The Debt Panel: 'My bank's error meant I couldn't pay off 50% of my mortgage to apply for a property visa. What can I do?'

The Dubai resident's bank account has been frozen because he hasn't been able to renew his visa and Emirates ID

Steven Castelluccia / The National
Steven Castelluccia / The National

In 2018, I employed a mortgage consultancy to help me secure a Dh1.2 million home loan with a bank in the UAE that has since merged with another lender. The fixed-interest mortgage was approved with a monthly instalment of Dh7,436 for the first 24 months.

I set up a direct-debit payment system with my other bank and transferred the home loan repayments every month to the lender that held my mortgage.

In July 2020, I contacted the bank to pay off 50 per cent of the mortgage as I planned to apply for the UAE’s three-year property residence visa. At the same time, the account that I was using to transfer the mortgage payments had a total of Dh492,723.62 in it.

When I contacted the bank to organise early payment of the mortgage, it turned out that they did not have my correct contact details – despite them being on the original mortgage application form. I don’t know who they had been contacting since the mortgage was approved in 2018 and I am concerned there may have been a data breach. There was a lot of back and forth between myself and the bank regarding the issue and it appears that somebody at the bank input the incorrect email address and mobile phone number in my account.

By this time, four months had passed. The confusion regarding my mortgage and personal details had escalated and the issue was not resolved. And because I was unable to pay off 50 per cent of my mortgage and apply for the property visa, my other bank that was transferring the mortgage payments froze my account as I couldn’t give them my new visa and Emirates ID.

The mortgage payments stopped and I think I may have missed this month’s payment, but have been unable to check. When I made a complaint to the Central Bank of the UAE regarding this, the bank that has my mortgage informed them that my account was dormant, rather than being frozen. I believe there is a big difference between the two classifications.

More than 237 days have passed since the issue began, and I still don’t have a resolution to my problem. I am stuck in the UK because of the Covid-19 travel restrictions and can’t physically go to a branch to sort it out. I have hit a brick wall and don’t know how I can make the bank understand that it has my incorrect details through no fault of my own, which has had a domino effect on my visa plans. Can you advise me on what to do about this? Can I take legal action against the bank? JC, UK

Debt panellist 1: Philip King, head of retail banking at Abu Dhabi Islamic Bank

This is an understandably difficult and frustrating position to be in and we are sorry to hear that you were unable to apply for the property visa due to this inconvenience.

It is the bank’s responsibility to ensure that their customers’ profiles are accurate and up to date, especially if you have provided them with the correct information from the beginning. It is also imperative that they ensure there are no data breaches or fraudulent activities that will compromise the privacy of their customers.

We highly recommend that you contact both the bank where your direct debit is set up and your lender bank and escalate this matter immediately to the highest relevant representatives, emphasising the inconvenience that this has caused you by not being able to apply for the property visa.

Ensure that they are aware of your problem and provide them with a record of all your correspondence with both banks and a copy of your mortgage application form. Maintaining a transparent relationship with your banks is crucial at this stage to guarantee that your rights are upheld.

You need to check whether the lender has received your most recent payments to ensure you haven’t defaulted on your mortgage, which could result in penalties and fees

Stuart Ritchie, director of wealth advice at AES

Banks are required to enforce an independent and fair complaint resolution mechanism to help address consumer complaints, and it is the bank’s responsibility to try to resolve their customers’ complaints within a reasonable time period.

You should raise your concern on a possible data breach as you were not contacted since the inception of mortgage and clarify that your account had been frozen and not inactive. If your bank does not offer you a valid response within 30 days of receipt, you are entitled to escalate this matter to the Consumer Protection Department of the Central Bank of the UAE. You will need to provide your complaint reference number, along with proof of your efforts to contact the bank.

If the matter is still unresolved and there is a dispute regarding an obligation under a bank agreement, you will need to seek legal advice and, if necessary, you can file the dispute with the courts for resolution.

Debt panellist 2: Stuart Ritchie, director of wealth advice at AES

It may be worth getting in touch with the mortgage consultancy that you used to secure your home loan to check what details they have for you and if the incorrect data was given to the bank. Given you are unable to travel, it may be easier for the consultancy to act on your behalf and explain the situation with the bank. Their knowledge of suitable contacts at the bank should make the situation easier to resolve.

If you have proof that your details were correctly provided on the original application, you may have grounds to raise a formal complaint with the bank. Check any copies you have of the application, or request these from the bank which should have it on file.

You need to check whether the lender has received your most recent payments to ensure you haven’t defaulted on your mortgage, which could result in penalties and fees. While the situation is ongoing, you could request a payment holiday from your lender for a short period until it is resolved. Interest will still accrue during the payment holiday, which will increase the total cost of borrowing, and the term of your loan will be extended.

Debt panellist 3: Ambareen Musa, founder and chief executive of Souqalmal.com

You are correct in guessing that a dormant account is not the same as one that's been frozen. An account is labelled dormant if it has been inactive for more than three years. On the other hand, an account is frozen by a bank when a customer's final salary and end-of-service benefits are credited to the account and they also have an active debt with the same bank.

Bank accounts can also be frozen if a customer fails to update their documents, such as their latest Emirates ID, passport, visa and proof of address. In this case, the bank can restrict or discontinue all services provided to the customer.

The concept of dormancy is typically applicable to bank accounts, but you mention here that your mortgage lender was the one that had your incorrect contact details.

This situation seems like the end result of miscommunication and possibly mismanagement of data as a result of the merger, and the back and forth without resolution hasn't helped either. The fact that you're stuck overseas also doesn't help matters.

Since you're having trouble negotiating with the bank from overseas, you could look into hiring a legal representative who can negotiate with the bank on your behalf. If you have friends and family based in Dubai, you could ask them for recommendations to figure out who to work with. Another option is to get in touch with the British Embassy in the UAE to see if they can get you access to pro-bono legal advice before you pursue the legal route.

A legal expert can help you regain access to the funds frozen in your bank account. Because your existing visa has now expired, you may have to convert your resident-status account to a non-resident status account.

You should also get a copy of your credit report to see what's been going on with your mortgage and bank account, which may be tricky to do as your Emirates ID has expired. Again, that's something a legal representative could help you with.

It may be best to handle the issue of the incorrect personal details with your mortgage lender before you proceed with transferring the funds towards partial settlement of the loan.

The Debt Panel is a weekly column to help readers tackle their debts more effectively. If you have a question for the panel, write to pf@thenational.ae

Updated: March 3, 2021 12:00 PM

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