YOUR DEBT Panel: ‘I consolidated my debts but Dh18,500 is missing from the loan amount’

I are a full-time teacher but also tutored after work to greatly help us out financially as my husband has been unemployed for five years. During this time period, we have applied for two loans and used bank cards to pay the institution service fees for our two sons.

Since Covid-19 began, I've lost my tutoring job and our finances have suffered badly. We actually had two personal loans and two credit cards with the same bank, and another credit card with another bank. In June, a representative from the first bank called to ask if I was interested in taking right out a 48-month instalment arrange for the two bank cards.

She said there would only be a penalty of Dh105 easily paid the instalment plan off early, as the repayments would be lower than the minimum balance that I have been paying each month. Due to our financial issues, I agreed to do this. However, my payments for both of these credit cards went from slightly below Dh1,000 a month to a lot more than Dh2,000 per month.

Then in August, the same bank offered us a consolidation loan that would allow us to repay the two unsecured loans, the two bank cards and the third one we have with the other bank. The loan was for Dh285,000, with monthly instalments of Dh6,878. After our debts were paid, we'd likewise have Dh18,500 left to pay for our sons’ school fees as we have fallen behind on them and the institution will no longer allow them to wait classes until we make a payment.

We thought everything will be OK but we have now been caught up in a nightmare, where the bank’s credit card department took Dh65,000 for both credit cards whenever we only owed Dh46,500 on them - a notable difference of Dh18,500. To include salt to the wound, the credit card department also took our instalment payment for both cards, which means we have overpaid them by another Dh2,000.

After repeatedly contacting the lender about their error, the credit card department is currently blaming the loan department, and saying that the Dh18,500 visited the collections department to pay the interest on the credit-card instalment plan. However, I was assured there would only be considered a penalty of Dh105 by the bank’s representative.

We don’t know where the Dh18,500 has truly gone despite many calls to the bank. Nobody can make clear what has happened and all we wish is your money can buy to be released so as our sons can go back to school. Is it possible to advise us on what to do? MJ, Abu Dhabi

Debt panellist 1: R Sivaram, executive vice president, head of retail banking products, Emirates NBD

This is an extremely challenging time and I sympathise with the immense pressure of your position. In spite of the extenuating circumstances you have already been facing, it is creditable you are being conscientious about your finances and taking responsible actions towards meeting your obligations.

Going through the facts you have provided, there evidently seems to have been some miscommunication between your bank and yourself. I would recommend that you immediately get in touch with your bank and seek an urgent appointment with a senior representative from the department concerned to understand in full detail how the debt consolidation reduction has been done.

Based on the details you provided, it can look like there's been some serious miscommunication on the part of the bank representatives who offered you the credit card instalment plan and the consolidation loan

Ambareen Musa, Souqamal.com

Ensure that you take all statements and details of your loan and credit cards' outstandings prior to applying for the brand new loan in order to confirm the quantity of everything you owed across all facilities, and acquire clarification from the bank on what is creating the discrepancy.

You should also highlight the discussion with the bank’s representative on the small penalty that you were told you would be necessary to pay if the instalment plan was paid early, instead of the bigger sum that is deducted. Further, this discussion may also help you to get clarity on the entire debt settlement agreement with the lender.

I wish you the very best in resolving this matter and hope your household become financially stable soon.

Debt panellist 2: Ambareen Musa, founder and leader of Souqalmal.com

Based on the facts you provided, it can look like there's been some serious miscommunication for the lender representatives who offered you the credit card instalment plan and then the consolidation loan. They have failed to clearly clarify the applicable interest, fees and penalties, plus the repayment terms of the brand new loan arrangement.

Did you obtain anything in writing from the bank, for instance a document that you had to read, consent to and sign for the lender to proceed with the revision of your loan terms? While there's always a chance of errors happening at the bank's end in terms of processing any application, additionally, there is the likelihood that you might not exactly have been fully alert to what you were signing up for.

You should focus on requesting the lender for a copy of the revised loan and all its payment terms. This should mention all the details in black and white - the interest, processing fees for the instalment plan, if any, pre-payment penalty etc.

Now, coming to how you would cure this situation if the bank has indeed violated the conditions you decided to. You can lodge a formal complaint with the Central Bank of the UAE and if that doesn't work, then hiring legal help could possibly be your next plan of action.

From what you've explained here, it seems as though the bank didn't take into account the amount you'd already paid towards the credit card instalment plan before consolidating your total outstanding credit card balance together with your existing loans.

Besides that, additionally you need to be sure that the Dh18,500 was unfairly adjusted towards the instalment plan, which violated the pre-payment terms. A legal professional could help navigate this better, and get yourself a clear response from the lender. Just ensure that you retain all proof communication with the bank to help create a strong case for yourself.

Debt panellist 3: Steve Cronin, founder of DeadSimpleSaving.com

First, you need to find your paperwork and feel the terms and conditions. With out a written record, the salesperson could virtually say anything and it won’t necessarily be accepted by the lender now. Should you be to take this further up the chain, you must have documentation of most papers and communications from the lender, who you have spoken to and proof which you have tried to mediate with the bank on this matter.

Now is not enough time to be shy relating to this, as your family is determined by you. Make it clear to your bank that you intend to take things further if you don’t get a satisfactory result. One department can’t just blame another, although you do have a complex situation with multiple restructurings. Be clear that the paperwork will not make you responsible for the Dh18,500. If it can, the case is just about mis-selling instead of missing money.

If you continue steadily to hit a solid wall with the lender, you should contact the Consumer Protection Department of the Central Bank of the UAE. You can call them on 800 CBUAE or visit one of their branches. Be sure to will be able to lay everything out evidently and have proof where the bank could be responsible. Also let your bank know that you can be complaining to the Central Bank.

If this will not resolve the situation, you may need to look into insolvency proceedings via the court, where a court-appointed mediator will try to work out the right solution for you personally and the bank. Meanwhile, you should attempt to keep your expenses down so far as possible, without making yourselves completely miserable, as 2020 is hard enough since it is. Think how your loved ones can generate any extra income, through freelance tutoring in person or online. Will there be any way your husband and sons can generate any income at all?

Finally, if there is anyone in your extended family or friendship circle who can extend you financing, even with some kind of low interest rate, this could help you to get back on your own feet. It’s nothing like their money will earn more than 1 % sitting in a bank these days.