Early settlement
I took an auto loan from RAK Bank at 5.25 per cent interest in March, 2009 and have been paying monthly instalments of Dh2,615 promptly. Due to the recent global economic downturn I want to reduce my liabilities, so I advertised to sell my car.
When I approached the bank to know the procedure of ending the loan, I was shocked! There was a penalty of 5 per cent, because I was settling the loan early.
Normally, banks do charge early settlement fees, but not 5 per cent — it is around 2 per cent. I checked to see if I could talk to a branch manager. I was introduced to a supervisor and she repeated the same — it is the bank’s policy.
What I fail to understand is that when a person wants to settle his dues legally, instead of being a defaulter and having the bank chase them for payment, why is the bank acting deaf towards my issue?
Now when I am struggling and selling my car at a loss I have to find some Dh4,500 more to settle my loan. Is it possible for you [Gulf News] to take up this issue with the bank?
From Mr Ajay Kumar

Mr Ian Hodges, Head of Personal Banking, RAK Bank responds:
Kindly note that as per the bank’s standard process, there is an applicable fee levied at the time of [an] early settlement of loans, which was applied when Mr Kumar settled his loan.
Details of the bank’s tariff are provided in our Service and Price Guide available at our branches and published on our website as well. Also, we ensure that any changes in our tariff are communicated to customers through mailers and statement inserts.

Mr Kumar responds:
I have looked at the reply. As expected they are stressing the point of policy, the same thing that is conveyed to me by the counter staff. I do understand and agree that I have signed on the terms and conditions, but what I requested was a waiver or some kind of reduction in the rate.
Let me present the calculation [of the loan], which will show how [much extra money] I paid to bank [in the form of interest] though I ended the loan in 20 months.
The total loan amount was Dh123,000.
The period of loan was five years.
The processing charges were Dh1,280.
The total interest was Dh32,623 at 5.25 per cent.
The monthly interest was Dh544 approximately.
In 20 months, I paid Dh52,300.
The outstanding balance was Dh104,604, out of which the interest balance was Dh21,760. Thus, the principle balance was Dh82,844
The total [amount] paid to bank at the time of settlement was Dh93,972.
Thus, the additional [amount I] paid was Dh11,128.
In reality I paid the interest for 40 months, whereas I ended the loan after 20 months. The bank will say this is [the procedure] followed by all banks and this is how the loan calculations are.
However, in Islamic banking a part of the amount thus collected will be returned in case of early settlement. To those readers who are still not aware of the bank’s calculations, the majority of the monthly instalments paid will go towards interest in the early stages of loan so when you are going for an early settlement, bank must have collected more interest. On top of it they charge you 5 per cent saying it is to compensate the loss of interest for the balance period.
They have only one answer — it is the policy. We have only one solution — let the consumer be aware of the potholes.

Mr Hodges responds:
We have been in touch with Mr Kumar and have clarified the details of his loan. As mentioned in our earlier letter to you, it has been reconfirmed to the customer that an applicable charge as per the Bank’s published tariff was levied at the time of settlement of his loan.

Excessive charges
For the last three months [my] Sewa bills have been a nightmare and no one has responded to my complaints regarding them.
I am living in Abu Shagara in a studio flat with my wife. Both of us work, hence no one is at home to use any electrical devices. I have only one air conditioner and don’t even have a TV as I only [recently] shifted to this place. [I want to know] how can the electricity bill always be above Dh700?
From Mr Mahendra Mangalvedhekar

Editor’s note:
The complaint was sent to the management of Sewa. However, despite repeated reminders they failed to respond.

Mr Mangalvedhekar updates:
For the past two months I have been getting bills that are almost the same.
When I went for complaining to the Sewa office, no one took the complaint. They kept saying that [the amount] was because of my air conditioner, but there was no further clarification.

Baggage misplaced
My complaint regards my journey from Dubai to Malta on April 16, 2010. My e-boarding pass showed Zone C, while at Dubai International Airport Terminal 3 there are only Zones A and B for the purpose of checking in.
Secondly, there were no specific counters for the online check-in at Dubai International Airport. As a result, those passengers who have checked in online had to stand in the same queue as those who had not checked in.
Thirdly, since there was a single long queue for the check-in, I asked for help from an Emirates airline staff member at the self check-in counter. Although the baggage was weighed and the luggage tag was generated, the baggage was not moving onto the conveyor belt. The staff member tried a couple of times to get it cleared, but was unsuccessful.
She requested I lift the luggage and place it on the conveyor belt. I confirmed if this was fine and she said it was as it was done for other passengers as well.
On arrival at Malta airport my check-in baggage never arrived. This is the worst nightmare anyone can have, especially on a holiday in foreign destination. I lodged a property irregularity report at the airport.
Thereafter, I contacted some of my friends and relatives in Dubai to find out where exactly the luggage was. It was made known to me that it was at the airport and it would arrive the next day, which it finally did.
This meant my family and I was not able to go out and were confined to the hotel for a whole day.
There were additional communication expenses, as well as taxi expenses from the hotel to the airport in order to retrieve the check-in baggage.
The response [I received from] Emirates airlines did not answer my first two queries. As regards my third query they offered an amount of $100 (Dh367), while my actual expenses as regards the taxi and telephone calls in order to retrieve the delayed baggage were €100 (Dh481).
As their offer did not even cover my actual expenses, let alone the fact that we lost one day of sightseeing, I refused it. Emirates airlines should be fair and offer compensation which makes sense.
From Mr Koshy Oommen

