UAE investors cannot let their guards down on cyber-delivered scams

11 Mar 2021

Anti-virus software alone will not help protect users against malintent

‘There is no free lunch…’ is the most relevant remark in the context of making investments.

Even a single basis point being offered over and above returns from a relatively low-risk investment like a bank deposit comes with additional risk. Hence, promises of high return with low risk are a fallacy. Fraudulent investment opportunities can be safe guarded against by being aware of tactics used by perpetrators such as:

* Cold calling, ie., a sales contact which has not been requested for;

* Fake bank emails/phishing, which are essentially unsolicited emails asking for bank account details, PIN, important financial information;

* Ponzi schemes, which are fraudulent investment schemes that aim to separate investors from their own money;

* Lottery scams, which typically involve an unexpected email advising that a prize has been won and which can be availed of for a paltry investment; and

* Boiler room scams, which include the attempt to sell worthless shares at inflated prices.

Experienced investors learn to look out for common red flags, which include:

• It all sounds too good to be true.

• A promise of high returns is more likely untrue and should raise a red flag.

• Investments entail risk and the promise of guaranteed returns with relatively low risk is unworkable.

• Be wary when there is a pressure to buy right now for once-in-a-lifetime opportunity with immediate deadlines.

The UAE government has made available several resources to find out more information or to make complaints about scams/fraudulent investment proposals. They are:

1. Dubai Financial Services Authority (DFSA)

2. Securities & Commodities Authority (SCA)

3. Central Bank of the UAE

4. Dubai Police

Consumers today face more investment choices than ever before, but this comes with associated risks that they need to understand and work around. In today’s context, the substantial increase in people working from home present more opportunities for cyber criminals to exploit investors.

Consumers and the businesses in the UAE suffered more than 600,000 phishing attacks at the height of COVID-19 19 according to a report released by Kaspersky in August. More than 2.5 million phishing attacks were detected across the Middle East just in the second quarter of 2020.

Since most people in the UAE are expatriates and may not know which brands are legitimate, it makes them vulnerable. The right approach would be to look at legitimate investment choices by considering options that will build wealth overtime. Self-discipline like paying attention to email addresses and looking out for misspelling can greatly reduce gullible investors from making fraudulent investments.

Hence, if someone is writing to you as a representative of a regulated financial firm, make sure the email is not from a Gmail, Hotmail or Yahoo personal account. Cryptocurrencies and other digital currencies have taught people that you may lose money quickly. The UAE population is very digitally aware having significant access to information in the public domain - hence the need is to always remain vigilant.


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