I missed my credit card payment last month because we had a rent payment, which left us short for the month. But within seven days of the payment being overdue, I had to block calls from the bank because of an extraordinarily aggressive call centre worker. I advised her that I could not make the minimum payment of Dh3,000 until I was paid at the end of month for my job as an administrator, at which point she literally screamed and shouted down the phone at me. I then received daily, progressively more threatening text messages; one said that if I didn't pay by 2pm that day in the branch they would raise a police case. I returned their text confirming I would pay on or around November 28 when I was next going to paid, but the threats of office visits, legal action and police cases were very distressing. I understand from my patchy research that police won't take action until payments are three months overdue. Is this the case? I ended up borrowing money from my sister to cover the amount but it would still be good to hear the legal position for the future. The bank were extraordinarily aggressive considering I normally always pay on time and before the due date. NC, Dubai
Debt panellist 1: Keren Bobker, The National's On Your Side columnist and an independent financial adviser
There are two sides to every situation. I don’t approve of aggressive tactics from banks but NC was overdue with a payment which is breaking the terms of the agreement signed when taking out the credit card. The terms are quite clear in that payment is due on a specific date and usually a late payment penalty can be applied. In many cases the terms are available to view on a bank’s website. Having another financial commitment is not really a valid excuse for making a late payment on a debt. After all, banks are a business and the customer make a legal agreement with the lender and do not have a right to vary the terms or make late payments.
On the other hand, I find that too many banks are unnecessarily harsh with customers for relatively minor transgressions. Customers who miss payments are in the wrong but where a customer has a good track record there is no need for a bank to call them every day, make threats that cannot be followed through or be quite so rude as some are. I understand that certain banks have departments that chase up defaulters and they have targets to hit, but some staff seem to be unaware that not everyone responds well to threats and that working with customers who have issues will often lead to a better outcome for all parties.
Generally, a bank will not raise a police case against someone who defaults on a debt until three consecutive payments have been missed. This then becomes a criminal offence with potentially serious consequences. The banks do not want customers to get to this point as it costs them money and is a great deal of hassle, but there are a very large number of defaulters in the UAE, many of whom simply bury their heads in the proverbial sand and refuse to accept that if they borrow money they have a responsibility to repay it in a timely manner.
Once NC has brought her repayments up to date, she should raise the issue with senior staff at the bank and suggest that better training is required for the debt collection staff. NC may also like to consider planning a little better for future rent payments to avoid a repeat of the situation.
Debt panellist 2: Jamal Alvi, the chief credit officer at Abu Dhabi Islamic Bank
The normal collection practice followed by banks is to use a service-based approach with the customers in the initial stages of delinquency. If, however, banks feel that there is high risk of continued default from a customer, they may choose to become more firm in their approach. I think your bank got aggressive probably because you were not taking their calls. Normally the banks use the security cheque as a last resort, but in some cases they may decide to bank the cheque in the early stages of delinquency to initiate police action. The law does not prevent banks from taking such early action and the police are obliged to take immediate action on any bounced cheque complaints. The best thing to do is to keep the lines of communication open with your bank.
The Debt Panel brings together four financial experts: Jamal Alvi, the chief credit officer at Abu Dhabi Islamic Bank; Ambareen Musa, the founder and chief executive of the comparison website Souqalmal.com; Rasheda Khatun Khan, a wealth and wellness planner and founder of Design Your Life; and Keren Bobker, The National's On Your Side columnist and an independent financial adviser with Holborn Assets in Dubai. Together they answer queries in a weekly online column to help readers better tackle their debts. If you have a question for the panel, write to pf@thenational.ae.
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