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Look beneath the surface for hidden bank charges

Esha Nag, an HSBC customer, recently had an unpleasant surprise when the bank charged her a fee of Dh100, citing that the balance for the month of February had fallen below Dh5,000. Upon reminding them that it is a 'zero-balance' account, the phone banking customer care official told her that the information had not been fed into the system.

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Lenders should not have their heads in the sand over customer dissatisfaction.
Gulf News

Dubai: Esha Nag, an HSBC customer, recently had an unpleasant surprise when the bank charged her a fee of Dh100, citing that the balance for the month of February had fallen below Dh5,000. Upon reminding them that it is a 'zero-balance' account, the phone banking customer care official told her that the information had not been fed into the system.

It was the bank's mistake. Yet, it was only after Gulf News forwarded her complaint letter to HSBC that it decided to take up her case. The bank refunded her the Dh100.

She is not alone in encountering such surprises from the banks - both domestic and foreign - in this country.

Customers repeatedly complain about charges and fines which they perceive to be "unfair" or "hidden." Their general feeling is that the banks are dishonest and out to fleece them in various ways to fatten their profits.

In most instances reported to Gulf News, they point out that they were either not notified of impending charges or, in cases of new schemes or products, the impression given by the sales agents and customer service personnel, mostly over the phone, is that the offer comes for free when in reality it is not. One customer says, "They display the relevant information in fine print in the [welcome pack] booklets and they display the fees in the branches, but don't reveal them on the phone - this is plain cheating."

In other cases, customers feel that the charges for issuing certain official letters such as "clearance of loans" are exorbitant, as high as Dh500, which one customer describes as "ridiculous".

Veronica Scocci had an account with Emirates Bank International, with a salary transfer from her company. Later the company decided to issue cheques instead, but the money still went into the same account.

The bank decided to penalise her for this change of transfer. A penalty was imposed at the end of the third month and the amount was for each month the direct transfer didn't take place. She had not been notified about such a fine by the first month. She closed the account on the spot.

When Gulf News brought this case to the notice of the bank, Louis Scotto, general manager of retail banking, responded by reference to the website: "In case the customer's salary is not received by the bank for two consecutive months, then the customer is informed via a letter [and] would be charged in the subsequent month."

Scocci says she never received such a letter, and argued that such a letter should come in time to avoid the fine. And why should she care to look up the website, she says. "They should inform me."

In another case, Mashreqbank erred in not implementing a customer's request to change payment options on her credit card. She was charged Dh115 for late payment and Dh598 in interest.

The bank did not respond to repeated enquiries to rectify the matter, and only did so when Gulf News intervened. It referred to in-house "mis-communication" and reversed the costs.

Customers of various banks, including HSBC, Citibank, ABN-Amro, Abu Dhabi Commercial Bank (ADCB) and Mashreqbank, have differing tales of woe to share.

We told HSBC that we had had several complaints of varying types. Were they playing deliberate tricks?

Daffer Luqman, head of branch management at HSBC Bank Middle East, responded by e-mail. "We are up-front in communicating [fees and charges] to our customers through various channels. We have corresponded directly [on] specific issues that they raised, but I wish to assure you that none of these cases were related to hidden charges," he said.

While the bank declined to respond to our queries in turn, it e-mailed letters of apology to the customers we named.

"I am concerned to learn about the inconvenience that you have experienced and I offer my sincere apologies," wrote K. S. Radhakrishnan, customer relations manager at HSBC Bank Middle East to Nag, who took the opportunity to mention the professional inadequacy of the bank's sales personnel.

When Gulf News inquired to ADCB about the Dh500 fee for a letter accompanying a loan transfer, the head of communications Yaser Mansour noted that "ADCB charges Dh500 when the liability letter needs to be addressed to another bank, and Dh250 if it is addressed to another party."

The justification was most revealing. "You will appreciate that the rationale behind such a fee is protection of the bank's loan portfolio." In other words, this is not an administrative or processing fee but a disincentive against transferring your business elsewhere.

The charge is punitive in nature. Those sort of conditions are well worth knowing about, and the banks might consider warning customers more plainly in advance.

Otherwise, the feeling of being cheated will remain.

Your comments

People who avail loans are invariably the victims, due to the unavoidable circumstance wherein they customer need the liability letter. On top of their personal ordeal, they have to face humiliation from the banks. Different banks are charging different amounts and over the last three to four years have risen steadily. TheCentral Bank authorities should take cognisance of these complaints and look into these charges.

I think the customer is partially at blame as well. They should be monitoring their account transactions on a weekly basis. If not the bank charges, other kind of scams can also occur in the account. So, I feel, we must be monitoring the account very regularly (which I do on a daily basis).
M. Pillai

In my opinion customer must read thecontract (Terms and Conditions)before signing on contract. Ifthe customer has any question, it should be directed to the supervisor for a satisfactory answer. If the customer is still not satisfied, then he/she has the right to ask the supervisor to give it in writing. If he refuses, then go to another bank.
A. Mirza
Atlanta, GA,USA

Banks are like lions in the forest. Today "A" is the vitim, tomorrow"B" is the victim. Banks are not bothered about this. Carry on, we are all alive.

I agree wholeheartedly with this article and would like to encourage Gulf News to take up this social concern (mainly relating to the customer service of all banks in the UAE). There is a laissez-faire attitude that they have and I have faced numerous issues with them. Only when real pressure from consumers is exerted will there be changes for the positive.
S. Al-Nimr

I am a banker with over 10 years of experience. I have to admitted regretfully that 95 per cent of the complaints we get result in passing the parcel. The management never even advises the customer service / sales staff of any penal charges. So how can they pass the info to the customers?
M. W. Husain