Learning my own lesson in rogue bank fees

How to deal with financial services you don't want and didn't ask for.

One of the real headaches associated with writing a personal finance column is feeling the responsibility to do the right thing, monetarily speaking, even if no one else is around.

Parking illegally to shave 50 metres off the morning commute. Tossing out day-old leftovers in favour of take-away. Paying the service fee at a first-floor ATM at Carrefour rather than taking the escalator up to my bank's machine on the second floor.

These sorts of guilty pleasures, however small, are no longer available to me, at least not without the repercussions of annoying pangs of guilt that I am violating some vow of prudence I unwittingly swore to when I signed on to this column.

But there are occasional benefits to holding myself to a more financially pious standard.

Not long ago, I received my latest credit-card statement and was able to successfully repress my instinct to rip it up and deposit it in the waste bin. The better angels of my nature reminded me that the experts say we should always check our statements for unfamiliar charges and hidden fees.

Lo and behold, in this case I stumbled upon a Dh68 charge for something called "Credit Shield Plus". I've long made it a practice of avoiding these types of fees, which banks quite fancy because they provide a healthy revenue stream and not much protection that I could not provide by doing a little planning on my own.

After a little research, I learnt that Credit Shield Plus is a service that boasts of "protecting my outstanding balance" in case I die or become disabled (in other words, my balance gets paid off without penalties if I get hit by a lorry driving home tonight) and covers my minimum installment in the event of "involuntary loss of employment" (I do not go to jail for outstanding credit-card bills if I get sacked). It is basically like having payment insurance.

The cost is 0.65 per cent of the monthly balance and I noticed it for the first time this month because I had not yet fully paid off several airline tickets that I had charged to my credit card.

In any case, I did not want to pay it. I was poised for a fight.

The timing was interesting because I recently opted to turn off paper statements in favour of doing all of my banking online - my small contribution to reducing the UAE's carbon footprint.

The Credit Shield Plus was included on my last paper statement and I thought it was intriguing that I did not notice it when paying my bills online. I wrote an indignant e-mail to the bank alleging that they never notified me of the charges, nor did they include them in my online statements. My outrage was palpable.

Within 24 hours, I got a reply to my "query". The bank wrote that the charge was, in fact, included on my previous online statement, a fact that I later verified with slightly more rigorous research. Briefly chastened by my mistake, I was fortified to see that the bank acknowledged that the fee is optional, an intriguing development given that I never signed up for it to the best of my recollection.

Whether these types of charges are becoming more common in the UAE, I couldn't say, but it would fit with the global trend if they were. In the US, consumer groups have noted that banks are stepping up these types of voluntary "protection" fees because their ability to levy overdraft and other penalty fees was severely curtailed by legislation passed last year. South Africa last week created an independent monitor to keep an eye on bloated bank fees, and the UK is also looking to step up its oversight of credit-card firms, with a formal plan expected early next year.

Armed with the bank's acknowledgment that the charge is optional, I e-mailed a response that I wanted the service cancelled and the Dh68 reimbursed to my account. Again, I was expecting a battle but was pleasantly surprised to get a prompt response within 24 hours.

The customer-service team wrote that it had received my request, which had been "forwarded to the concerned department" for approval. Although I have not yet received a refund, I am encouraged by the bank's response thus far.

Many consumers complain about UAE banks' customer-service abilities, and rightfully so in many cases, but maybe this experience is a sign that at least some of them are turning over a new leaf.

That said, it irks me to no end when banks and other corporations slip in extra fees and leave it to their customers to take the time and effort to have them removed.

The lesson, it seems, reminds me of the slogan adopted by the New York City subway system after September 11 to encourage passengers to report suspicious packages: see something, say something.

The same goes for bank and credit-card statements. Keeping quiet could cost you.