In a ‘Loan Scam’, a dubious lending company would ask victims to first deposit a processing fee to secure a loan
Online scammers have become busier nowadays, as new forms of scamming emerge. One latest fraud is called ‘loan scam’, where a dubious lending company would ask victims to first deposit money as a processing fee to secure a loan, then would demand another payment to release the fund.
This just happened to Cristy, 35, a Filipina expatriate who works as a shift supervisor at a restaurant in Dubai.
She told the press “I saw a sponsored ad on Facebook giving quick collateral-free loans to OFWs (overseas Filipino workers). I grabbed the opportunity because there was an emergency back home and I needed money.”
Cristy reached out to the alleged lending company and was told to deposit P20,000 (about Dh1,250) as processing fee and no other requirements were required.
She said: “I borrowed money from a friend because I needed to secure a quick P200,000 loan (Dh12,500). There was no other requirement, like salary certificate or bank statement – so I thought ‘wow this is great’ – and they promised quick loan release.”
The lending company immediately confirmed receipt of the ‘processing fee.’
“But after a couple of days, I got a notification that my loan was cancelled due to ‘low credit’,” said Cristy, adding: “I was told that I had to deposit another P50,000 (Dh3,125) to remove the low credit rating, and then the P200,000 would be released immediately, including the P50,000 deposit.”
Cristy ended up paying P70,000 (Dh4,375) and she received nothing. The loan officer blocked all her calls and did not respond to any of her messages. “All our conversations were done via Telegram and I could no longer reach the loan officer,” she ruefully said.
“I was enticed by the promise of quick loan release and collateral-free arrangement. It was late when I realised it was a scam,” Cristy added.
‘Busy scammers’
Attorney Barney Almazar, director of corporate-commercial department at Gulf Law, who handles cases like Cristy’s, told press “scammers have become busier and more aggressive looking for victims nowadays.”
“Our cybersecurity and financial fraud team have been assisting about 20 victims on a monthly basis the past five months,” he said, noting that there is “a troubling increase in online scams that are preying on one’s trust and financial security.”
“These scams range from fraudulent loan processing to enticing part-time job offers via messaging apps like WhatsApp. Alarmingly, we have one client who reported a loss of more than half a million dirhams to such deceitful schemes,” he added.
Almazar said victims of fraudulent online loan offers are now emerging.
“Scammers, masquerading as legitimate agents of banks, promise attractive loan terms and quick approvals even to those unemployed or on tourist visas. They demand an upfront ‘processing fee’ before the loan can be finalised. Once the fee is paid, the scammers vanish, leaving the victim nothing but more debts,” he noted.
Dh534,800 gone in 2 days
Almazar said another prevalent scam involves fake job offers circulated through WhatsApp and similar messaging platforms. These messages promise high incomes for minimal work, such as completing simple tasks or participating in surveys.
Victims are often required to provide personal information or pay a fee to get started. Once the fee is paid or the information is given, the scammers disappear, often leading to identity theft or financial loss.
“A recent case involved an Abu Dhabi resident who got a WhatsApp message from an alleged market researcher to do a simple survey and subscribe to a YouTube channel for an initial payment of Dh300. He did several so-called tasks and ended up transferring Dh534,800 to 16 UAE bank accounts in a span of two days. He was not able to recover this money,” Almazar added.
“The victim reported the matter to authorities but the bank accounts where the funds were transferred have been depleted,” he added.
Scammers promise Dh800 daily income
Last few month, deferent news reported about scammers who were targeting UAE residents by creating WhatsApp groups to do various tasks to earn a passive income of up to Dh800 daily by liking, following, and commenting daily on various YouTube posts.
Among all those a reporter was added in one of the groups using the logo of a real marketing company to make it appear legitimate. The KT reporter was actually added to two similar groups on the same day, proving that the scammers have aggressively ramped up their game of recruiting people.
Also last month, exposed a part-time job scam, where, instead of earning extra money, one of the victims – a Dubai hotelier – ended up losing her entire life savings of about Dh66,000.
Legal perspective warning
Almazar underscored: “From a legal standpoint, these scams not only represent significant financial fraud but also pose severe risks to personal security and privacy. Everyone should exercise caution and scepticism towards unsolicited offers that appear too good to be true.”
Here are some legal and practical steps to protect oneself against online financial predators, according to Almazar:
- Verify sources – Always verify the legitimacy of the financial institution or company offering loans or jobs. Contact them directly through official channels before making any payments or divulging personal information.
- Avoid upfront fees – Be highly cautious of any loan offers requiring an upfront fee before approval. Legitimate lenders typically deduct processing fees from the loan amount rather than requesting advance payment.
- Report any suspicious activity – If you receive any suspicious messages or offers, report them immediately to the Police Cybercrime Department or the Telecommunications Regulatory Authority (TRA). Prompt reporting can aid in tracking and shutting down fraudulent operations. Contact your bank immediately if your account has been compromised.
- Avoid clicking links – Be extremely cautious about clicking on links in unsolicited messages. If you are unsure, navigate to the official website directly through your browser.
- Use two-factor authentication – Enable two-factor authentication (2FA) on all financial accounts and services. This adds an extra layer of security, making it more difficult for scammers to access your information.
- Monitor financial statements – Regularly review your bank and credit card statements for any unauthorised transactions. Promptly report any suspicious activity to your financial institution.
- Update security software – Ensure your devices have the latest security updates and antivirus software to detect and prevent malware infections.
- Learn and inform – Stay informed about common scam tactics and educate your family and friends. Awareness is a powerful tool in preventing fraud.
