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Game over?
A study of inmates at Dubai Central Jail in March this year revealed that 19% of them had been imprisoned for having written cheques that bounced.
And more than 60% of those inmates had been jailed for the first time and did not have a criminal record.
Colin Edwards, a British IT journalist, narrowly escaped becoming one of those statistics last year when he was detained by immigration authorities at Dubai Airport and informed that a cheque he had written to his landlord had bounced.
He is one of many expatriates every year who are caught short by the UAE law which states that it is illegal to write a cheque if you have insufficient funds in your account.
According to the law, in the event that a cheque bounces, the holder of cheque can report the matter to the police who will then arrest the writer of the cheque and give them an opportunity to pay the money back. If the payment is not made then the case is referred to the Criminal Court where in most cases the perpetrator is sentenced to jail. Edwards' case goes to show just how easy a mistake writing a cheque can be - a mistake that costs perpetrators dearly.
Recalling the mistake that nearly landed him in jail, Edwards says: "The first cheques I ever wrote here were for the rent and furniture on my apartment. I was a bit short of cash because I had to pay a deposit and rent in advance as well as pay for furniture so I had to get an advance from my employer. I told the landlord he could cash the rent cheque immediately but not the one for the furniture as I was short of about AED50 for that. Unfortunately he went ahead and cashed the furniture cheque first before presenting the rent cheque which of course bounced. I thought I had been managing my money wisely. I had a separate bank account for the rent and as I only deposited the rent amount monthly and issued only one cheque quarterly, I genuinely didn't bother to check the account."
Edwards discovered the error of his ways at passport control at Dubai Airport when he returned home from a business trip.
"I arrived back exhausted one morning to be greeted by a passport control officer and was taken to a side office. I told them I knew nothing about a bounced cheque."
Edwards was taken to a police station where he spent three hours giving his details to officers before being allowed home and told to return the next day with the cash on the condition that he left his passport behind.
He returned with AED20,000 in cash, his passport was given back to him and he was free to go. However despite escaping a jail term - Edwards now faces the stigma of a bad credit history and has been penalised for that by UAE banks.
"There was no hassle or recriminations, I suppose having had to wait around for three hours had been punishment enough. The bank however punished me big time in that they charged me about AED400 for the bounced cheque and put a black mark against my name so I couldn't get a car loan when I applied for one. I had to get a car loan from another bank and because I had a bad credit history I had to pay them over the odds in interest."
Given the repercussions of bouncing a cheque in Dubai it's easy to see why many people would prefer to avoid ever having to write one at all.
But the systems set up by banks and landlords in the UAE mean this is virtually impossible. For a start most landlords require up to a year's rent in advance. And as few people can afford to pay this upfront, they have no choice but to hand over post-dated cheques.
Joss Clarence, operations manager of the property management division at Better Homes, said: "The norm in Dubai is that all payments have to be taken in advance either as a current dated cheque or a post- dated cheque. If the tenant has the funds to give us one entire payment they give it to us as one cheque in advance, otherwise it is a post-dated cheque. Some of the landlords are very particular and they will only accept one payment. While some of them go up to two payments and the absolute maximum is four."
The law in the UAE states that cheques that have already been written can only be cancelled if the cheque is lost or stolen - or if the writer of the cheque is officially declared bankrupt.
It is crucial therefore to keep a careful eye on your finances and ensure that when the time comes around for your post-dated cheque to be cashed by your landlord, you have sufficient funds in your bank account.
Otherwise the post-dated cheque you wrote six months ago becomes what financial advisor Sandi Saksena of Nexus Insurance Brokers describes as: "a sword of Damocles hanging over your head".
"People here are very happy to accept a post-dated cheque because they know they've got you covered," she says. "And if you don't pay it they can easily use the tactics of the law."
Banks too often require a cheque from customers as a guarantee against a loan.
This is usually written out to the full amount of the loan and cashed in the event of a customer failing to repay the loan.
When the bank cashes the cheque and finds the customer has insufficient funds to pay it - it can in theory contact the police and file criminal proceedings against the customer.
Ali Amiri of the Dubai based law firm The Attorneys, explains: "Most loan agreements state that if there is a default in payment and it is not paid or rectified within a week or 14 days then a cheque for the entire loan plus the interest can be cashed. The bank will receive a returned slip stating that this cheque has bounced and there is insufficient funds in the account.
"The bank that granted the loan will take this cheque to the police station and lodge a complaint. The police will call the person who issued the cheque and ask them to come and pay and if he does then the matter is closed. If he does not come forward or he comes but doesn't pay then they will detain him."
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