I opened a current account with a local bank in September 2015. However, I closed the account in 2019 and received the full balance in cash.
In April 2019, I emailed the bank to double check if the account had been closed and they confirmed that it had been in their reply.
For the past couple of years, I have been trying to apply for a credit card but the application has been rejected repeatedly. I have since discovered that the bank claims that I defaulted on the closed account’s overdraft facility by Dh4 ($1.08).
I have no idea how it came to be that I owe the bank Dh4. The bank has also never informed me of this and I only discovered it when I applied for a credit report from Al Etihad Credit Bureau.
I do not understand why the bank did not deduct the Dh4 from the balance in the account when I closed it. The bank has also never contacted me to claim back the money.
How can I pay back the Dh4 and remove myself from the defaulter list? Moreover, will I be able to restore my credit score over such a ridiculously small amount of money? MR, Dubai
Debt panellist 1: Sameh Awadallah, acting global head of retail banking at Abu Dhabi Islamic Bank
The first step that you should take is to contact the bank and discuss the matter. Let them know your situation and highlight your intent to apply for a credit card that is being hindered because of an overdraft amount of Dh4 and that you are willing to settle.
Please note that an overdraft charges no interest at all. The funds in a current account are always made available to the account holder whenever needed, and to compensate for the extra liquidity that the bank provides, there is no interest charged on current accounts as well.
In your case, the overdraft may have occurred due to not enough money in your account to cover a transaction or withdrawal, but the bank allowed the transaction and charged the fees accordingly.
Try to pay off what you owe as soon as possible. Once you have achieved this, the default will be marked as “satisfied” on your credit report, which will help in your future credit applications.
As a rule of thumb, one should always request a clearance letter once an application to close an account or liability has been processed to ensure there is no further accrual of charges
Jaya Ratnani,
managing partner at Freed Financial Services
Banks offer overdrafts as short-term finance to customers. While the tenure of a personal loan is for a longer duration — up to five to seven years — the tenure of an overdraft facility is for a shorter period and is usually cleared within a year.
Eventually, you will have to pay off the overdraft regardless of the amount. The way banks try to encourage this is to reduce the maximum zero per cent overdraft each year — the idea being that by the time the zero per cent ends, you'll have paid it off.
Failure to pay an overdraft fee could lead to a number of negative consequences.
The bank could close your account or take collection or other legal action against you depending on the amount defaulted. It could also report your failure to pay, which may make it difficult to avail a bank’s services in the future and eventually affect your credit profile.
Debt panellist 2: Jaya Ratnani, managing partner at Freed Financial Services
When you apply for any financial credit, one of the most important documents for approval is a consumer's Al Etihad Credit Bureau report.
This report states a person's financial obligations and helps banks to assess your credit worthiness. Based on your repayment history and defaults, your overall credit score is determined. Even a small overdue amount of Dh4 can have a negative effect on your AECB rating.
As a rule of thumb, you should always request a clearance letter once an application to close an account or liability has been processed to ensure there is no further accrual of charges. As you did not receive a letter, the Dh4 is reflecting as a past due in your report.
In your case, the following steps are recommended:
1. Approach the bank and request for a waiver of all the charges
2. Based on the email confirmation that you received from the bank, it should consider this waiver
3. Request a no-liability letter from the bank
4. Allow 30 days for the bank to report the closure of the account to AECB
5. Review your personal AECB credit score after 30 to 45 days to ensure that the default has been removed and your new score is correct
Meanwhile, if you are applying for a credit card facility, you can provide the justification to the bank about these charges and the credit evaluation team can consider your case for approval.
Alternatively, you can wait for the AECB report to reflect the closure of the account and reapply for the credit card.
Debt panellist 3: Alison Soltani, founder of Leap Savvy Savers
It is frustrating that you have been rejected for a credit card and had your credit score affected by a Dh4 charge that you did not know about.
It may have been a timing issue — a vendor did not take a payment before the bank finished the process of closing the account or, for such a small amount, it may be a system error.
In future, it is worth not charging anything to a debit card attached to an account you wish to close for several days before initiating the closing process to avoid having outstanding charges on the account after it is closed.
The first step is to try to resolve the dispute with the bank directly. If the situation remains unresolved after your first contact, register a formal complaint through the bank’s complaints channels, submitting the email you received and any closing balance statements you may still have as supporting documents.
If the bank is unco-operative, does not settle the complaint within 30 days or in the case that it has added interest to the Dh4 charge, you can raise a complaint with the Central Bank of the UAE through its website.
You will need supporting documents, such as a complaint reference number from your bank and possibly the email confirming the closure of the account.
