10 billion this year," he told Emirates Business.

The figure included losses on credit, debit and charge cards due to fraud and does not include defaults or retail loans.

Bharat Raigangar, Country Head – Security and Fraud for the Middle East and South Africa at Royal Bank of Scotland, said there had been an increase in card fraud. "There is a shift and it's an upward trend in the UAE but that is happening across the world," he said. "Having said that, I would like to stress it is not necessary that fraud is happening in the UAE. It may be coming from outside.

"For example, a credit card is issued in the UAE but the fraud on that card happened in Malaysia. In such instances, the customer can complain to the bank after the transaction."

Amarasekara said there had also been a sharp rise in the number of documents forged by customers, while applying for loans. This was due to a lack of credit in recent months.

"Since the beginning of the year, we've seen a 60 per cent rise in [forged documents] and this is not only in the UAE, but also across the Middle East.

"The fraud trends are quite similar across the Middle East as there are a lot of expatriates in the region.

"Due to the crisis, many people in the region are planning to leave and go back to their home countries without paying their dues," he said. "In such cases, we have strong agencies and strong connections in each country to track down such offenders and take collection or legal action against them."

Despite the rise in cases of fraud, the UAE is ahead of most developing countries in tackling the problem.

According to Dunia, technology can play a very important role in minimising fraud in the country.

"We have implemented a state-of-the-art fraud detection system called Fits to detect and prevent card fraud," said the company in an e-mailed statement.

Dunia Finance is a partnership between Mubadala, Al Waha Capital, AA Al Moosa Enterprises and Fullerton Financial Holdings.

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