UAE: Are Banks Legally Required to Compensate Customers for Losses from Credit Card Scams?

Question: I recently lost money in a banking scam, and the bank has determined that I am at fault for entering my credit card details on a suspicious website. In situations like this, is the bank legally required to refund the lost amount? What legal options do I have in this case?

Answer: In the UAE, hacking or fraud involving e-payment transactions is a criminal offense, punishable by imprisonment and/or fines ranging from Dh200,000 to Dh2 million, as per Article 15(2) of the Federal Decree Law No. 34 of 2021 on Cybercrimes.

This applies to activities such as forging, cloning, or capturing credit card data without authorization. Financial institutions are also required to educate consumers on protecting themselves from financial crimes under the Consumer Protection Regulation, issued by the Central Bank of the UAE.

Banks must maintain up-to-date security systems and may be required to compensate customers for financial losses caused by cybercrimes, provided the loss was not due to the customer’s gross negligence or fraudulent actions. If the bank determines your loss was due to negligence on your part, they may not be obligated to refund the money.

If you believe the bank’s decision is unjust, you can file a formal complaint for investigation. If the matter remains unresolved, you can escalate it to the Central Bank of the UAE or report the incident to the police, submitting all relevant evidence and transaction details.

News Source: Khaleej Times