Electronic fraud is one of the new forms of cybercrime that has widely spread recently and has become a threat to many members of society, especially after the increasing use of modern technology in the fields of communications, management, banking, and finance, which constitute a fertile environment for the organized work of electronic criminal gangs.
The prevalence of these crimes is evident from the increasing number of reported cases and related studies.
The UAE stands out as one of the most targeted countries in the region for cybercrime, largely due to its leading position in internet usage, digital technology adoption, and electronic readiness.
As the country advances towards a knowledge-based economy and fosters a digital culture, integrating electronic transactions across various governmental, semi-governmental, and private sector organizations, it inadvertently becomes more susceptible to cyber threats. This vulnerability is amplified by the country's prominent economic status and open economic environment, which make it an attractive target for cybercriminals. Therefore, it is crucial to intensify both official and unofficial efforts to combat the various forms of electronic fraud.
Top of Form
Bottom of Form
Electronic fraud as defined by the law in the UAE:
Electronic fraud: Every unethical act or practice in which electronic technologies are used with the aim of achieving illegal financial gain, or seizing the funds of others by means tainted by deception.
These acts are underpinned by three fundamental elements:
- The Material Element: This refers to the tools or methods used to commit fraud, including the technology and techniques employed to deceive victims.
- The Location or Subject of the Crime: This encompasses the setting or context in which the fraudulent activities occur, such as specific platforms, systems, or financial transactions targeted by the perpetrators.
- Criminal Intent: This involves the deliberate intention to commit fraud, reflecting the perpetrators' conscious and purposeful aim to deceive and exploit others for financial gain.
The provisions governing electronic fraud in the UAE are encompassed within the UAE Law on Combating Rumors and Electronic Crimes, established by Federal Decree Law No. 34 of 2020. This comprehensive legislation addresses various aspects of electronic crime, including the prosecution, and penalties associated with electronic fraud.
According to Article 40 of this law, the penalties for electronic fraud are imprisonment for up to one year and a fine ranging from a minimum of 250,000 dirhams to a maximum of 1,000,000 dirhams. Alternatively, the court may impose either the imprisonment or the fine independently.
The crime of electronic fraud differs from the crime of ordinary fraud in that the latter is carried out through the perpetrator's use of fraudulent methods, taking a false name, or impersonating an incorrect capacity through the information network, an electronic information system, or one of the information technology means.
Financial fraud is one of the most prevalent and widely recognized forms of electronic fraud, in which victims are lured by creating fake websites, or by tracking their financial transactions. This type of fraud involves the unlawful manipulation or misappropriation of financial assets through various online platforms and technologies. Fraudsters steal users' money, exploit their bank balance in suspicious deals, or conduct purchasing transactions without their consent.
Here are 6 methods of electronic financial fraud:
- Friendly Fraud: This occurs when the fraudster manipulates the situation to appear as the victim rather than the perpetrator, often by disputing legitimate transactions or exploiting return policies.
- Identity Theft: In this scenario, the fraudster unlawfully obtains and uses a person's private data, such as personal identification or financial information, to make unauthorized electronic purchases or force the victim into completing suspicious transactions.
- Clean Fraud: Clean fraud involves the use of authentic data from stolen credit cards or account holders. The fraudster employs real, stolen information to execute fraudulent transactions, making the activity harder to detect.
- Affiliate Fraud: This type of fraud occurs within affiliate marketing networks. The fraudster registers on popular affiliate sites and uses various deceptive techniques to manipulate visitor traffic, alter site content, and tamper with user accounts and balances to illicitly earn commissions.
- Triangulation Fraud: This scam involves three key components: the victim, a fraudulent website, and compromised financial statements. The fraudster lures the victim with enticing offers on a fake online store, and by exploiting the victim's trust, manipulates financial records to complete the scam.
- Merchant Fraud: Here, the fraudster sets up a fake online store with attractive offers and discounts to lure victims. Once a buyer makes a purchase and submits payment, the fraudster collects the funds but fails to deliver the purchased products.
Recognizing that traditional fraud methods have become increasingly well-known and exposed; fraudsters continuously adapt their approaches. They often engage in detailed and sophisticated research to tailor their schemes to various target demographics. They meticulously study individuals to uncover specific details such as nationalities, ages, and behavioral patterns. This information allows them to craft highly targeted fraudulent strategies that cater to the unique characteristics and vulnerabilities of different groups.
For instance, fraudsters might analyze cultural preferences and common practices within a specific nationality to design scams that appear more authentic and convincing. They might consider age-related factors, such as the types of technology used or generational attitudes towards online security, to select the most effective tactics. Additionally, understanding the psychological tendencies and decision-making processes of different age groups or cultural backgrounds enables them to exploit their targets more efficiently.
In a forthcoming article, we will explore comprehensive strategies for safeguarding oneself against the risk of falling victim to electronic fraud. This will include practical prevention tips. Additionally, it will guide the legal avenues available for victims of electronic fraud. We will detail the steps to take in the aftermath of a fraud incident, including how to report the crime, seek compensation, and protect one's rights through legal channels.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.