It came to my attention at the start of this year, via a social media post, that credit shield is not a compulsory finance charge on credit cards. This was a shock to me. I decided to seek out some clarity on the matter, only to find out that RAKBANK had been deducting credit shield from my credit card ever since I received it, when I never authorised such a deduction and had believed it to be part of their mandatory charges. Many people are unaware that this is not a compulsory charge. It should never be deducted unless they specifically authorise it.

In challenging RAKBANK last month, I requested them to show me my original contract, which proved there was no mention of credit shield, and I had never signed on anything, authorising them to ever make such deductions.

In the UAE and the world over, there is always a legally binding need to have terms and conditions made clear in contract form, and proof of signature to authorise agreements to such terms, before any action can be taken, let alone financial deductions. Hence, my question to RAKBANK is: “On what grounds can it justify deducting fees from a customer’s account without contractual mention or their authority?” More importantly, what is stopping RAKBANK from giving clarity to customers with a separate opt-in or opt-out option via a clear and formal contract? Customers can get a credit shield policy in a way where they can sign for it with full awareness of customers’ rights. The bank insists it puts wording in marketing collateral, couriered separately. Again, not a legally binding reason to deduct funds from customer accounts.

I felt compelled to write to Gulf News to help broaden awareness and to appeal for this matter to be resolved with a just outcome — full refund of unauthorised fees.

From Ms Carolyn Deed

Dubai

The management of RAKBANK responds:

Thank you for your email regarding concerns raised by Ms Deed.

Please note that as per banks’ standards and best practice in the UAE banking industry, the Bank is limited with respect to disclosing or providing details and/or specific information about their customers to any third party to maintain the confidentiality of their data and personal information.

We would like to inform that the Customer availed a credit card from The National Bank of Ras Al Khaimah (Public Joint Stock Company) or RAKBANK. One of the benefits provided on the credit card is Comprehensive Credit Shield Protection. Credit Shield is a comprehensive insurance provided to all the customers and it covers protection to their outstanding amount on the credit card relating to the occurrence of certain happenings, like in the unfortunate event of death, permanent disablement, critical illness or involuntary loss of employment. This is provided on a complimentary basis for the first two credit card statements and thereafter, a nominal premium (as mentioned in the Service and Price Guide) is applicable on the total outstanding amount in each subsequent month’s credit card statement.

RAKBANK Credit Cards Terms and Conditions, which includes the details of Credit Shield Terms and Conditions are sent to all our customers, along with the credit card. It is also available on our website at rakbank.ae.

Furthermore, monthly credit card statements, which include the Credit Shield Cover premiums, are sent to all our customers, and customers can approach the bank at any time, to opt out of credit shield.

The customer requested to cancel the Comprehensive Credit Shield Protection in January 2017 and RAKBANK had promptly cancelled the credit shield cover as per her request.

Ms Deed responds:

Thanks, this totally skips around the central issue that there was no authorised signature for me and, as the bank alludes, many other parties, so the bank legally has no right to deduct these funds from me or anyone.

RAKBANK responds:

Our stance on the matter remains the same and we have communicated to the customer accordingly.

(Process initiation: February 23. Response from organisation: February 28. Process completion: March 5.)

Editor’s note: Do you have similar issues that you would like to raise with us? You can write to us at readers@gulfnews.com.