Fraudsters deposit ‘payment’ via online banking and then withdraw the cash within hours
UAE authorities have warned residents selling their cars online to be extra careful in dealing with potential buyers, as the police have uncovered a new scam that emerged in 2020, when Covid-19 struck.
The Dubai Police said they had received at least 250 reports from residents who had been duped into giving their vehicles to fraudsters who posed as buyers.
The gangs, found to be run by criminals who had entered the UAE on a tourist visa, had a common modus operandi: They target people selling cars online, strike a bogus deal, deposit the payment via mobile banking – and then they would withdraw the entire amount they had transferred after two hours. In some cases, cheques given as payments either bounced or turned out to be forged.
Sara Al Hamadi, a UAE resident, was one of the victims. “I put my Range Rover up for sale on an e-commerce website. Then after two days, I received a call from a GCC national who offered to buy the car for Dh230,000, which was the price I set on the ad.”
Al Hamadi then met the prospective buyer in person. “He told me that he would hand over 40 per cent of the selling price of Dh230,000 in cash. He promised to pay the rest of the sum through two post-dated cheques, which I can encash in over two months,” she said, noting that the man claimed to be a car dealer who had a good reputation in the market.
Just when Al Hamadi thought the deal was final, the buyer told her he couldn’t withdraw such large amount via ATM so he would instead transfer the money via his banking app. “I had no option but to agree to his proposal. I withheld the agreement to transfer the vehicle until he did the financial transaction. Unfortunately, the prospective buyer pulled a fast one on me. Though he deposited the sum, he withdrew it after two hours.”
The police confirmed that this withdrawal option is available in some banking apps. However, they warned that misuse of such feature is an offence punishable by one-year imprisonment and a Dh1-million fine.
Ameer Tambal, too, has been defrauded. He owns a car rental company and his business has suffered major reverses because of the pandemic. He was dependent on e-commerce platforms to put out advertisements of his vehicles, which usually cost Dh500 for each car.
“Three days after an advertisement was published, I received a call from a GCC national, who expressed his desire to buy three vehicles from me. He showed his intent and drove a hard bargain to lower the prices. We agreed that 50 per cent of the payment would be done via bank transfer, and the rest by cheque.
“Later, I realised that he withdrew my money two hours after the transaction, and the cheque was forged. I filed a complaint with the Dubai Police. But, soon, I came to know that the fraudster was not a resident of the UAE but had entered the country on a tourist visa,” he added.
Three gangs arrested
Captain Ahmed Suheil Al Samahi, director of Anti-Fraud Department of the Dubai Police, said over 250 reports of fraud were received last year. The fraudsters targetted car owners, who posted advertisements on Dubizzle, a buy-and-sell online platform in the UAE, and other similar e-commerce portals.
The Dubai Police have arrested three gangs, who were running organised rackets. They are collaborating with their Sharjah and Ajman counterparts to bust these gangs.
Officials of the Sharjah Police said fraudsters have adopted ingenious methods to deceive innocent people because of the Covid-19-induced financial woes. Police stations in the emirate received several complaints during the stay-home period, which was enforced last year due to the pandemic. Police authorities have warned the public not to deal with people whose identities could not be verified.
>> Bogus buyer gets in touch with a person selling a car online
>> He/she would with either agree to the price listed on the ad or negotiate
>> Once a deal is agreed upon, the scammer tells the seller that the payment (or a huge part of the amount) will be transferred via online banking
>> The fraudster then makes an online transfer and the seller will receive an confirmation that the amount is deposited
>> At this point, with the proof of online payment, sellers usually hands over the vehicle
>> Once the scammer gets the car, he/she withdraws the amount (usually within hours)
Know the law: On misusing mobile banking features
While some mobile banking apps offer users the option to withdraw a transferred amount within a certain period, the authorities have stressed that misusing such features is a crime.
Khaled Al-Mazmi, a legal researcher and a lawyer, explained: “If a person uses electronic means to defraud people, then the person can be booked under Article 11 of the UAE’s federal law that pertains to Combating Information Technology Crimes (Cyber Crimes Law). The law stipulates a one-year prison term and a penalty between Dh250,000 and Dh1 million.”
4WD seller finds out cheque he got was fake
Mohamed Al Amiri, another victim of a recent car theft, said he was ghosted by a buyer who gave him a forged cheque.
“I filed a report with the police about a year ago. But the legal dispute is yet to be resolved. Trouble started when I had put up my four-wheel drive for sale in an automobile auction. I was surprised after one of the car dealers registered at the auction. He offered to buy the vehicle at a higher value than the actual price, much to my surprise.
“He called me 30 minutes after the auction process and offered to complete the transfer process in a jiffy. This encouraged me further to close the deal,” he added.
But there was a sting in the tale.
“At the last moment when the deal was being sealed, he said Dh150,000, which the agreed amount for the sale of the vehicle, was not available with him. He promised me to pay Dh37,000 in cash and the rest of the amount in a cheque that can be encashed at any point in time. I readily agreed to his proposal,” he said.
“Soon, I discovered that I have been conned. The cheque was counterfeit. I tried calling his phone, but it was switched off. I had to file a report against him at a police station,” he added.