Business | Your Money

Borrowers can complain against abuse

The law does not condone intimidation or harassment by debt collectors

  • By Cleofe Maceda, Staff Reporter, Gulf News
  • Published: 00:00 February 19, 2011
  • Gulf News

  • Image Credit: Getty images

Albert started getting a stream of phone calls from debt collectors in late 2009. By then, he had already maxed out all his six credit cards and owed Dh75,000 from various banks. He was jobless.

On a typical day, he would get six calls from one bank and his phone would ring almost incessantly, starting from 8:30am. Once, a collector rang and asked where he was. "I'm in Deira," he replied. "In five minutes, the police will be there," came the reply.

The threat was nothing but a bluff, the Filipino expat said. "I've received a lot of calls like that, but until now I haven't been arrested.

"There were instances where I dealt with verbally abusive callers. One of them, a female staff, called to inform I had to pay Dh2,500 at once. I said I could pay only Dh500 because that was all the money I had. Despite my assurances that I was not running away, she got angry and cursed me, saying she didn't care if I was broke, all she needed was to make sure I'd pay," Albert said.

Tonya, another expat, is no stranger to Albert's experience. "I had a payment delay on my loan [with a UAE bank] and the collections department people were calling me and started to tell me indecent words… When I explained why there was a delay on my payment, they told me to shut up and they said they didn't need my explanation," the expat wrote on an online forum.

It's one of those things many borrowers dread:bank staff calling to remind them of their missed payments. What's worse is when callers resort to hardball tactics, including making threats and using foul language. "If you have a weak personality, these nuisance calls could drive you to just end your life once and for all," Albert said.

Collection tactics

Some banks hire a third party to follow up on unpaid dues, others have their own collections departments, tasked mainly to "manage" or "reduce" delinquencies.

"Here in Dubai, the banks employ their own staff to collect from people in arrears and defaults. These staff are under pressure to get results because their salaries are low and commissions on collections make up a large part of their income. If someone leaves the UAE leaving debts behind, the banks will follow them using debt collectors in countries they move to," explains Steve Gregory, a financial adviser at Holborn Assets.

There is no hard and fast rule on how banks treat delinquents, although in most cases they call customers the moment a payment is overdue in the first instance. If three consecutive payments are overdue, the matter is forwarded to the collections department.

"With regard to legal action, a review can happen at any point. Certainly, as an account becomes several payments past due, the likelihood of pursuing legal action increases. Having said this, the exact timing and course of action is handled on a case by case basis, as there are many factors considered, such as, but not limited to, exposure to the bank, type of product, and the customer's willingness to work out an amicable solution," a source said.

Borrowers have the responsibility to ensure their dues are settled promptly. This doesn't mean there are no limits on how far a collector can go. Some legal experts interviewed by Gulf News, said bank customers still deserve some fair treatment.

"However, whereas in some countries there are special laws that penalise abusive debt collection practices, in the UAE, there are none. We do have a debt law, but it provides more protection to the creditor than to the borrower. It always favours the creditors. More often it is the lender that files a complaint against the debtor," a legal consultant who requested anonymity told Gulf News.

Pierre Mehawej, legal consultant at Kanaan and Azhari Advocates and Legal Consultants, said banks are allowed to follow up on missed payments or notify their clients prior to filing a case, but certain methods, such as harassing borrowers, are punishable under the Penal Code.

Legal recourse

Clients who find repeated phone calls hampering their work, for instance, have the right to privacy and demand that collectors stop calling them. "Most of the time, people stop answering the calls. My advice is to complain to the police against any debt collector under Article 250 of the Penal Code," Mehawej told Gulf News.

Use of threats to extract payments should not be tolerated either. "The bank that is instructing his employee [debt collector] to call the debtor and to threaten him in order to collect the unpaid money should be blamed for breaching the ethics of the banking profession, as well as the circulars of the Central Bank and the stipulations of Law No 10 for the year 1980 regulating the said profession. It goes without saying that the bank will be liable for the acts of its employees," he said.

"If the consumer feels harassed or offended, he has the full right to file a complaint before the police or the public prosecution. However, such harassment shall entail the acts mentioned [in the Penal Code] which basically punishes any person who curses, slanders, insults, or publicly ruins someone's reputation or honour," he added.

Gregory said that those who shout, use abusive language or threaten to have a borrower arrested should be reported to authorities.

"This is not acceptable practice, and you can complain, in the case of a bank collector, to the Central Bank of the UAE, but there are other options also."

