The discovery last week of another bogus investment scheme using Dubai International Financial Centre (DIFC) as a cover to trick investors out of money has again brought the issue of security to the fore. IT Weekly looks at what can be done to stop e-fraud.
The discovery last week of another bogus investment scheme using Dubai International Financial Centre (DIFC) as a cover to trick investors out of money has again brought the issue of security to the fore.
looks at what can be done to stop e-fraud.
In February, David Knott, chief executive of the Dubai Financial Services Authority (DFSA), warned that - following the busting of an internet fraud ring in the emirate - other fraudsters were increasingly likely to target the Middle East.
"The internet has added a wonderful new dimension to our daily lives," he said then in a statement. "But it has also opened up new opportunities to prey on the public."
His words proved only too accurate last week as the DFSA reported that less than two months after that discovery it had uncovered a second bogus investment scheme. Dubbed the Euro-America Index, the scheme aimed to trick investors into parting with their cash by faking an alliance with a financial organisation in Dubai.
In this case, the Index, hosted by firms in the US, claimed to have a global trading centre in Dubai and referred to the Dubai International Financial Centre (DIFC); a claim that turned out to be false.
Following an investigation, the DFSA succeeded in obtaining an injunction against the operators of the scheme from the DIFC court, which led to the removal of the DIFC from the scheme's web site.
A third internet-related scam, meanwhile, details of which are yet to be revealed, is also under investigation, the DFSA has revealed.
While quick to praise the DFSA's swift action to stop this latest scheme, Knott also warned investors to be on their guard.
"Investors must exercise extreme caution when they view sites on the internet, be sure to obtain confirmation that the organisation is licensed and obtain independent financial advice before parting with their money," he said, adding that "we are starting to see an increased trend in these types of e-fraud in the Middle East."
This latest incident follows on from an attempted hacking attack on web sites operated by Dubai eGovernment in February, which led to a number of sites being taken offline temporarily.
In March, Symantec's latest internet threat report suggested that the UAE has become the source and target of the most web security threats in the Middle East.
So are we experiencing a cybercrime wave here in the UAE? Kevin Isaac, regional director for MENA at Symantec, is quick to point out that this most recent scheme was a case of "basic fraud", albeit one that utilised the internet.
"Fraud or e-fraud involves someone manipulating the way you think in order for you to give them money," he said. "Cybercrime is different in that it involves technology in the background. Cybercrime is people stealing your password or being able to hack into your system."
Unfortunately, as Niall Coburn, director of enforcement at the DFSA, is quick to point out, the growing international profile of Dubai - and also other financial centres in the region, such as Qatar - means that we are only going to see more of such incidents, however you want to classify them.
In terms of what can be done to stop online fraud, at the moment regulatory authorities such as the DFSA can only do damage limitation, tracking down the fraudsters once a fraudulent activity has been discovered, due to the relative ease with which fraudsters can set up a web site, according to Coburn.
What is needed, he says, is a better system of registration that would make it easier to trace fraudsters.
"At the moment, to register for the internet, you don't need anything," he said. "There should be some international requirement before a person is allowed to place a web site online internationally."
Coburn said organisations such as the new urgent response team recently set up by the TRA in the UAE should go some way in helping to crack down on internet fraud, but claimed in the meantime authorities were somewhat handicapped.
"We are given the tools to fight 21th century crime with legal principles that were developed in the 18th century and it is just not effective," he warned. "We have to develop tools and skills and laws to be able to deal with 21st century crime."For all the latest tech news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.