On the Money: Bank overcharges can leave scars that last a lifetime

There's nothing like writing about an issue that affects many people. I learnt that when I wrote about the opaqueness surrounding school fee rises in the UAE a few months ago.

More recently, I've learnt that the mention of bank fees raises the ire of many readers, judging by the reaction I've had to my column in our November 12 issue, when I wrote that my bank continued to deduct a monthly Dh100 service charge despite apparently informing account holders last May that the fee had been cancelled.

Just to recap, I didn't receive that letter. And it was only by accident that I found out about the cancelled fee. When I rang the bank's customer-service number, the agent told me about the letter. Worse, they said the onus was on the customer to contact the bank to have the service fee stopped.

On November 1, my bank transferred Dh400 into my account. A phone call a couple of days later from customer service confirmed that it was a reimbursement for the obsolete charges. When I questioned why I didn't receive a reimbursement for the other months, she said she had to make another application because the bank didn't have access to my statements that would prove I'd been slugged the cancelled fee for all that time.

Anyway, in response, some readers wrote in about their experiences. Here's one of them:

Hi Felicity,

I read your article in the Saturday, November 12, edition of The National, and could not quite work out whether to laugh or cry (I ended up compromising and did both).

It was well written, thank you.

I will not bore you with my experiences, but they are identical in nature. The only difference is that I have seen it happen often enough to know this is something systematic rather than accidental.

Whilst the specific subject matter tends to vary, the process is always the same. (From the bank's perspective), it goes something like:

1. Ignore customer and hope they go away;

2. Try referring them to someone else (who will then, in turn, repeat step 1);

3. Claim it is "standard practice and that all banks in the UAE do this";

4. Ignore customer and hope they go away;

5. When backed into a corner, promise to "look into it" (and then repeat step 1);

6. When in receipt of threats of actions which may be embarrassing, blame a computer error, determine the absolute minimum required to placate customer, and take your time doing it.

The fact is, local banks are quite deliberately, systematically, conducting a "fleecing" exercise designed to maximise profits, legitimate or otherwise, from their customers. They do so comfortable in the knowledge that they are effectively untouchable from a legal/consumer protection perspective.

What if the bank's actions were actually a deterrent to higher personal/business investment in the UAE? What if the bank's profits were dwarfed by the loss of potential investment their actions cause?

Call me a cynic, but perhaps only in this scenario would we see any real improvement in bank behaviour.

Keep up the good work and kind regards.

And here's another:

Dear Felicity,

Every conversation of expats in the UAE will turn eventually to the unjust charges of any bank in the UAE, foreign or domestic. Their creativity in charges is legend. But I have a good one here for you, better than most and likely the most unjust charge of all.

If you use your NBAD bank card to check your account balance at an ATM (just checking the balance, not performing any other action), it will cost you Dh1. I didn't believe it, checked again and pop went another dirham. This is likely the biggest mark up to any cost-based calculation I have ever seen; it must be in the thousands of per cent. That makes it, of course, easy to post a profit for the bank if it is greedy like that.

Back to me. Why the bank didn't put an automatic stop on the Dh100 service fee for all accounts like mine is beyond logical thinking. And I contacted my bank in a professional capacity to ask it to explain this. Which means that I can now tell you which bank it is: HSBC.

Robert Crossman, HSBC's head of retail banking and wealth management, confirms it removed the monthly Dh100 fee for Advance customers in May last year. In my previous column, I said it was July because that's what the customer-service agent told me.

"The waiver was a result of routine portfolio management strategy of the bank, aimed at rewarding customers with higher commitment to the relationship," he says. "While the offer was developed for new customers, HSBC also extended it to existing customers. In order to enjoy fee-free banking, existing customers were required to contact the bank and provide a salary-transfer commitment.

"We made every effort to inform customers through e-mail and sending letters to their mailing address. As a result, till date, the majority of our Advance customers have taken the measures to qualify for fee-free banking."

And here's the answer to my question about why an automatic stop wasn't implemented. "Since the offer required an official salary transfer commitment, a mere history of salary transfers over recent months would not qualify a customer for the offer," Mr Crossman says. "As a result, HSBC could not automatically entitle all potentially qualifying account holders."

But what if you're a loyal account holder for a number of years and your salary had been transferred to your account from day one? Isn't that enough proof? I, for instance, opened my account with HSBC in March 2008 and have had my salary transferred into my account - which started off as a Status account - every month since I arrived in the country.

Regardless, if you are an HSBC Advance account holder who is still being charged that obsolete Dh100 fee, Mr Crossman urges you to contact the bank. "In the case of Ms Felicity Glover, HSBC provided a refund as soon as she contacted the bank. HSBC would be happy to attend to the request of any other customer in a similar situation on merit."

And yes, HSBC did finally refund me the whole amount. And I should point out here that the matter was resolved before I sought comment from the bank.

On November 3, I received another transfer from HSBC, this time for Dh1,200. Kudos to HSBC for dealing with the problem surprisingly quickly.

But I still feel it should never have happened in the first place. If an automatic stop was put on that fee from the beginning, HSBC would have saved itself a lot of bother - and having to deal with angry, cynical customers more than a year later.