UAE banks still using cops to collect debts - top lawyer

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Top UAE lawyer Dr Habib Al Mulla.

Top UAE lawyer Dr Habib Al Mulla.

UAE banks are still using the police as debt collectors, according to top UAE lawyer Dr Habib Al Mulla.

In an interview published in Arabian Business, Al Mulla said that despite many calls for reform, he was not confident that the decriminalisation of bounced cheques would happen soon.

“Banks are using the police as debt collectors, but even the police don’t want to do this, though until the law is changed, they can’t change this,” he said.

Al Mulla also claimed that finance companies were deliberately blocking moves to change the law.

“One of the issues that is delaying this is there are certain economical lobbying groups behind continuing this practice. Look at banks, credit card issuers and car financing agencies. Their main protection is the cheque guarantee, and so they are lobbying against this. But the  market has to adjust itself. You cannot put people behind bars (for bouncing cheques),” he told Arabian Business.

The issue of bounced cheques is one of a number of parts of financial laws that, he argued.

“The issues is the current criminal code does not properly fit for business crimes. It was drafted at a time when everyone was looking at crimes such as murder, theft and rape. But when it comes to sophisticated financial transactions there needs to be a separate code to deal with these cases because sometimes there is a very fine line between what constitutes a crime and what is a commercial transaction (that’s gone wrong.),” he said.

Earlier last week Dr Al Mulla announced a merger of company with the world’s biggest law firm Baker & McKenzie. The new entity, which he will chair, comes into effect on July 1 and will be known as Baker & McKenzie Habib Al Mulla.

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Posted by: Chippyminton

What i would like to know guys is can you TRAVEL back to dubai if you have a credit cared debt (default) . no one seems to be able to answer this
My case goes back to 2007 i have been offered a job there ..just want to know what my options are really

Posted by: robo

Hi. I left Dubai in 2008 with a large Debt but I am starting to pay this back. Through no fault of my own my father died and I had to return to the UK and my company at the time would not let me. I was devastated as I have never been in debt in my life and cannot believe the trap I go into then having to leave. I am paying the banks back what I can when i can and at least i am staying in touch with them. My problem is the agencies like Bilkish and Tahseel how they are treating people around the world is wrong and i have been reading many forums about there tactics and its a disgrace. They have started with me even though im here and staying in touch they think they can treat me like a Dog but it will not happen. Also they have breached my data protection many times over.

Posted by: Radhakrishnan

I really appreciate Dr.Habib Al Mulla who brought the issue in public as I am a victim of the same .

Posted by: Sam

I don't think the law is the problem. just make is simple, don't borrow or get "others" money unless you are sure that you will pay your debt, or you can use your own cash money. Think of opposite picture. The bank has taken your money and wen't bankrupt, what will be your action?. we don't need law to do the right thing, but we need the law when there is something wrong with our behaviour, attitude or mentality. Why to issue a check and you know there is no enough cash to cover it? I agree that all the banks are trying their best level to attract you to sell you the only product they have "Money", but the question is "why" you have opened the door to get yourself and your family into that trap?
The banking system is simple, its taking money from depositors in specific rate and give it to borrowers in higher rate. so, the borrowers are actually taking the money of depositors. If the borrowers took the money and ran away, he is a "thief" and should be subject to criminal law.

Posted by: Hisham

@Sam outside the fact that you have completely missed the article, which is not about the individual's inability to pay, but about a signature that wasn't trusted by the bank, I wonder what it is you suggest. That we all keep our money in a mattress? And then wake up one night (like the residents of Tamweel Tower a few months back) with a fire burning down the house, and then what? Also, I think you may want to update your knowledge of financial systems as the function of a bank as you describe it dates back a while, when banks needed money to lend money... In the meanwhile things have become a tiny bit more complex than that...

Posted by: Hisham

My bad on the first part about the article, happens when you are an "efficient reader" first selecting articles and then reading them in different tabs.

Posted by: Tehsin

@Sam

I respectfully diagree. With your comments you are saying there is no need for banks in an economy. If everyone is using his own cash then there won't be any deposits and means no loans. So what the banks are for then, close down all. That is not the solution.
On your second comment that what if bank goes bankrupt and you lose your money what do you do. In most countries you can't do anything rpt anything. You can't sue or force a bank to pay you. Look at what happend to BCCI bank when it was closed down in 1991. Thousands of people lost money and most are still waiting for a settlement. Look at what happened in Greece. They have to take 70% of haircut on their deposit and getting only 30% back. Banks are too powerful to be forced you to pay. As an individual you are too weak. There should be a difference in "intention" and "ability" to pay a liability back. If someone has a heart attack in a car, you can't fine him for an accident. It was not his intention but inability to drive

Posted by: rednrosy

@sam if only it were that simple, they use very clever marketing to hook you into borrowing money. People who take out the loan do so believing they can pay it back. However circumstances change and all of a sudden those checks are going to bounce.

If you have drug dealers outside of a school, it would be unfair to blame the students for buying the drugs.

Consumer debt is often a social evil and should be regulated.

Posted by: Glen

We could start with the premise that no one forces anyone to live on future income, or in common terms "live in debt" The next premise is you are not forced to have a bank account and if you do not have one you will not be forced into this situation.

When you are forced into the situation because the system has allowed landlord to request a years rent in advance and lets you pay this with PD cheques then you are subscribing to all these laws even though you may not know them.

When banks are allowed to take savings from a client and do not even include on his monthly statement what the current rate of inrerest is you are submitting yourself to the system.

Who make the laws in the U.A.E. the baking system or the rulers?

Banks should be brought into line and if they make bad decisions they should bear the brunt of those bad decisions.

Banks in the U.A.E. have rejected credit card applications because the applicant is over 60 years of age, not taking into consideration their net worth

Posted by: Andy

Perhaps then the locals should pay the foreign expats their yearly salary up front so they can pay their yearly rent up front.

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