Tag Archives: consumer advice

News: Bad Cheques are still Bad News

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Bouncing a cheque is still a criminal offence for expats in the UAE

There was a flurry of excitement in the local papers when there was announced on 1st January that the bouncing of security cheques would no longer be a criminal offence. The move was welcomed, albeit cautiously, whilst further clarification was awaited, but it has since been confirmed that this is not the case.

It has now been confirmed that this change will not apply to expats and bounced security cheques will still be accepted as valid evidence of criminal action in UAE courts.

The reports refer to the cheques that banks request when advancing loans so that in the event of default they could present them for payment and if they bounced the bank could then take criminal proceedings against the defaulter.

In a statement, the Higher Committee for Debt Settlement Fund for Nationals said. “The mechanisms set by the fund will apply only to UAE citizens, and not others, and this includes the President’s directives to decriminalise [bounced] security cheques presented by UAE citizens to banks and financial firms”.

There were contradictory reports in the local newspapers immediately after the initial announcement with some stating that the ruling  applied to the expats in the UAE, who make up a majority of the population, but these reports have since been corrected.

Cheques are widely used in the UAE to underwrite credit cards, loans and to guarantee future payments. Unlike in many countries where bouncing a cheque is a, less serious, civil offence, in the UAE it is a criminal offence, with the result that numerous expats are jailed each year for bad debts. Many people feel that taking action against someone who is already in debt as putting someone in jail takes away any opportunity they had to earn the money required to repay the debt.

In October 2012, the authorities relaxed the penalties for Emiratis who write bad cheques and in November freed around 290 UAE nationals who were in prison for bouncing cheques. The Higher Committee for Debt Settlement Fund for Nationals has settled many of the debts built up by Emiratis.

In summary, the situation has not changed for expats living in the UAE and anyone taking out any loans, or building up any debts, must be aware of the serious consequences of defaulting.

keren@holbornassets.com

 

News: Further restrictions on UAE mortgages – edited 21/01/13

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EDIT 21st January 2013

According to an article published by Zawya issued today taken from Reuters:

“The United Arab Emirates central bank will not impose limits on mortgage lending without consulting commercial banks, and any new rules are not imminent, central bank governor Sultan Nasser al-Suweidi was quoted by a local newspaper as saying….
….But Suweidi was quoted as saying by Al Ittihad newspaper on Monday that there had been a “misunderstanding” in the media and that no central bank ruling had been issued, only a warning to banks to be prepared for rule changes in the future.”

This is rather strange as I have a copy of the notice that was issued to all banks and after it has set out the revised loan to value limits,  it clearly states that “all  banks and finance companies are required to comply with this notice”.

It seems that some back tracking is taking place…

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Original post 31/12/12

Yesterday the UAE Central Bank issued a circular, to take immediate effect, limiting mortgage borrowing to no more than 50% of the value of the property for expats. This was largely unexpected and lenders are having to change their offerings immediately as many were previously lending 70-80% of a property’s value.

It appears that pre-approvals for higher loan to value mortgages are also being withdrawn and that will leave many people unable to proceed with a purchase. It will also severely restrict the remortgage market.

It appears that the Central Bank intended to stop the aggressive lending that fueled the boom years in the UAE property market and led to significant bad debts across the banking sector, something many are still saddled with.

The circular states that mortgages for expatriates are being limited to 50%
for their first property, and those to UAE nationals at 70% of the property’s value. For subsequent units, expats can borrow up to 40% with UAE Nationals being restricted to 60%.

There have been several claims recently that the UAE property market was showing an upturn, but this news will surely halt that as fewer people will be able to afford such large deposits and for the same reason will reduce the secondary market.

It’ll certainly be interesting to see the reactions of interested parties over the next few weeks. Happy New Year!

keren@holbornassets.com

dubai property

Every little helps…

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This is a time of year when many of us incur a great deal of expense. Not only do we spend money on gifts and food at Christmas, many expats also travel to their home country for the holidays.

The point of this quick post is just to remind you of a few ways in which you can save some money, not only during this month, but throughout the year.

The Entertainer Books. Many people will be familiar with these books with contain vouchers, usually on a ‘buy one get one free’ basis for cafes, restaurants and activities. You only need to use it a few times to recoup the cover price. If you haven’t bought your books for 2013 there is an ongoing offer to buy online and receive a discount of 10%.  http://www.theentertainerme.com/

Loyalty and discount cards. There are quite a number of these and I believe the better ones include Airmiles, Amber, Time Out and hotel cards for places you frequent regularly. Some give you discounts on purchases, on meals, of room stays or you can accrue point that you can redeem for all manner of items. You may end up carrying around a few extra bits of plastic, but at the end of the year you might have earned enough points for a night away, to buy something for the home or have saved hundreds of Dirhams on meals and drinks.