The central bank's Consumer Protection Department will contact you once you have logged the complaint to let you know the steps it will take.
When you have resolved the case with the bank and cleared the mistake, contact AECB to raise a dispute. There is a data correction request form that you can fill out on their website, or you can call them on 800 287 328 or visit one of their offices in Abu Dhabi and Dubai.
When AECB receives information from the bank regarding the error, it will update your credit report, which will automatically change your credit score.
Be aware that the process may be lengthy and your repeated credit card applications may be affecting your credit report.
However, there are strategies to improve your credit score while you are resolving the Dh4 dispute.
Failure to pay an overdraft fee could lead to a number of negative consequences.
Sameh Awadallah,
acting global head of retail banking at Abu Dhabi Islamic Bank
Ensure all bills, fees and loan payments are made on time and limit the number of accounts, cards and loan applications you make in a short time frame.
Additionally, do not utilise the maximum amount of any existing credit you have. For example, if you have a credit card with a Dh10,000 limit, it will be an advantage if you use Dh3,000 to Dh4,000 per month and pay it off in full.
You could also request to become an authorised user on a fiscally responsible partner’s card, which will positively affect your credit report.
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 pf@thenational.ae
Citizenship-by-investment programmes
United Kingdom
The UK offers three programmes for residency. The UK Overseas Business Representative Visa lets you open an overseas branch office of your existing company in the country at no extra investment. For the UK Tier 1 Innovator Visa, you are required to invest £50,000 (Dh238,000) into a business. You can also get a UK Tier 1 Investor Visa if you invest £2 million, £5m or £10m (the higher the investment, the sooner you obtain your permanent residency).
All UK residency visas get approved in 90 to 120 days and are valid for 3 years. After 3 years, the applicant can apply for extension of another 2 years. Once they have lived in the UK for a minimum of 6 months every year, they are eligible to apply for permanent residency (called Indefinite Leave to Remain). After one year of ILR, the applicant can apply for UK passport.
The Caribbean
Depending on the country, the investment amount starts from $100,000 (Dh367,250) and can go up to $400,000 in real estate. From the date of purchase, it will take between four to five months to receive a passport.
Portugal
The investment amount ranges from €350,000 to €500,000 (Dh1.5m to Dh2.16m) in real estate. From the date of purchase, it will take a maximum of six months to receive a Golden Visa. Applicants can apply for permanent residency after five years and Portuguese citizenship after six years.
“Among European countries with residency programmes, Portugal has been the most popular because it offers the most cost-effective programme to eventually acquire citizenship of the European Union without ever residing in Portugal,” states Veronica Cotdemiey of Citizenship Invest.
Greece
The real estate investment threshold to acquire residency for Greece is €250,000, making it the cheapest real estate residency visa scheme in Europe. You can apply for residency in four months and citizenship after seven years.
Spain
The real estate investment threshold to acquire residency for Spain is €500,000. You can apply for permanent residency after five years and citizenship after 10 years. It is not necessary to live in Spain to retain and renew the residency visa permit.
Cyprus
Cyprus offers the quickest route to citizenship of a European country in only six months. An investment of €2m in real estate is required, making it the highest priced programme in Europe.
Malta
The Malta citizenship by investment programme is lengthy and investors are required to contribute sums as donations to the Maltese government. The applicant must either contribute at least €650,000 to the National Development & Social Fund. Spouses and children are required to contribute €25,000; unmarried children between 18 and 25 and dependent parents must contribute €50,000 each.
The second step is to make an investment in property of at least €350,000 or enter a property rental contract for at least €16,000 per annum for five years. The third step is to invest at least €150,000 in bonds or shares approved by the Maltese government to be kept for at least five years.
Candidates must commit to a minimum physical presence in Malta before citizenship is granted. While you get residency in two months, you can apply for citizenship after a year.
Egypt
A one-year residency permit can be bought if you purchase property in Egypt worth $100,000. A three-year residency is available for those who invest $200,000 in property, and five years for those who purchase property worth $400,000.
Source: Citizenship Invest and Aqua Properties
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
Overview
What: The Arab Women’s Sports Tournament is a biennial multisport event exclusively for Arab women athletes.
When: From Sunday, February 2, to Wednesday, February 12.
Where: At 13 different centres across Sharjah.
Disciplines: Athletics, archery, basketball, fencing, Karate, table tennis, shooting (rifle and pistol), show jumping and volleyball.
Participating countries: Algeria, Bahrain, Comoros, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Saudi Arabia, Sudan, Syria, Tunisia, Qatar and UAE.
