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Hi guys,

Need some advice.

I had taken an auto loan from a bank at 3.75% flat interest rate and the car has since had an accident and has been written off.

I have received the liability letter where the outstanding amount is significantly higher than the amount it should be. On further enquiry I was told that in the 'system' the interest is calculated at 'reducing balance at 8.25%' and hence the o/s is higher. The argument is that at the end of 48 months the total payout from me would be the same.

The issue is since I am foreclosing the loan within 5 months. The worst thing is I have visited the bank almost 8 - 9 times but I have been able to get beyond the front end sales person and still don't have any resolution.

I have since paid the entire claimed amount and signed the foreclosure forms about 8 days back. What is worse is that ONE MORE cheque has also been cleared.

In these circumstances, what are my options? Is there any other authority I can approach to get a decent redressal?

Firstly I don’t think there is a “consumer protection board” in the UAE, even less one specifically directed to banking issues.

In my experience threatening the bank with closing your account, will have absolutely no effect; in fact they hardly broke a sweat in making out the paperwork and giving me my money.

You could possibly go to the bank and threaten them with fraudulently submitting the last cheque for payment. On a practical level though I have found banking in the UAE to be extremely compartmentalized and in all reality one department (the vehicle loans for example) does not deal with the cheques after handing them over for “processing”.

Be warned though if you go into the bank and throw your toys, be prepared to get nowhere. Best you can do is to ask for the manager and tell the person you are talking to that it seems there was a fraudulent transaction performed on your account and you’d like to see him in this regard.

I'm not sure of whom u can get to outside the bank scope. But I know that the central bank regulate loans since banks report people who refrain from paying or who have bounced cheques. U should also have the loan installment schedule printed out upon loan approval and u can sum it up and compare it against the sum of ur foreclosure schedule.

The logic says that if you repay your loan on less time the bank premium should lower and hence the total should be less. But banks play that dirty trick of increasing the interest rate upon any modification to the loan principle or the repayment schedule. They also play the flat/reducing rate flip even though there are equivalent and can be converted from one another.

If you know a banker from another bank you could tell them your story and their advice would be most valuable. You could also report the bank to the prosecution and file a case but u gotta be sure about ur argument.

bedro wrote:I'm not sure of whom u can get to outside the bank scope. But I know that the central bank regulate loans since banks report people who refrain from paying or who have bounced cheques. U should also have the loan installment schedule printed out upon loan approval and u can sum it up and compare it against the sum of ur foreclosure schedule.

The logic says that if you repay your loan on less time the bank premium should lower and hence the total should be less. But banks play that dirty trick of increasing the interest rate upon any modification to the loan principle or the repayment schedule. They also play the flat/reducing rate flip even though there are equivalent and can be converted from one another.

If you know a banker from another bank you could tell them your story and their advice would be most valuable. You could also report the bank to the prosecution and file a case but u gotta be sure about ur argument.

Good answers folks.

if you want to file a case against the bank you need to be watertight in your case and also have to deposit a fairly large sum with the court (between 10,000 and 50,000Dhs.) They do that to stop people filing time wasting cases that will be tied up in litigation for years.



Knight