The Debt Panel: 'My bank says I owe $54,450 on a card I cancelled in 2009'

The Abu Dhabi resident is considering legal action against the lender, which claims the credit card was never cancelled

Nick Donaldson / Getty

In 2008, I had a credit card with a limit of Dh5,000 ($1,361). I cancelled the card in 2009 and paid it off in full. The bank also gave me a clearance letter confirming that the card was cancelled and the debt paid.

Since the Al Etihad Credit Bureau was established in November 2014, I have generated a yearly report to keep track of my credit score. However, when I received my AECB report in October 2021, I noticed that the bank reported that the card had been active since 2020 — 11 years after it was cancelled.

I contacted the bank and informed them that the card had been cancelled. They checked their system and could not find an active card. I also wrote a letter to the bank confirming this and stated that I did not have any outstanding liabilities. Unfortunately, I am unable to find the clearance letter the bank issued in 2009.

The bank now claims that the card was never cancelled and will not close it until I provide it with the clearance letter from 13 years ago.

Worse, the bank claims that the card now has an outstanding balance of Dh200,000 ($54,458) because of late fees and compounding interest and is demanding that I settle the amount in full. It also says that it is not linked to my Emirates ID as the bank’s systems were upgraded in 2018.

In addition to this, the bank has ruined the good credit score that I have been building for the past seven years and it has dropped from 850 to 300 because of this issue.

I have lodged a complaint with the bank branch, call centre and customer service but it has fallen on deaf ears and there is no solution so far.

What should I do? I am thinking of filing a lawsuit against the bank as they also advised that even if I settled with them, they would continue to report the issue to the AECB and would not change it. NH, Abu Dhabi

Debt panellist 1: Steve Cronin, founder of DeadSimpleSaving.com

I am sorry to hear about the faceless bureaucracy you have had to deal with. Unfortunately, you may still have an uphill struggle ahead of you.

First, make sure you have an account with another lender in the UAE and transfer your money away from this bank as soon as possible. However, if you have another outstanding loan or card balance, this could be more difficult.

Moving your cash away from the bank prevents them from freezing part or all of the cash in your account if this situation escalates. I would recommend that you do not pay the fictitious Dh200,000.

You need to document all your interactions with the bank since October 2021, including email replies, the name of the person you spoke to and a summary of what they said. For example, they said at one point they could not find an active card.

You also need to go back through all paper and electronic records and try to find some evidence of you paying off the card in 2009. Do you have a statement showing that you made a transfer of Dh5,000? I realise this is a tall order but it is also unreasonable for the bank to expect you to keep correspondence for more than a decade.

To your advantage, you have the AECB reports over many years and I am sure that this will help you in your discussion with the bank and the bureau

R Sivaram,
executive vice president and head of retail banking products at Emirates NBD

You need to make sufficient fuss that you are escalated to a manager senior enough to make a decision and override whatever the systems and protocol might say. At the same time, take preliminary legal advice to see where you stand from a legal perspective.

Try going to the bank's head office to talk to someone more senior there. If that fails, ask to speak to a manager on the phone or call several times until you speak to someone more helpful. Make the bank aware that you are considering legal action against it. Ask them to which person your legal correspondence should be addressed — this should show them you are serious.

What proof do they have that you did not pay? Do they have bank statements or card balance statements from 2009? Do they have copies of correspondence from 2009/2010 warning you that the card had not been paid off and that fees were being incurred? I suspect they don’t.

Also, inform them that you will be escalating the situation to the UAE Central Bank's Consumer Protection Department. You can contact them 30 days after the bank has failed to provide a response to your satisfaction — so you can contact them now via their website, phone or branch.

You can also try to have your score corrected via the AECB. Fill in the form here and supply whatever documents you have, such as the message from the bank saying no such active card could be found. Banks are required by the regulator to respond within 10 working days — and just maybe the issue will go away.

Debt panellist 2: R Sivaram, executive vice president and head of retail banking products at Emirates NBD

It is unfortunate that you are facing this difficulty and I empathise with your situation.

I would recommend that you reach out to a senior officer at the bank and share full details of the case, including the fact that, until 2020, this card was not reflected in your credit report.

In addition, you could approach the AECB and explain your situation to them. Given that they would have a history of your credit performance, they could potentially help you resolve the issue with your bank.

To your advantage, you have the AECB reports over many years and I am sure that this will help you in your discussion with the bank and the bureau.

Filing a lawsuit could be a long and tedious process and I would recommend you try the above approach and only plan to obtain legal recourse as a last resort.

It is important in the future that you retain all important correspondence with your bank, such as your clearance letters. I wish you the best at arriving at a suitable solution to the issue.

Debt panellist 3: Carol Glynn, founder of Conscious Finance Coaching

You are clearly a financially responsible individual and this is, no doubt, a very frustrating and worrying situation to be in.

You mention you have raised various complaints. If not already done, I would suggest lodging a formal complaint with the bank's complaints department.

You will find the email details to lodge an official complaint on the bank's website. This is a necessary step before you can take the case further with the UAE Central Bank.

Continue to follow up on your complaint with senior management within the bank. It is important that you also ensure you document all communications and provide any documents that prove you cancelled the credit card in 2009.

The bank has 30 days to negotiate a resolution. If you do not have a satisfactory resolution within that time frame, you can then raise a case with the central bank's Consumer Protection Department.

Provide all documents you have, including details of all conversations with the bank. Ideally, this process will resolve the issue so you do not need to file a lawsuit against the bank.

If you do begin legal action, note that you will have to bear the costs and the issue could take time to resolve.

When you have a satisfactory resolution with your bank, your next step is to request that it updates its records with the AECB.

The Debt Panel is a weekly column to help readers tackle their debts more effectively. If you have a question for the panel, write to [e-mail]