Font Size

- Aa +

Sun 10 Jan 2016 09:32 AM

Font Size

- Aa +

Emirates NBD hires debt collectors to chase expat defaulters in the US, UK

UAE banks, including Abu Dhabi Commercial Bank, are attempting to recover money from those who absconded without repaying loans

Emirates NBD hires debt collectors to chase expat defaulters in the US, UK

Emirates NBD,
Dubai's largest bank, is one of a number of local UAE lenders who have hired
British and American debt collection agencies to chase expatriate defaulters
who have absconded back to their home countries without settling their loan repayments.

“In response to
a growing number of fleeing debtors, banks such as Emirates NBD, ADCB [Abu
Dhabi Commercial Bank] and others have been increasing their recovery efforts
by employing international debt collectors and enforcers,” Radha Stirling, a
legal consultant specialising in the Middle East and founder of the
London-based charity Detained in Dubai, told Arabian Business.

Stirling
claimed that some of the third party agencies had begun using “intimidation and
harassment” in order to recover the funds outstanding, including threats to
issue Interpol notices against debtors, as well as harassment and threats of
harm.

She advised
expat debtors being targeted in the UK and US to do background checks on
whether the collection agencies are authorised to use such tactics to recover
debts and whether they are authorised to work on behalf of the banks they claim
to be representing.

“Any third
party claiming to represent a bank, should insist upon receiving confirmation
of representation before entertaining any communication,” Stirling said. “In
our experience, most debtors have acted in good faith and genuinely seek to
reach a manageable resolution. Threats simply cause undue stress and do not
change the situation and the debtor's ability to pay.”

While Abu Dhabi
Commercial Bank declined to comment, an Emirates NBD official spokesperson
issued the following statement to Arabian Business: “We would like to confirm
that, like other banks, Emirates NBD works with debt collection agencies,
within the legal rules and regulations of the jurisdiction where the bank uses
these agencies”.

Debtors
absconding is an unavoidable reality for all banks, not just those in the UAE,
but in November a senior banking official said lenders in the emirate are
working together to try to stem the number of small business owners fleeing the
country with unpaid debt, a trend which had allegedly reached around AED5
billion ($1.4 billion) by that point.

Small and
medium-sized enterprises (SMEs) have come under pressure amid a gradual drying
up of liquidity in the banking system due to the weak oil price and slowing
economic growth.

As a result,
some business people have chosen to "skip" the country, leaving
behind unpaid debt, a situation that bankers say has grown significantly from
previous years.

"We want
to take coordinated action on risk management," UAE Banks Federation
chairman Abdul Aziz Al Ghurair said.

"The idea
is to allow the customer to pay for his debt and stay in town if they have a
good intention. If they don't have a good intention, then it is no good (the
bank) spending time (with them), it doesn't help."

Current
bankruptcy rules are considered by lawyers to be outdated and largely untested,
with few struggling companies using the legislation.

The cabinet
approved a draft law in July 2015 but it still needs the support of the Federal
National Council, the country's legislative body, and the president.

Al Mansouri
also said the UAE would set up a credit guarantee scheme to help reduce the
risk of default for potential lenders. He didn't elaborate on the specific
details of the plan.

For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Mike Thompson 3 years ago

Best way for debtors to handle harassment is Record your telephone calls and then if they say anything equating to threats or harassment then the tables will be turned and the creditor and/or debt collector could face criminal prosecution and/or lose their licence as debt collectors.

Super 3 years ago

I'm owed millions by a UAE national who is living happily in the UAE, even though an arrest warrant was issued for him 3 years ago. The police refuse to arrest him even though the courts have made judgement in my favor. It might be nice if the courts chased down the guy who stole from me with the same get our that banks chase expats for a few thousand dirhams.

Victory Red 3 years ago

I think the banks should take a long look at their role here. During 2015 I was inundated with offers to increase my credit card balance, take personal loans, and and and.

Even today I got an offer to convert my club membership to an Easy Installment Plan over 48 months!

The banks certainly have no sympathy from me in this regard (not that I condone the creditors running away either).

sandra owen 3 years ago

I think the way these debt collection agencies are harrassing people in a very agressive way is absolutely appalling. I dont condone people running away, but banks still need to check their records and find out the situationj and brief these agencies correctly before setting on a path of bullying. If there was away that people could talk to their banks to reach an amicable situation without the fear of going to jail, there would be alot less defaulters.

Radha Stirling 3 years ago

Was the judgment issued in the UAE? It should be possible to pursue its enforcement, though I understand the roadblocks that need to be overcome.

Garrett Robertson 3 years ago

Debt recovery professionals allows banks to retrieve debts. When it becomes clear that the debtor does not have any intention of returning the cash, the professionals swing into action and allow you to get your cash back through professionally negotiated resolutions. In lots of situations they organize meetings between the lenders and the debtors so that a line of communication is created that will help the company recover the money they loan. The debt collections in Dubai is now easier as hiring a debt recovery agency proves to followup the problems in retrieving money.

Mustafa 3 years ago

I'm, in a similar situation. I and many others are owed billions by a UAE company that took our money and failed to deliver on contractual promises. This company continues to trade and there is no possibility of redress.

Pankaj Shah 3 years ago

If I am not wrong it was the Islamic Banking arm of Emirates NBD who illegally cashed my friend Allan Paris's security cheque landing him in Jail. Please refer to the link:

http://www.arabianbusiness.com/-how-my-dubai-mortgage-landed-me-in-police-cell--569685.html.

They neither apologised nor compensated him for what they did. Unfortunately there is no provision in the laws to punish such irresponsible behaviour by banks. Why not?

The only reason people run away is the fear of going to jail. It is time bounced cheques below AED 100 - 150,000/- are de-criminalised and a tribunal set up to speedily dispose such cases.

Banks, outsource critical activities like vetting of credit card applications. These agents are only interested in earning their commission and will happily give credit cards to all and sundry. The result is default and people running away.

The UAE Banks association needs to do some deep introspection and change their ways rather than blaming the public !

Pankaj Shah 3 years ago

I am sorry but this is not always true. Three banks were threatening to send my employee to jail for default on his credit cards. First they gave him 7 cards without checking his ability to pay. When he defaulted they piled him with huge & unreasonable fines making matters worse.

The senior officers who could take a decision to settle refused my calls. It took me 45 days of rigorous efforts & pulling a lot of strings to eventually meet & negotiate a settlement with each of them.

My employee is making his payments regularly, but one of the banks has a serious flaw in keeping its records up to date and the debt collectors keep harassing us claiming huge unpaid instalments.

For one of my corporate accounts the SAME bank kept deducting huge fines from my balance due to THEM entering wrong data in my profile. I got my refund only after approaching a local newspaper and shaming them in public. But no apology was ever tendered.

UAE Banks Association- please take note


Peter Peter 3 years ago

I also got an arrest warrant order against my landlord in a property maintenance case but for some reason it was never served. Some undue influence was obviously at play. Before I knew it the warrant was vacated on the simple say so of my landlord's representative that they had complied with the court order. But there were no inspections and even 5 years later the court order to repair and maintain the property has not been carried out. Unfortunately there is only just so much time and effort one can put in to trying to get justice.