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
UAE currency: the story behind the money in your pockets
WOMAN AND CHILD
Director: Saeed Roustaee
Starring: Parinaz Izadyar, Payman Maadi
Rating: 4/5
Safety 'top priority' for rival hyperloop company
The chief operating officer of Hyperloop Transportation Technologies, Andres de Leon, said his company's hyperloop technology is “ready” and safe.
He said the company prioritised safety throughout its development and, last year, Munich Re, one of the world's largest reinsurance companies, announced it was ready to insure their technology.
“Our levitation, propulsion, and vacuum technology have all been developed [...] over several decades and have been deployed and tested at full scale,” he said in a statement to The National.
“Only once the system has been certified and approved will it move people,” he said.
HyperloopTT has begun designing and engineering processes for its Abu Dhabi projects and hopes to break ground soon.
With no delivery date yet announced, Mr de Leon said timelines had to be considered carefully, as government approval, permits, and regulations could create necessary delays.
Greatest of All Time
Starring: Vijay, Sneha, Prashanth, Prabhu Deva, Mohan
What vitamins do we know are beneficial for living in the UAE
Vitamin D: Highly relevant in the UAE due to limited sun exposure; supports bone health, immunity and mood.
Vitamin B12: Important for nerve health and energy production, especially for vegetarians, vegans and individuals with absorption issues.
Iron: Useful only when deficiency or anaemia is confirmed; helps reduce fatigue and support immunity.
Omega-3 (EPA/DHA): Supports heart health and reduces inflammation, especially for those who consume little fish.
Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Essentials
The flights
Return flights from Dubai to Windhoek, with a combination of Emirates and Air Namibia, cost from US$790 (Dh2,902) via Johannesburg.
The trip
A 10-day self-drive in Namibia staying at a combination of the safari camps mentioned – Okonjima AfriCat, Little Kulala, Desert Rhino/Damaraland, Ongava – costs from $7,000 (Dh25,711) per person, including car hire (Toyota 4x4 or similar), but excluding international flights, with The Luxury Safari Company.
When to go
The cooler winter months, from June to September, are best, especially for game viewing.
The Written World: How Literature Shaped History
Martin Puchner
Granta
THE SPECS
Engine: 3.5-litre supercharged V6
Power: 416hp at 7,000rpm
Torque: 410Nm at 3,500rpm
Transmission: 6-speed manual
Fuel consumption: 10.2 l/100km
Price: Dh375,000
On sale: now
The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
On sale: Now
GIANT REVIEW
Starring: Amir El-Masry, Pierce Brosnan
Director: Athale
Rating: 4/5
The five pillars of Islam
Four-day collections of TOH
Day Indian Rs (Dh)
Thursday 500.75 million (25.23m)
Friday 280.25m (14.12m)
Saturday 220.75m (11.21m)
Sunday 170.25m (8.58m)
Total 1.19bn (59.15m)
(Figures in millions, approximate)
When Umm Kulthum performed in Abu Dhabi
Known as The Lady of Arabic Song, Umm Kulthum performed in Abu Dhabi on November 28, 1971, as part of celebrations for the fifth anniversary of the accession of Sheikh Zayed bin Sultan Al Nahyan as Ruler of Abu Dhabi. A concert hall was constructed for the event on land that is now Al Nahyan Stadium, behind Al Wahda Mall. The audience were treated to many of Kulthum's most well-known songs as part of the sold-out show, including Aghadan Alqak and Enta Omri.
Dr Graham's three goals
Short term
Establish logistics and systems needed to globally deploy vaccines
Intermediate term
Build biomedical workforces in low- and middle-income nations
Long term
A prototype pathogen approach for pandemic preparedness
Aayan%E2%80%99s%20records
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Skoda Superb Specs
Engine: 2-litre TSI petrol
Power: 190hp
Torque: 320Nm
Price: From Dh147,000
Available: Now
The specs
Engine: 8.0-litre, quad-turbo 16-cylinder
Transmission: 7-speed auto
0-100kmh 2.3 seconds
0-200kmh 5.5 seconds
0-300kmh 11.6 seconds
Power: 1500hp
Torque: 1600Nm
Price: Dh13,400,000
On sale: now
HOW DO SIM CARD SCAMS WORK?
Sim swap frauds are a form of identity theft.
They involve criminals conning mobile phone operators into issuing them with replacement Sim cards, often by claiming their phone has been lost or stolen
They use the victim's personal details - obtained through criminal methods - to convince such companies of their identity.
The criminal can then access any online service that requires security codes to be sent to a user's mobile phone, such as banking services.