Another legal consultant also advised offended borrowers to send a letter to the collector's supervisor so that disciplinary action could be taken. "It may be difficult to impose on the bank to stop calling you because you owe them their money. The least you can do is speak to them and ask for a workable solution to settle your dues," she said.

She maintained that any offence by a debt collector is a personal matter, so if a borrower intends to pursue a harassment complaint, he can't drag the bank into the case. "So you can complain against the collector, but it doesn't fall under company charge."

One bank spokesperson, who asked not to be named, said the phone calls only serve as a "gentle reminder" to borrowers.

The consultant maintained that the banks' collection staff always undergo training to ensure they behave in an "appropriate manner" with customers.

"They follow scripts that are legal and compliance-approved, so they won't be able to just say anything. There are guidelines. They're not allowed to resort to abusive acts, such as shouting or insulting a customer. If an offended customer complains, an investigation will be undertaken and the staff concerned can be reprimanded," she said.

"However, it is important to note that customers who are overdue for payments will receive calls from the collections department seven days a week between 7am and 9pm," she added.


Have Your Say

Have you ever had to deal with debt collectors? In what manner did they approach you? How did you deal with them? Share your experiences with us.

Comments (28)

  1. Added 19:42 February 19, 2011

    Thank you GN for raising such matters. PLEASE WE THE BANK CUSTOMERS NEED MORE INFORMATION AND LAWS BY CENTRAL BANK. If we have taken loan we are paying late charges and interest and yet we get tortured by banks. Some bank collectors talk very rude. At times if I miss one payment I get text messages by the bank. If we are living in a modern and transparent city than we expect the consumers right to be protected. Everytime I have one missed payment and I say to bank I need a settlement but the bank says since it's one payment we can't. Someone once said we only do settlement when a customer have several due payments. Please highlight if we want to make settlement on a monthly what are our legal rights from central bank. Obviously if for some reason we cant pay and we feel we want to close card. Thank you GN once again for being our voice.

    Hassan, Dubai, United Arab Emirates

  2. Added 18:49 February 19, 2011

    Thanks to Gulf News for raising this issue in Public. There are so many people out there that might get some relief because of this article. I've been through myself difficult times handling repetitive bank calls for the past months. I was working in UAE since 1997 and just forced to take credit cards & loans in year 2005 when my Mother was diagnosed with an "end-stage renal disease" and had to go through a dialysis session 3x a-week. But she passed away in 2007. From that time, till in 2009 I was a good payer with no payment lapses. Then in March 2009, my company has decided to close-down but fortunately, I immediately got a job. However, due to recession I got a salary package which was much lesser than what I used to receive. So, from then on my bank payments delinquency had started when I wasn't able to fit in my salary budget knowing that I was the only one supporting my family back home. Now, I went on leave last month and when I came back in Jan 2011 my Father was hospitalised and been diagnosed with diabetes. So, due to this reason, I wasn't able to pay some of my dues as I need to send my money back home. Repetitive bank calls and abusive text messages from the bank really make me feel so sick and depressed thinking of my Father's health. I tried to explain to them that I can't pay as I need to send my money to my father but they don't understand and one of the caller had said "I don't care if your Father dies, this is your obligation and you have to pay today! Otherwise we will present your security cheque, and you will end up paying the total outstanding". These people working as debt collectors should have proper training on how to handle their cCustomers. We know that we owe these money from the bank, but they should also consider the critical reason why we can't make payments on-time. I wrote a letter to the banks asking for an easy payment plan, for me to somehow manage to pay my debts but got no reply so far.

    Anonymous, Dubai, United Arab Emirates

  3. Added 18:42 February 19, 2011

    I too faced a similar situation. It was regarding a credit card. I had paid all my dues when I had changed my company. Since my balance of nil, I had not changed the mailing address. After almost 2 years, when I went for a vacation to my home country to India, on the 3rd day, a debt collector came to my house. My elders are shocked. They never attempted to contact me when I was in UAE. I get connected to the debt collection office in Dubai, and he threatens me that I will be in Jail in India or when I attempt to come to UAE after my vacation. He also gives me a limited time period of 7 days to pay my debt, otherwise I would be in Jail.

    Alcuino, Dubai, United Arab Emirates

  4. Added 18:02 February 19, 2011

    This is most common practice of collection department of all the banks to abuse the customers and to be as rude as possible. I am getting several calls from the collection department of a bank even i don;'t owe them a single penny. And still the banks in UAE said that they are customer friendly.

