Our consumer advocate Keren Bobker helps with questions on final salary payments, credit cards and mortgages.
On your side
I have been working for my current employer for a little over two years. The company appears to be in financial difficulty and says it needs to reduce in size to survive, and my job will be one of the ones to go. My boss has offered me the option of resigning or being made redundant. He has suggested that it would look better on my CV if I resign, but I don't know if this makes any legal difference. I have to let him know soon, but really don't know which is for the best. Could you please explain how this could affect me?
With everything we have experienced in the UAE in the past 18 months or so, there is no longer any stigma linked to being made redundant. You are on an unlimited contract, so the difference as far as you are concerned is how your end-of-service gratuity will be affected. If you resign, then your employer only has to provide you with a gratuity payment of one third of the standard calculation, which is 21 days' pay for each year of the first five years of service. If you have been employed between three and five years, then you would be entitled to two thirds of the standard payment if you resigned. After a full five years of service, there is entitlement to the full gratuity payment, whether a person resigns or is made redundant. The payment also increases after five years of service. Outside of the free zones, there is also the possibility of receiving an employment ban on resignation, but not following redundancy.
I have had an HSBC Etihad credit card for the past couple of years, and was notified by HSBC that the partnership was coming to an end. I was told that my card would be cancelled on September 30, 2010, and that I would be sent a new Visa Gold card instead. About six weeks ago, a representative from HSBC called me to explain the new card in detail, in which they said they would send me the card that week and my existing card would be cancelled with immediate effect. After a week of not using my card and waiting for the new one to arrive, I called HSBC, which had no recollection of what I was referring to and said that no cards were being issued at that stage. I have called HSBC five times in the past two weeks, each call lasting at least 30 minutes. Each representative I have spoken to has been unable to tell me why the new card has not been issued, when it will be issued or, indeed, give any information of any value. In addition, every time I have called, the representative has promised that someone would call me back within 24 hours. I have never been called back. I am astounded at the lack of service from "the world's local bank". Is there anything you can do to get this issue sorted?
CM Abu Dhabi
This issue was referred to corporate communications at HSBC and a few days later they advised as follows: "The conversion of CM's Etihad Guest credit card to Visa Gold was delayed due to human error at the bank's end. We have resolved the issue and have sent CM her Visa Gold credit card (in lieu of her Etihad Guest card). She has confirmed receipt of the card. Based on our investigation, feedback has been shared with the concerned departments and staff have been counselled appropriately. We have contacted CM and apologised for the inconvenience and she is satisfied with the resolution. As a gesture of goodwill, we will be crediting her Air Miles account with bonus Air Miles." CM has confirmed that she has now received a replacement credit card and is happy to receive a significant amount of bonus Air Miles. It is good to see that HSBC has resolved the issue promptly and is addressing customer-service issues.
I have a mortgage on an apartment that was arranged by the estate agent who sold it to me. The company also arranged life insurance to cover the loan, but they are no longer in business so I cannot speak to them about my question. I believe that the life cover that was arranged at the time is expensive and I have been given quotes for a replacement cover, which is significantly cheaper. At the time, the agent told me that I had no choice but to take out this particular plan. Was he right or were they just trying to make more money from me? Can I change it now to save some money?
In this instance, the situation actually has nothing to do with the estate agent. The restriction is from your mortgage lender, Emirates NBD (ENBD). Their standard practice is to require borrowers to take out life cover via the bank, which is charged at 0.4 per cent per annum of the outstanding loan amount. This is arranged by their approved insurers and is assigned to the bank. ENBD, in line with many lenders, does not permit borrowers to make their own arrangements.
Update On September 18, we published a letter from a Dubai resident who was having difficulties sorting out mortgage payments with Mashreq Bank. She has been paying by post-dated cheques for the past three years and had requested a payment review. The remaining issues have now been cleared up and the monthly mortgage payments are now being made from her current account. Even better, the interest rate she is being charged has reduced by 1.24 per cent per annum.
Keren Bobker is an independent financial adviser with Holborn Assets in Dubai. Write to her at email@example.com with queries for this column or for advice on any other financial planning matter. Letters can also be sent to firstname.lastname@example.org