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13 December 2019

Charles Russell Speechlys secures landmark banking litigation win for client in Dubai

Charles Russell Speechlys' litigation team in Dubai, led by Ghassan El Daye, has secured a significant victory for a client who was subjected to SIM card fraud by a bank employee and outside accomplices, losing nearly 5 million Dirhams in life savings.

The client was based outside of the UAE at the time the fraud was committed, only to discover upon his return that his bank account had been completely emptied. An employee at the bank had leaked some of the client’s personal information including the phone number registered with the bank, to fraudsters, who were then able to request a SIM card change from the local telecommunications authorities. Neither the bank nor the telecommunications authority took additional security steps to identify who was requesting the changes. The fraudsters were then able to change the PIN code used by the client for his bank account, which in turn enabled them to access his account directly and steal all the funds saved with the bank.

Upon lodging a civil case in Dubai Commercial Court, the Charles Russell Speechlys team argued that the bank was responsible for the client’s losses, after the bank’s employee illegally shared the client’s private details. The Court ruled in favour of our client, and this ruling is the first of its kind in the UAE. There have been many cases involving SIM swap fraud previously; however, banks were not held liable in the past.

The team’s strategy involved bringing in technical experts who helped demonstrate that such a fraud could not have been committed had the bank not failed to protect its client’s personal information registered with the bank. The case is being hailed as a “wake up call” to banks and telecoms companies to introduce tighter security measures and take greater steps to protect their customers’ personal information used to open and register accounts or transact services. With this legal victory, the client will be able to recover his life savings.

Ghassan El Daye, the Charles Russell Speechlys partner who led the team, commented:

"This case is significant because it is the first time a bank is held liable for such losses. It demonstrates the urgent need for the banking sector to tighten up security measures, monitor the use of PIN codes more rigorously and carry out more extensive background checks on employees. Last but not least, telecommunications companies must also impose tighter controls related to SIM card replacement applications. It should not be allowed to issue a replacement SIM card and change the number and registration details with the bank, unless the holder of the card appears physically at both the bank and the telecommunications provider offices with original official documents as proof of identity.”