An Emirates spokesperson responds:
Emirates regrets the inconvenience experienced by Mr Koshy Oommen when travelling from Dubai to Malta in April 2010.
We do our utmost to ensure the ease and convenience of our passengers while using our services at Emirates Terminal 3 in Dubai. The online boarding pass with ‘Zones’ mentioned was initiated to enable the smooth and efficient boarding of passengers, and is highlighted through announcements and prominent signage for all three Zones — A, B and C, which represent First, Business and Economy Class respectively.
The ‘Zones’ are for the purpose of aircraft seating, and are not intended for the purpose of check-in nor are they linked to baggage drop off or any resulting luggage delays.
Passengers who have checked-in online, and have a print out of their boarding pass, may proceed directly to immigration unless they have check-in luggage. Those with check-in luggage can use the following bag drop off counters; 1-2 for first Class, 16-17 for Business Class and A 01-20 for Economy class, which are indicated on the Flight information boards. Passengers with just one piece of baggage can use the self service kiosk to check-in their bag by scanning in the barcode that appears on their boarding pass.
Emirates place a great deal of emphasis on the high standard of service we offer our customers and we were disappointed to learn that Mr Oommen’s expectations were not met.
The maximum compensation for late delivery of baggage was offered, in light of the fact that receipts for additional expenses caused by the delay, have not yet been presented. It is never our intention to leave our customers unhappy with the services provided. Our customer affairs team thanks Mr Oommen for his understanding and for allowing us to respond.

Mr Oommen responds:
It is interesting to note that Emirates airlines suggest the self service kiosk option should be chosen. This was indeed the option as directed and assisted by the Emirates airlines staff, but it was a disaster as the baggage never arrived on the same day.
Emirates airlines have offered me $100 only and I am sure it cannot be the maximum compensation for late delivery of baggage.
I have not been asked to present any proof of expenses, which is contrary to what Emirates airlines has mentioned.
My additional expenses amounted to €200 — €100 [as stated in original letter], which included the taxi expenses from the hotel to Malta airport and back, telephone charges to call Dubai from Malta to trace the lost baggage and €100 [for an additional] day of my vacation which was lost as I had only one check-in bag.
The maximum compensation offered by Bupa International insurance company (shown on Emirates airlines website) for delayed baggage is €300. I had to pay the insurance premium for this trip to Malta as it was mandatory and it was paid to Bupa as directed on the website. It is indeed ironic for Emirates airlines to state that $100 is the maximum compensation for the late delivery of baggage.
If Emirates airlines cannot even compensate €200 for an expensive trip then it is indeed very frustrating and disappointing.

An Emirates spokesperson responds:
We have nothing further to add.

Unwelcome charges
I have been a regular customer of National Bank of Umm Al Quwain (NBQ) [and have a] credit card for five years with a good track record. I pay on time with no late payments.
In May, I visited NBQ because I was planning to settle the outstanding balance of my credit card as I was going for vacation. When the bank employee checked my account records, she told me that I have also a dormant savings account with an amount of Dh1,300, which needs to be paid.
I was shocked to hear that. I was also told that the said account was closed due to zero transactions made for almost five years. As far as I know, I did not open any savings account with them. I may not be sure if the agent who approached me five years back was playing tricks with me. Maybe he let me sign the savings account form together with the credit card form application.
Supposing I may have signed the savings account form application by accident, why did the bank never send monthly statements? What I usually received was the credit card statement only. The bank should have informed me over the phone or through e-mail if I had an inactive/dormant account with them in order to maintain the balance required. They charged me Dh1,300 without my knowledge. I called the customer service staff at the Bur Dubai branch, but they kept telling me that my complaints were already forwarded to the concerned department and they were still waiting for the reply.
The last time I called, I was told to call the hotline and their complaints department. When I called those numbers, I was again told to settle the issue with the Bur Dubai branch. So where do I go now?
The penalty charges are accumulating every month if this problem does not get resolved. It has already been more than four months. I am hoping that Gulf News can help me solve this issue.
From Mr John Bihag

Mr Bihag updates:
On October 28, 2010, I received a call from NBQ complaints department. I was told that they already received my complaint, which you forwarded. They have reviewed my case and decided to deduct Dh1,000 to my lien amount/penalty charges. Honestly I am not happy with their decision but I need to accept their offer in order not to delay the process. The longer it takes, the more my penalty accumulates. As of October 28, my penalty charges reached almost Dh1,500 as claimed by the NBQ personnel who called me. I still need to pay almost Dh500.
I don’t think I deserve the penalty. If I was informed immediately that I have a dormant account, I am sure this problem wouldn’t have existed. I believed that it is their obligation to inform every client with regards to a dormant account.
If I did not visit the branch, I wouldn’t know that I have these charges. I always avoid penalty charges, thus I pay on time. This is a big lesson for me. We need to be careful in signing documents especially when bank agents are in a hurry. They will usually say “sign here, sign there” and most of us trust them. Since I am no longer happy with NBQ’s services, I think I need to cancel my credit card soon.

A spokesperson of NBQ responds:
I would like to inform you that we contacted the customer and solved his compliant.

Mr Bihag responds:
On November 4, I got a call from NBQ. I was told that they are going to waive all the penalty charges. I would like to take this opportunity to thank Gulf News for their great effort to help people who are deeply in need when a problem arises. I also appreciate the final decision of NBQ to waive my penalty charges. I would love to continue banking with them.

Editor’s Note: If you have similar complaints, let us know at readers@gulfnews.com