Kuwaiti Banks tackle delays in closing accounts of deceased amid fraud concerns

Kuwaiti citizens have raised concerns over the lingering presence of deceased individuals’ accounts, revealing potential vulnerabilities to financial fraud and hacking risks. Despite the assumption that a person’s bank account should close shortly after their demise, the process often takes months, leaving room for continued withdrawals, reported Al-Rai Daily.

Traditional methods, such as informing the deceased’s family or monitoring death bulletins, remain the primary ways banks identify account holders who have passed away. Some banks, cautious of name similarities, prefer not to rely on death bulletins. This delay in updating account status poses a risk, allowing heirs to continue withdrawing funds, potentially leading to financial fraud.

Banks acknowledge the severity of the issue and are exploring ways to expedite the process. Some propose automatic links with the Ministry of Health or the Public Authority for Civil Information to regularly update deceased names. However, progress in this direction has been slow.

Aside from concerns about exploiting the accounts of the deceased, there’s a broader crisis related to the risks of exposing the accounts of deported expatriates without the banks’ knowledge. The lack of an official mechanism to provide banks with deportee names increases the risk of hacking and money laundering.

The Ministry of Interior has previously warned of criminal gangs exploiting the accounts of clients, especially deportees, for financial fraud. The timely update of residency permit statuses allows banks to take precautionary measures swiftly, limiting the chances of accounts being exposed to hacking.

Telecommunications companies face a similar challenge in obtaining deportee lists, leading to a delay in disconnecting phone lines. This delay has been linked to the phenomenon of fraudulent operations using local telecom numbers, deceiving victims with misleading financial payment links.

In an effort to address impersonation cases, the Central Bank of Kuwait has requested the Communications and Information Technology Commission (CITRA) to display the full name of the calling party on the phone screen for communications with legal entities such as banks and government agencies, aiming to enhance transparency and prevent fraudulent activities.