    Jai Prakash Tolani, Dubai, United Arab Emirates

  5. Added 17:40 February 19, 2011

    I had received a call from one bank on Friday (21 Jan 2011) time 12.30 pm during my Friday Jumah Prayer(Friday Prayer) from Dubai.She was talking about my payment confirmation and i told her , it Friday holiday and that too on Friday prayer time. This kind of calls are really not acceptable this time. All bank follow up people should respect the time and days importance during follow up time. All Bank collection dept. recovery Dept and bank followup people should understand that, time importance time. when to call when not ot call. So please and request let the concert authorities to advice bank not do such unprofessional practice. There should be a proper time to follow up for collection respecting the time and day.

    P.C.Ummer, Abudhabi, United Arab Emirates

  6. Added 17:24 February 19, 2011

    i would like share about my bank . i have the credit card and my credit limit is 5,300.00. last 2 years iam dealing with this bank. last month i went for my vacation 10 days and i miss the payment on time . when i came back to UAE . the next day i got the call from bank and they told me to make the payment. i told them ok i will make the payment by day after tomorrow. then he said ok . after two days i made the payment through UAE exchange afternoon and daily i used to get the message from bank your minimum due amount should pay now. i ddint care because i already to one of the costumer care center person.then i got the last message from the bank if payment not received today your security cheque will be Deposited today AED 6000. 1. this is happen first time 2 .y they putting the cheque is the costumer miss the first payment.and every month i used to pay for credit shield also. amount is 5300 y they going to put the cheque amount of 6000.

    Anees, sharjah, United Arab Emirates

  7. Added 17:17 February 19, 2011

    Hi, yes that issue is to be highlighted as these people hired by banks are reaaly harmfull & impolite, its actually called harrassment. I was in the same case & really thought that these people can push people to suicide, the way they talk and by the frequency they call. yes the police should do something about it.

    Samar, DUBAI, United Arab Emirates

  8. Added 17:04 February 19, 2011

    It is high time the conduct of these banks are regulated! I earn a pretty decent salary and never been in financial crisis. My salary account is with a different bank, while I have an account with Abu Dhabi based bank so that I can pay my bills conveniently online. I cash deposit in this bank time to time and always keep excess. Once I was extremely busy and stressed with work, didnt notice that my cash ran out as I didnt deposit cash. I had to pay 250 dirhams for the credit card bill and I got a call from a lady reminding me of payment of 250 dirhams that is due in two days! I said thank you for reminding me, I will take care of the payment. That is when she started asking 'when will you do it? Why not today? Where are you now?'. I was so extremely upset with her disrespectful harsh tone, lack of manners of polite language and all this for 250 dirhams that is due after 2 days on an otherwise clean account! I can imagine how they talk to someone who really borrowed from the bank! I told her to first learn basics of customer service and how to talk to customers. She said 'you dont need to teach me service. I got so many customers and I dont have time for people like you' I told her if she has so much work and is stressed about it, to tell her managers that she cant cope, but dont talk to customers like this. I also told her, if someone needs to follow up from the bank let someone else call me, but I am not going to talk to her again! Had a much nastier experience with another bank! They gave me corporate credit card after so much convincing, which I didnt need in the first case! They said it is free for lifetime! Then I get a bill of 500 dirhams after first month for credit card charges and no transaction made. I kept trying to reach them and no one would address it while they kept charging fine on that 500 dirhams. After 4 months, the bill was 1700 dirhams and I get a call from this extremely rude guy who doesnt even want to listen what I am saying, He threatens me of a police case and getting me expelled from the country!

    Chakravarthy, Dubai, United Arab Emirates

  9. Added 16:53 February 19, 2011

    i think its happened almost every card holders if you missed a single payment case is, i went on emergency leave for 15 days i missed one payment,when i came back i started receiving calls from reputed bank.he was asking why i gone for emergency leave without paying dues.these type of question make you mad especially the time he ask me.from that day i started hate all the banks.i clear all my dues now i am not a criminal i am living decent life.

    thaj, al ain, United Arab Emirates

  10. Added 16:36 February 19, 2011

    I 've been here for 12 years and dealt w many banks. Most of them use the same language and threaten people. They even do the same to my wife and daughter once they called my home, after my refusal to answer my handy ! I must add that I found only one bank staff so decent, polite and friendly. Hope the central bank can put a stop to these sort of behaviour in UAE !

    Fareed, Dubai, United Arab Emirates

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