Khaleej Times, Sun, Aug 11, 2024 | Safar 7, 1446
UAE: Can bank customers recover money lost in unauthorised card transactions?
Emirates:
Question: My credit card was recently used for unauthorised purchases,
and I had it blocked. I spoked with my bank, however, they suggested that I
might have entered my card details on a fraudulent website. I'm always careful
when it comes to entering my card details on websites. My question is: Is the
bank liable to return the money I lost? Especially since the loss wasn't due to
any negligence on my part.
Answer: Hacking e-payment transaction apps or websites is a criminal
offence and can result in imprisonment and/or huge fines for an individual or
groups involved in such activities. This is in accordance with Article 15 of the
Federal Decree Law No. 34 of 2021 on Countering Rumours and Cybercrimes Related
to Hacking E-Payment Instruments, which states,
“Whoever forges, clones or copies any credit card, debit card, or any e-payment,
or captures its data or information using any of the ITE ISs shall be punished
with imprisonment and/or a fine of not less than Dh200,000, or more than Dh2
million.”
The same penalties shall be imposed on whoever:
1. Makes or designs any ITE or software with the intention of facilitating any
of the acts stipulated in Para. (I) of this Article.
2. Uses without authorisation any credit, electronic, or debit card or any other
e-payment instrument, or any of its data or information with the intention of
obtaining for himself or third parties any funds or properties of others, or to
utilise the services made available to third parties by these cards or
instruments.
3. Accepts using these forged, fake, or copied cards or e-payment instruments or
data seized or obtained illegally despite being aware of their illegality.”
Furthermore, the financial institutions in the UAE are obligated to educate
their customers and the the public about financial crimes. This obligation is
under Clause 6.2.2.6 of the Consumer Protection Regulation issued by the Central
Bank of UAE through its Circular No. 8 of 2020 to all licensed Financial
Institutions in the UAE, which states, "Licensed Financial institutions must
demonstrate they have carried out sufficient consumer awareness activities
related to educating consumers of the need to protect themselves from financial
crime."
The financial institution in accordance with clause 6.2.2.5 of Consumer
Protection Regulations of Financial Institutions must maintain up-to-date
security systems and be prepared to implement new cyber security strategies as
needed. This ensures they can effectively protect against evolving threats.
“Licensed Financial Institutions must ensure their security and protection
systems are updated and have the capacity to develop and adopt new approaches to
cyber security as required.”
In addition, financial institutions may have to compensate their customers
in case of any financial loss to the customers due to financial crimes.
However, financial institutions are not liable to pay compensation for
financial loss arising out of financial crimes if it is due to gross
negligence or fraudulent behaviour of the customers. This is in accordance
with Clause 6.2.2.4 of the Consumer Protection Regulations of Financial
Institutions, which states, “Licensed Financial Institutions must compensate
consumers in a timely manner for financial losses and expenses resulting
from financial crimes, misappropriation, cyberattacks and misuse of assets
and information unless it can be proven that the loss was due to the gross
negligence or fraudulent behaviour of the Consumers."
Based on the aforementioned provisions of law and your statement that you
have been careful with entering your card details on any website, the bank
may be held liable to compensate its consumers for losses and expenses
caused by financial crimes, cyberattacks, or misuse of assets and
information, unless the loss is due to the consumer's own gross negligence
or fraud.
If you are sure that you did not engage with any fraudulent sites and can
also provide proof that the said loss was not due to your negligence, the
bank may be liable to compensate you for the loss. You may file a formal
complaint with your bank, which may then conduct an investigation into the
financial crime. Furthermore, you may have to file a police report and
provide transaction details and evidence. If you are not satisfied with the
bank's resolution, you can escalate your complaint to the Central Bank of
UAE.