Vouchers. A number of publications have voucher offers that you redeem for a specific period. Whilst most won’t be of interest to you, it can be worth checking the various sites in case something comes up that you do want. There are a number of group buying sites operating in the UAE. The downside can be that if an offer is very popular you can be limited regarding the dates you can use them and it is suspected that many never get used and expire.

Currency transfers.  I would venture to suggest that most expats in the UAE transfer money between currencies at some point. Many people make an online transfer from one bank account to another, but this is rarely the most cost effective way. Many banks charge a set fee and even if they don’t they tend to offer uncompetitive exchange rates, which are rarely disclosed on their websites.

You can get better value for money by using a currency exchange house. These are different to the companies with high street outlets and offer particularly competitive rates for larger transfers, although the rates are also good for smaller payments and regular transfers. The system I recommend is quick, easy, secure and regulated. See this earlier post on this site and contact me for specific details without obligation. Save money on currency transfers

Bank account and credit cards  In the past it has been almost impossible to work out which is the best account for you in the UAE, but now you can access information via the Souq al Mal website. This offers information from over 20 banks so you can see if you are getting the best value. The site provides detail of interest rates, fees and also loyalty and benefit schemes.

Contents cover  Not a way to save as such, but if you have a fire, flood, or break something valuable then this could represent excellent value for money and is certainly cheaper than paying to replace everything yourself. Full details on this recent post Contents insurance

Be smart with your money and take advantages of easy and painless ways to spend a little less.

keren@holbornassets.com

 

Contents insurance – are you covered?

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The recent fire in an apartment building in Jumeirah Lake Towers has made many people wonder how they would manage if the same thing happened to them. A recent survey showed that up to 86% of residents in the UAE have not arranged insurance for their possessions and home contents.

I suspect that in part this is due to people feeling safe as burglaries are few, but they do happen and I know of a number of reported cases of break-ins to villas in recent weeks. The big scare was the recent fire, where many people had to be urgently evacuated, although at the time of writing we don’t know how much damage was caused. Bear in mind however, that smoke causes a lot of damage and it is likely that many tenants will have to replace furniture, soft furnishings, clothing, pictures and other items.

If you have not yet arranged insurance for your possessions, it is time to take action.

What can I insure?

Contents insurance is arranged to cover the cost of replacing your personal possessions such as furniture, clothes and electrical items. ‘Personal belongings’ is a vaguer category that covers things such as jewellery, watches or cameras and also provides some cover for items taken out of the home.

It can be useful to include accidental damage to contents and personal items cover, as it is not uncommon to drop a vase, spill something on a rug and both children and pets can be surprisingly destructive. Whilst as a tenant it is not compulsory to have insurance, if you add up the cost of replacing everything you own you may be surprised just how much it is worth. You are covering yourself in the event of fire, theft and can also elect to choose insurance for accidental damage.

What if I employ a maid or other domestic staff?

If someone other than a family member is living in the property this must be declared on the application so their possessions are also insured. Some plans also pay out if domestic staff are injured whilst employed.

Who offers contents insurance?

There are a number of insurance companies operating in the local market, each with slightly different plans. It can therefore be useful to use an expert broker as they have access to more providers than an individual and save you time, as well as making sure you take the most appropriate options.

I don’t advise on general insurances, but I do recommend that you get a quote from a company dealing with 15 different insurers to suit your specific needs via this link  Home & contents insurance quotes

What should I do if I want to make a claim?

Before you take out the policy make sure you read the small print to make sure you are getting the cover you want and need. Be aware of the policy limits and restrictions and if there is an excess amount (also known as a deductible), the relatively small initial sum which is not covered. If you need to make a claim, contact the insurance company immediately, advising them of the situation. You may need to provide a police report for items that are stolen or receipts for items to be replaced.

Be smart, make sure your possessions are properly insured today.

keren@holbornassets.com

On Your Side columns from The National newspaper – September 2012

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In  case you missed any, here are links to all the On Your Side columns from the Personal Finance section of The National newspaper from September 2012.  I don’t post all the column links here every month, but on 8th September my 200th column was published which felt like something of a milestone.

