The Debt Panel: ‘I consolidated my debts but Dh18,500 is missing from the loan amount’

Abu Dhabi resident who is now unable to pay her children’s school fees turns to our experts for advice

I work as a full-time teacher but also tutored after work to help us out financially as my husband has been unemployed for five years. During this time, we took out two loans and used credit cards to pay school fees for our two sons.

Since Covid-19 began, I have lost my tutoring job and our finances have suffered badly. We originally had two personal loans and two credit cards with the same bank, and another credit card with a second bank.

In June, a representative from the first bank called to ask if I was interested in taking out a 48-month instalment plan for the two credit cards.

She said there would only be a penalty of Dh105 if I paid the instalment plan off early, while the repayments would be lower than the minimum balance that I had been paying each month.

Because of our financial issues, I agreed to do this. However, my payments for these twocards went from just under Dh1,000 a month to more than Dh2,000 a month.

Then in August, the same bank offered us a consolidation loan that would allow us to pay off the two personal loans, the two credit cards and the third one we have with the other bank. The loan was for Dh285,000, with monthly instalments of Dh6,878.

After our debts were paid, we would also have Dh18,500 left over to pay for our sons’ school fees as we have fallen behind and the school will no longer allow them to attend classes until we make a payment.

We thought everything would be OK but we have now been caught up in a nightmare, in which the bank’s credit card department took Dh65,000 for the two credit cards when we only owed Dh46,500 on them – a difference of Dh18,500.

To add insult to injury, the credit card department also took our instalment payment for the two cards, which means we have overpaid them by another Dh2,000.

After repeatedly contacting the bank about their error, the credit card department is now blaming the loan department, and saying that the Dh18,500 went to the collections department to pay the interest on the credit-card instalment plan. However, I was assured there would only be a penalty of Dh105 by the bank’s representative.

We do not know where the Dh18,500 has gone despite many calls to the bank. Nobody can explain what has happened and all we want is for the money to be released so that our sons can return to school. Can you advise us on what to do? MJ, Abu Dhabi

Debt panellist 1: R Sivaram, executive vice president and head of retail banking products at Emirates NBD

This is a very challenging time and I sympathise you over with the immense pressure you are facing. In spite of the extenuating circumstances you have been facing, it is creditable that you are being conscientious about your finances and taking responsible actions towards meeting your obligations.

Going through the details you have provided, there clearly seems to have been some miscommunication between the bank and yourself. I would recommend that you immediately reach out to your bank and seek an urgent appointment with a senior representative from the department concerned to understand in full detail how the debt consolidation has been done.

Based on the details you provided, it does look like there has been some serious miscommunication on the part of the bank representatives who offered you the credit card instalment plan and then the consolidation loan

Ensure that you take all statements and details of the outstanding amounts on your loan and credit cards before you applied for the new loan so as to confirm the total amount of what you owed across all facilities, and obtain clarification from the bank on what is causing the discrepancy.

You should also highlight the discussion with the bank’s representative on the small penalty that you were told you would be required to pay if the instalment plan was paid off early, instead of the larger sum that has been deducted.

Furthermore, this discussion will also help you get clarity on the overall debt settlement agreement with the bank.

I wish you the very best in resolving this issue and hope you and your family become financially stable soon.

Debt panellist 2: Ambareen Musa, founder and chief executive of

Based on the details you provided, it does look like there has been some serious miscommunication on the part of the bank representatives who offered you the credit-card instalment plan and then the consolidation loan.

They failed to clearly explain the applicable interest, fees and penalties, as well as the repayment terms of the new loan arrangement.

Did you receive anything in writing from the bank, such as a document that you had to read, agree to and sign for the bank to proceed with the revision of your loan terms? While there is always a chance of errors happening at the bank's end when it comes to processing any application, there is also the possibility that you may not have been fully aware of what you were signing up for.

You should start with requesting the bank for a copy of the revised loan and all its payment terms. This should mention all the information in black and white – the interest rate, processing fees for the instalment plan, if any, pre-payment penalty and so on.

Now, coming to how you would remedy this situation if the bank has indeed breached the terms you agreed to. You can lodge a formal complaint with the UAE Central Bank and if that does not work, then seeking legal help could be your next course of action.

From what you have stated here, it seems as though the bank did not take into account the amount you had already paid towards the credit-card instalment plan before consolidating your total outstanding credit card balance with your existing loans.

Besides that, you also need to be sure that the Dh18,500 was unfairly adjusted towards the instalment plan, which breached the pre-payment terms. A lawyer could help you navigate this better, and get a clear response from the bank. Just make sure that you retain all proof of communication with the bank to help build a strong case for yourself.

Debt panellist 3: Steve Cronin, founder of

First, you need to find all your paperwork and go through the terms and conditions. Without a written record, the salesperson could pretty much say anything and it will not necessarily be accepted by the bank now.

If you are to take this further up the chain, you need to have documentation of all papers and communications from the bank, who you have spoken to and proof that you have tried to mediate with the bank on this matter.

Now is not the time to be shy about this, as your family depends on you. Make it clear to your bank that you intend to take things further if you do not get a satisfactory result.

One department cannot just blame another, although you do have a complex situation with several restructurings. Be very clear that the paperwork does not make you liable for the Dh18,500.

If it does, the case is around mis-selling rather than missing money.

If you continue to hit a brick wall with the bank, you should contact the Consumer Protection Department of the Central Bank. You can call them on 800 CBUAE or visit one of their branches. Make sure you are able to lay everything out clearly and have evidence of where the bank may be at fault. Also let your bank know that you will be complaining to the Central Bank.

If this does not resolve the situation, you may need to look into insolvency proceedings via the court, where a court-appointed mediator will try to work out a suitable solution for you and the bank.

Meanwhile, you should try to keep your expenses down as far as possible, without making yourselves completely miserable, as 2020 is hard enough as it is. Think how your family can generate any additional income, through freelance tutoring in person or online. Is there any way your husband and sons can generate any income at all?

Finally, if there is anyone in your extended family or circle of friends who can give you a loan, even with some kind of low interest rate, this could help you get back on your feet. It is not like their money will earn much more than 1 per cent sitting in a bank these days.