I am an expat living in Abu Dhabi and I work in the aviation industry. My first job was in Dubai where I had two credit cards from one bank. I defaulted on the card's payments in 2014 as I was in between jobs for six months. When I finally found a job in Abu Dhabi and was able to secure a loan, I contacted the bank in Dubai to settle both the outstanding credit card debts. I was told the settlement figure over the phone as the credit and collections department of the bank was in Dubai and I was in Abu Dhabi. I then made the payment through an ATM machine. They were my first ever credit cards in my lifetime and I was unaware I needed to secure a clearance letter after the settlement. So I was shocked to be contacted earlier this year by a third party collector representing the bank and saying that I have an outstanding payment of Dh44,000 on one of the cards. The credit limit of that card was only Dh2,000 and I still have the ATM receipt showing that I paid Dh2,800. They will not honour the receipt as a settlement and have told me I am required to pay again. How can I resolve this issue? AS, Abu Dhabi
Debt panellist 1: Kunal Malani, head of customer value management, UAE & MENA at HSBC Bank Middle East
I’m pleased to see that you tried to clear your overdue debt once you got a job and managed to secure a loan.
I suggest that you reach out directly to the bank to clear up this matter. Most banks would have a Customer Experience or a Customer Services team with an email address available on their website.
If you have indeed cleared your debt back in 2014 and have your ATM receipts, the bank will be able to help you settle this quickly.
What’s equally important is having your records correctly reported to the Al Etihad Credit Bureau (AECB). You must ask the bank to update your records with the bureau.
I suggest you apply to the Credit Bureau directly for your credit report now and if this amount is showing as outstanding, bring it to the attention of the bank when you speak to them about the repayment you have made.
Then – in a couple of months - I suggest you apply for a copy of your Credit Bureau report again to check if the bank has updated your records.
It is your right to have access to the your bureau records for a small fee.
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Debt panellist 2: Michael Routledge, the founder of the debt advice site savememoney.ae
As you rightly point out, this seems a little unjust. It’s unfortunate that the bank did not issue a clearance letter, however I would suggest that in this case you do not discuss the issue with the third party debt collection agency and speak to the original lender directly. The third party agency is incentivised to chase the Dh44,000 as they will take a cut of the proceeds when the debt is paid.
Another point is that the lender has not contacted you for well over a year which seems strange. Assuming during this period you had given the lender the correct contact details to reach you, then there is no reason why the lender should not have contacted you regularly and directly to settle the account.
Your first step should be to contact the original lender directly and explain clearly in writing the exact account of what happened when you had the debt, the process of paying it off, including a copy of the ATM payment receipt and explain that you consider this issue to be closed. Once you have done this, you can see what reaction you get from the lender, to see if their position is similar to that of the third party. I also suggest that you apply for a copy of your credit report.
You can do this by visiting an AECB customer service centre and providing your valid Emirates ID, passport copy and email address. A standard report costs Dh100.
This will confirm your current debt position as far as their records are concerned.
Should your lender and the credit bureau confirm that the debt stands, you may want to consider taking legal advice as to how to approach the issue.
Another option, should you be stuck with the debt, would be to visit a debt management company who may be able to negotiate a settlement with your lender given the extenuating circumstances of your case. Try to solve the issue yourself first if you can as the debt management company will charge a fee for their services.
Debt panellist 3: Ambareen Musa, founder and chief executive of Souqalmal.com
There seems to be a huge misunderstanding over your credit card payments and due amounts. Basically, the amount due on your credit card is subject to interest every month and as long as you do not pay it off in full, the amount will keep growing until the full bill is settled. The credit card statement is a periodic (usually monthly) statement that lists all the purchases, payments and other debits and credits made to your credit card account within the billing cycle. It also tells you what your minimum balance due is. Be aware that the minimum balance due is the amount you have to pay back every month to not go into the red but it is not the full amount to settle all your debts. The outstanding amount is still subject to interest which is why you have such a big amount outstanding today. Over the last three years, you would have received your statement every month showing you the outstanding balance, which from your letter would come up to Dh44,000 today.
The best way to deal with this is to contact your bank and understand exactly what happened over the last three years. Ask them what your purchases were and how much the charges, including late payment fees and interest, come to. This will allow you to properly understand what the issue is and how it amounts to Dh44,000. Our best guess is that most of it is fees and interest on the amount that was outstanding three years ago; these will have accumulated over the years. It appears the Dh2,800 you paid off did not cover the full outstanding balance and therefore what was left kept growing. However, this should have been reflected in your monthly statements.
A clearance letter will only be given to you once you have settled all your outstanding amount. Contact your bank directly to get all the details and then sit with them to negotiate a way to potentially restructure the repayment. Make sure to explain the misunderstanding in full.
On this panel this week: Kunal Malani, head of customer value management, UAE & MENA at HSBC Bank Middle East; Michael Routledge, the founder of the debt advice site savememoney.ae and Ambareen Musa, founder and chief executive of Souqalmal.com.
The Debt Panel is a weekly online column to help readers better tackle their debts. If you have a question for the panel, write to email@example.com.