Over the past four years the column has answered hundreds of questions, solved masses of problems, obtained refunds and apologies and even kept people out of jail by intervening in debt issues. I am extremely proud of the work we have done and the good reputation we have built up, not only with our many readers, but also companies in the UAE.

01/09/12      http://tinyurl.com/OnYourSide010912

08/09/12     http://tinyurl.com/OnYourSide080912

15/9/12        http://tinyurl.com/OnYourSide150912

22/09/12     http://tinyurl.com/OnYourSide220912

29/09/12     http://tinyurl.com/OnYourSide290912

 

Contact me at keren@holbornassets.com

 

 

 

News: HSBC takeover of Lloyds TSB?

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It has just been announced that HSBC Bank Middle East Limited (“HBME”) has entered into an initial agreement to acquire the United Arab Emirates onshore retail and commercial banking business of Lloyds TSB Middle East subject to regulatory approvals.

An unexpected move that is likely to please and annoy customers in equal measures. It appears that overall Lloyds TSB offers a better level of service to their personal banking customers than HSBC, so it’ll be interesting to see how this pans out, assuming the merger eventually takes place.

 

Want to save money on currency transfers?

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Who doesn’t want to save money?  As expats, we tend to make a number of transfers between currencies over the course of a year, but by doing it the right way, you could be saving yourself significant sums of money. Whether you are moving to or from UAE Dirhams, Saudi Riyals, Sterling, Euros, Dollars or just about any other currency you can make savings.

If you are planning on a currency transfer of a minimum of AED 8,000, or equivalent in any currency, you can take advantage of wholesale exchange rates that are more competitive than those offered by your own bank. And not only is the exchange rate better, there are no fees.

The system is very simple to use and all transfers are totally secure. The company is based in the UK, fully authorised by the UK Financial Services Authority and uses a major international bank for transfers. They have a number of offices outside of the UK including one in Dubai.

Transfers are available to and from any currency and real savings can be made. You agree the rate for your transfer so you know exactly what you will be getting. This method is suitable for both personal use and also companies.

To obtain further information about this valuable and useful service, please contact me by email and I will send you full details.

keren@holbornassets.com

Credit cards – friend or foe?

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This article appeared in the July issue of Good Taste magazine (available from Choitram supermarkets) and has some sound advice regarding sensible use of credit cards.  They aren’t all bad, but you have to make them work for you and stay in control. Used responsibly, credit cards are a useful tool but not repaying balances promptly could end up costing you a great deal of money.

Be smart in your use of cards and get some useful advice and tips from this article.

Credit Card - Good Taste magazine July 2011

If you click on the article itself, it will expand for ease of reading.

Recent radio podcasts

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Here are the links to the podcasts of the last two guest slots on the Nightline show on Dubai Eye 103.8FM

On 24th April we talked about questions and answers in my On Your Side column in The National newspaper and then about how not to invest.

http://nightline.podomatic.com/entry/2011-05-24T23_57_08-07_00

On 27th June we again chatted about popular column queries and then touched upon what can go wrong when investing and how to avoid it, as well as planning financially for the summer break and your holidays.

The next new broadcast from the Nightline show will be in September, but there will be reruns in the Nightline slot (8-10pm Sunday to Wednesday) including several of my appearances. I will continue to appear on the Dubai Today programme on the same station on the first Monday of every month at 11.00am.

The beginning of the end for cold calling?

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I am sure that many readers have received unsolicited calls from various financial sales companies, claiming their details were passed on by a friend who thought they would be interested in buying certain products. This kind of hard sell is both unprofessional and unwanted.

Banks and other institutions regulated by the UAE Central Bank have been banned from cold calling customers to market loans and investment products. The unexpected ban, which took effect on 20th March, has surprised quite a few financial companies who work in this way, but does not apply to financial advisory firms that are licensed by the UAE’s Insurance Authority. The circular does not mention fines or any other punishments for those who flout the ban, but it is to be hoped that action will be taken by the Central Bank.

It is generally believed that the Central Bank was responding to numerous complaints from UAE residents about the number and manner of cold calling practised by banks keen to sell products and services, although there are probably as almost as many complaints about broker firms. I hope that in time the Insurance Authority will issue a similar directive.

It is my opinion that professional advisers do not, and should not, cold call to obtain clients. It is against company policy at Holborn Assets to do this and all my clients are referred to me or find via this site, my newspaper column or radio broadcasts.