New ‘virtual operations’ room to fight financial fraud

The Public Prosecution has officially inaugurated a virtual operations room dedicated to receiving reports of such crimes. A staggering 98 percent of funds resulting from financial fraud are channeled within local banks, posing a formidable challenge to the recovery of pilfered funds.

Over the past 15 months, victims of cyber theft in Kuwait reportedly lost approximately 50 million dinars, as per circulated data spanning from January 2022 to last March.

The newly established operations room, functioning 24/7, operates as a specialized “WhatsApp group,” featuring members from the Public Prosecution, the Anti-Money Crimes Department of the General Department of Criminal Investigation and Banks, the Kuwait Banks Union, and the Communications and Information Technology Authority (CITRA).

The sources detailed that this collaborative effort enables a broader capacity for banks to trace illicit funds swiftly and efficiently, preventing them from reaching the final destination of the hacker.

Each bank will designate specific personnel for this purpose. The process initiates with the customer notifying their bank of unauthorized withdrawals, prompting direct communication with the “Chamber Group.” The second local bank involved is then identified, and the Public Prosecution promptly grants permission for the bank to freeze the specified amount, effectively obstructing the illicit transfer of funds.

Hackers predominantly concentrate their operations on circulating pirated funds between local banks rather than transferring them directly to external accounts. This trend is attributed to public skepticism regarding external financial links, making local payment links appear more trustworthy. The delay in Public Prosecution permissions to freeze fraudulent amounts, typically taking approximately 72 hours before the establishment of the operations room, provides hackers with an opportunity to camouflage their activities across multiple banks.

In some instances, hackers opt to withdraw funds “cash” using stolen bank cards, either by direct cash withdrawals or by utilizing representatives, some of whom may be complicit employees. While the effectiveness of the operations room is expected to be more pronounced in freezing fraudulent funds within Kuwait’s internal banking network, the initiative aims to act swiftly against transfers abroad or online purchases. In cases involving international transactions, the Chamber can activate urgent measures locally by freezing the amounts immediately, contingent on the speed of customer notification.

The Public Prosecution urges anyone falling victim to such operations to promptly inform their bank, allowing authorities to take immediate measures to protect the affected funds.