The Dubai Financial Services Authority is cautioning the regulated financial services community about a hike in hoaxes and other fraudulent activity since the onset of the world pestilence.

One type of deceit that is on the increase, according to the regulator, is the well-known advance-fee fraud. This type involves fraudsters persuading people to advance small amounts of money in the hope of obtaining access to a significantly larger amount. The small amounts of money are for multifarious non-existent advance fees such as customs, duties, taxes, or even bribes. Nobody actually gains access to the large amount of money.

In a recent example of an advance-fee fraud, a gang used the DFSA’s logo impersonated its executives. The fraudsters contacted someone from South Korea and told him that he had won a prize. They sent him a document that also said this. They told him that he would have to pay US$2,820 (approximately 10,400 dirham) for a Certificate of Fund Origin in order to collect it. He did so and obtained a fake official receipt which also bore the DFSA’s logo. The hapless Korean then tried to present the prize document to the DFSA’s reception desk to collect his prize, only to be told that the document was a fake.

Another common type of scam occurs when a real DFSA-licensed financial firm is cloned; the scammers steal the identity of the company by creating a fake website which looks identical to the real one, but contact details are subtly different. Emails, messages and telephone calls from investors are diverted to the scammers and not the genuine firm. The scammers then ask to meet the investors outside an office, such as a coffee shop, in order to make them seem legitimate. However, scammers who clone licensed firms often make mistakes on their websites and many of these mistakes are easy to spot.