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Posts Tagged ‘UAE’

UAE Lenders Hiring UK Debt Collectors

Monday, July 12th, 2010

UAE lenders have been hiring UK debt collection agents in an attempt to collect defaulters who have fled the country and into the United Kingdom without clwearing their outstanding debt first, according to a Dubai based business journal.

Arabian Business quoted Radha Stirling, founder of Detained in Dubai, a London based charity that advised people who have fallen into legal trouble in the Emirates, as saying in a report, “I have spoken to people who have said they are being chased by debt collectors.”

But the British debt collectors “are not following through on their threats” as they do not have any power to force the repayment of loans owed to UAE lenders, she added, saying, “I think it is a scare tactic and I think the Brits are on to it and pretty much ignore them anyway.”

“As there are so many debt collection agencies in the UK, it is very easy to employ one and their terms are quite good,” Stirling said.

She believed that only those who owed a considerable amount of money were being chased in Britain “as it wouldn’t be worth chasing the smaller debts.”

In January, Dubai mortgage lender Tamweel reportedly hired a company to pursue an Indian customer and threatened to take legal action in India and the UAE if the customer did not repay its loan.

Under UAE law, bouncing a check is a criminal offense that can result in a jail sentence. Blank checks are commonly used to underwrite financial arrangements, such as credit cards or bank loans, to guarantee future payments, according to Arabian Business.

A research by the UAE’s RAK Bank last year showed that up to 2, 500 UAE residents skipped the Gulf nation each month without settling their debts, it said.

Debt Collectors Hunt Dubai Defaulters Abroad

Tuesday, January 26th, 2010

Across the UAE, lenders are hiring international debt collection agencies to hunt down customers who owe them money as they attempt to recoup huge losses incurred when thousands of expats skipped the country without clearing their debts, Emirates Business reported on Tuesday.

In one example cited by the UAE daily Dubai-based mortgage lender Tamweel has hired a debt collection company to pursue a customer in India and is threatening to take legal action in India and the UAE if the customer does not pay up.

“If the customer chooses not to cooperate, then, under the legal framework, we reserve the right to recover our dues,” Tamweel was quoted as saying in a statement.

Banks and mortgage providers in the UAE have seen the amount bad loans on their books soar over the past 18 months amid the economic downturn.

They went on a lending binge during the boom years, but when the global financial crisis hit many expatriates who lost their jobs returned home without paying their debts.

Banks are increasingly turning to the courts to recoup losses with Barclays recently winning a landmark court case in Dubai allowing the British bank to repossess properties of customers who had defaulted on mortgage payments.

UAE bank provisions more than doubled to $2.57 billion in the first nine months of 2009, compared to the year-earlier period, and likely ended the year near the $4 billion mark, according to the Kuwait Financial Centre (Markaz).

Provisions as a percent of UAE banks’ total loans likely reached 1.72 percent by the end of 2009, up from 1.13 percent in the first nine months of the year, Markaz said.

   
 
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