UAE banks blank cheque abuse continues to shock the international banking community
UAE banks still demand blank cheques as security for credit. They can fill out the amount themselves and cash the cheque whenever they see fit, regardless of whether their client is still using the account. It is therefore strongly advised to close down all bank, credit and utility bills officially before leaving The UAE and insist on the return of these cheques, as there is no effective legislation preventing abuse of this outdated system.
Clients who have not officially closed all their accounts when they leave the country can find the amounts filled in for them in their absence and used against something seemingly insignificant, such as an unpaid utility bill etc. One American client of Detained In Dubai who thought she had closed down all of her accounts, accidentally left a tiny unpaid mobile phone bill. She heard nothing for three years, and then out of the blue was amazed to contacted by a UAE based debt collector for a bounced cheque for over $20,000. Nobody had thought to contact her while unexplained interest and charges were being added in her absence. The disproportionate demand is now being handled by Detained in Dubai’s legal experts.
If funds are not available when a security cheque is presented at the bank, a complaint is then taken out with the local police; this escalates the matter to a criminal offence and allows foreign nationals to become victims of Interpol Red Notice Abuse. Interpol is not mandated to chase debts, but the UAE’s close connections between high up banking leaders, and leaders in the criminal justice system allow these debts to be reclassified as the criminal act of fraud. The case is reported to Interpol, who are not obliged to verify the crime, and list the unfortunate debtor with a Red Notice, meaning they can be subjected to detention and extradition to the UAE.
Radha Stirling, CEO of Detained in Dubai added her voice to calls for a halt to this practice, “we have clients who have left The UAE up to seven years ago and are becoming victims of Interpol Red Notice Abuse without their knowledge, due to the abuse of this blank cheque system. The latest of these ended in a border arrest, purely because the client hadn’t closed down a personal bank account correctly before leaving The Emirates.”
She continues, “this practice is outdated, ineffective and subject to abuse but we are seeing more and more cases of it recently”.
Clients facing harassment over unexpected or unexplained debts in the UAE are advised to contact legal help rather than attempting to tackle it themselves.