UAE bank warns of 'Magic Pen' fraud; how to avoid it

Banks in the UAE are warning customers not to fall prey to a new 'Magic Pen' method used by fraudsters.

“In our effort to provide you with an environment of safe and secure banking, we would like to inform you about a new 'Magic Pen' method used by fraudsters recently, posing as bank representatives to dupe customers,” RAK Bank said in a notice sent to customers.

“These fraudsters ask customers to complete the loan / credit card applications and provide a blank signed security cheque wherein the imposter fills up the details on the cheque in their presence using his magic pen.

“Subsequently, the details of beneficiary and amount in the cheque are altered since it was filled up with the magic pen, which allows the details entered to be erased without a trace.  The cheque is then cashed from various banks using third parties,” the notice said.

Emirates 24|7 spoke to an Indian businessman based in Ras Al Khaimah who has fallen prey to the 'magic pen' a fraud.

The businessman, who asked not to be named, claimed that he was approached by a person, who claimed to be representative of a local bank and offered him the much-needed credit facility.

“The caller introduced himself as a bank representative and took all the documents, including a ‘security cheque’ for Dh100,000 and asking me to keep a minimum balance of Dh100,000 in my bank account.

“I gave the cheque in the bank’s name, but the amount and beneficiary details were found to have been altered, allegedly using a ‘magic pen’,” the businessman claimed, adding that Dh98,000 had been withdrawn from his account.

A complaint has been filed with the Ras Al Khaimah police and an investigation is ongoing.

So how do you protect yourself? Here is what the bank states:

# Please ask the representative to identify himself and check his photo ID card issued by the bank.

# Do not issue a blank security cheque.  Please fill in all details in the cheque including name of the beneficiary (which should be the bank’s name) and amount with your own pen.

# Do not use the pens provided by the other party to fill in details of the cheque
# If in doubt contact the concerned bank on their land line and confirm that the representative indeed works for the bank he claims to represent.

Sim Swap

In April 2015, Emirates 24|7 reported that banks were advising customers about a new 'SIM Swap' fraud, asking them to keep their phones switched on at all times even when they are travelling.

In an email sent to its internet banking customers, RAK Bank had said the “SIM Swap” occurs when criminals fraudulently obtain a new SIM card with your existing mobile number, pretending to be you.

Once the SIM swap has occurred your phone will show an on-screen notification from your service provider, with the notification usually reading, 'SIM not registered'.

As soon as your mobile number is assigned to the new SIM card, the fraudster will receive all your calls and confidential banking SMS notifications which could include one-time passwords sent to you by the bank.

The fraudsters could use the information to access your account and conduct fraudulent transactions, the bank said, stating, “It was enhancing the security of banking transactions with customers now having to enter a telephone identification number when self-registering for mobile banking.”

Customers are advised that if one suspects a fraudulent SIM swap, they should contact the bank urgently to notify of the incident and contact Etisalat and Du immediately to inform them of the incident and visit their nearest outlet to restore their mobile services.

Through its Twitter account, Dubai Police has advised residents to type the bank website address into their web browser and never go to bank websites from a link in an email.