The Debt Panel: 'I lost my job and the bank refused my credit shield request'

The bank's collection department is now threatening the Dubai resident with legal action if he doesn't make a payment on his credit card

The main issue with credit card debt is that it has the potential to balloon into a substantial amount, says Philip King, head of retail banking at Abu Dhabi Islamic Bank. Steven Castelluccia / The National
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Related: More Debt Panel advice on credit shield insurance

I have a credit card from a bank in Dubai. My outstanding amount was Dh7,500 but last year, due to the pandemic, I lost my job and informed the bank immediately with proof of my termination.

As I have a credit shield worth Dh5,000, I requested the bank to use it and I would pay the remaining amount. However, they kept telling me to pay off the card in full.

In November 2020, the collection team told me I had to submit my job loss documents in person, which I did.

Then, in December, they sent me an email to contact the bank’s insurance department. I did this as well, but when they replied in January, they said they cannot help me.

I have since made a small payment towards the card and reduced the amount owing to Dh4,700, but they are now threatening to take legal action against me.

I followed the bank’s procedures and even though the credit shield is still active, they are not willing to help me. I still don’t have a job and I am not sure what to do. Can you advise me on the best way forward? SM, Dubai

Debt panellist 1: Philip King, head of retail banking at Abu Dhabi Islamic Bank

This is an understandably stressful position to find yourself in, especially when you are more than willing to pay off your debt but can’t seem to find the means to do so. Nevertheless, it is important to stay optimistic and try to turn your current situation around.

The main issue with credit card debt is that it has the potential to balloon into a substantial amount when you miss payments as you will be paying finance rates and late fees.

However, thanks to the credit shield, I can see that you have managed to keep that under control. That being said, I advise you to read through the terms and conditions thoroughly as it will outline the scope, eligibility conditions and limitations of the policy.

It should include your benefits, coverage period of the insurance and how you can process your claim. You may need to reach out to the bank or insurance provider to clarify why you are no longer eligible to make a claim against it.

In addition, I would advise you to make use of other measures, such as a payment holiday. Due to the pandemic, banks are highly encouraged to ease the difficulties their clients are facing with the help of the Targeted Economic Support Scheme (Tess). To do so, you would have to resubmit documentation proving your loss of employment.

While the bank has a duty to help you with this matter, their collection agents have little to no interest in aiding you with your credit shield insurance as their job is simply to collect debt
Nathan McFarlane, founder of

Moreover, taking into consideration that the bank is still contacting you regarding your credit card payment, I highly recommend you get in touch with them to get further clarification. Making a payment towards your debt is a good start.

Still, if the amount paid does not cover the minimum payment required, the bank might continue to contact you until the minimum amount has been cleared, which is a good reason to try to maintain your minimum monthly payments to prevent any legal cases and unwanted calls from the bank.

Do keep in mind that maintaining minimum payments, although helpful, is still not a sustainable solution to your predicament.

In your situation, it is vital you establish a solid financial footing and this can only be done once you have cleared your current debt. Therefore, it is advisable that you seek help from friends and family or liquidate some of your assets.

In the meantime, you should focus your efforts towards looking for a main source of income. I understand that, due to the pandemic, it is quite difficult for many people to maintain their current jobs, much less to secure a new one.

However, it is essential that you find work that is either full-time, part-time or freelance to ease you out of your current circumstances and help clear your debt.

Debt panellist 2: Nathan McFarlane, founder of

Credit shield problems happen frequently. If you search the number of complaints on people not receiving credit shield cover when they have lost their jobs, it can be astonishing. This problem stems from a combination of factors, including a lack of understanding from the debtor and a procedural/customer service problem inside the banks.

From your side, it appears you have done everything you had to do to try to solve the problem.

While the bank has a duty to help you with this matter, their collection agents have little to no interest in aiding you with your credit shield insurance as their job is simply to collect debt.

From my experience, it is unlikely the bank will follow through with legal action as you have proof of losing your job, have active credit shield insurance on the card and are communicating with them regularly. Of course, it is possible they may take legal action, but you should not be fearful of these bullying tactics.

Try, once again, to reach out to the relevant department at your bank. If you still have no success, then I suggest you file an official complaint with the bank. If they fail to resolve the issue within 30 days, you can then register a complaint with the UAE Central Bank's Consumer Protection Department.

Debt Panellist 3: Felicity Glover, personal finance editor at The National

A credit shield, or credit card insurance, is taken out by bank customers to ostensibly cover their payments against involuntary job loss. I say ostensibly because I know of very few customers who have succeeded in getting the insurance cover approved to take over their card payments while they look for another job.

This is a contentious issue in the UAE. Many customers have been mis-sold credit shield insurance without fully understanding the terms and conditions, but believe they will be fully covered in a worst-case scenario. In reality, the terms and conditions may state that it doesn't, in fact, even cover forced redundancy.

There are also time limits to make a claim, which are typically about two to three months from the date of losing your job. If this window is missed, then your application will be rejected.

This could be the case with you, particularly judging by the time frame of your request – it took the bank three months, from November 2020 to January 2021, to reject your application and is a point you should raise with them by making an official complaint through their website.

I would also suggest asking to meet the most senior person at the bank as quickly as possible to help you with this issue, more so if the bank is continuing to charge monthly payments for the credit shield to remain active.

Also, reach out to the bank's insurance department to ask them why they rejected your application and request them to reconsider the decision. If they refuse to budge, then cancel the insurance on the card and request they reimburse you. After all, there's no point in paying for the insurance if they won't allow you to use it.

I think it is unlikely the bank will pursue a legal case against you as the debt is still quite small. However, I advise you to sort out the issue as soon as possible as credit card debt can spiral out of control quite quickly because of compounding interest and late fees. I wish you all the best.

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

Updated: September 15, 2021, 5:00 AM