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Sat 20 Apr 2013 10:33 AM

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UAE banks still using cops to collect debts - top lawyer

Dr Habib Al Mulla claims finance companies are also blocking reform in the UAE

UAE banks still using cops to collect debts - top lawyer
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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Sole 6 years ago

The statement in this article are very funny , shouldn’t we say that UAE banks are still using top law offices to manipulate the laws and file cases in police stations and use police to jail defaulters ? shouldn’t also be mentioned that some top Lawyers bend the laws to their advantage and use illegal methods to impose travel ban on defaulters who happen to refuse their clients demands ?

Shouldn’t we before criticizing someone else look into our own behaviors , instead of keep using what we claim as bad practice and laws and demand that it should be changed ? isn’t that what they call Hip……… ?

Andy 6 years ago

@ Sole, They only go after non-locals to collect debts and money from bounced checks. For a non-local it will cost him 20% of the amount he is owed to try and collect it legally through UAE courts. 10% of which goes to to lawyer and 10% of which Dubai courts take as a fee so there you have it 20% :) Now once the court case if finished which could take 1-2 years the local involved will most likely be pardoned and have his debts sent to the Dewan's office to be settled by the state. If you are lucky you can then collect what is owed to you. I am one of many that has not been able to collect for over 10 years now as they have not paid.

mike 6 years ago

Sole absolutely RIGHT in his comments. It is really became a joke dealing withg banks in UAE. Government gave them power to treat their cliemnts as slaves and do what ever thjis or that bank like to do with his clients. Actually oru main financial problem in UAe was created by banks where they forced people to run away and left so many financial problems behind them becasue banks never cooperated at all. I am saying thjis from my personal experience also and notr from otheres.

rednrosy 6 years ago

It just goes to show, that behind those friendly adverts, a picture of smiling and helpful banks, who want to help you borrow for your dream home or dream holiday, what we is there is a bunch of ruthless sharks with zero interest in the wellbeing of clients, interested only in maximising returns and will use any methods they can to achieve that aim. They will fight against rules which should help society, they only have one interest in mind and it is not yours.

abusidra 6 years ago

I was wondering whether police does it free of cost or charge the companies in advance as they spend their manpower and time on following someone else cases without any knowledge or intention..good or bad, simply just like that?

Glen 6 years ago

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

Sam 6 years ago

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.

rednrosy 6 years ago

@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.

Andy 6 years ago

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

Radhakrishnan 6 years ago

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